Income and Democracy in Sub-Sahara Africa

Empirical Economics, 2012

This paper studies the link between democracy and economic development for 28 countries of Sub-Saharan Africa for the period 1980-2005 in a panel data framework. A democracy index constructed from the Freedom House indices. A variety of panel data unit root and cointegration tests are applied. The variables are found to be integrated of order one and cointegrated. The Blundell-Bond system generalized methods-of-moments is employed to conduct a panel error-correction mechanism based causality test within a vector autoregressive structure. Economic growth is found to cause democracy in the short-run, while bidirectionality is uncovered in the long-run. In addition, the long-run coefficients are estimated through the panel fully modified ordinary least squares and dynamic ordinary least squares methods. Democracy has a positive impact on GDP and vice versa. These results lend support to the virtuous cycle hypothesis.

This study aimed to clarify the relationship which exists between democracy and economic development within Sub-Saharan Africa. It strived to bring out a comprehensive analysis of the reasons why the pace of democratization is slow within this region and why until present date, there are just patches of real democracies there. The work also focuses on the reasons why despite democratic movements, economic growth rates have remained lagging behind average until of recent that, and some few countries have emerged to join the list of fastest growing economies in the world. The study further highlights the unique path of Sub-Saharan Africa democratization process should follow since it does not possess the various factors that favored the democratization processes of most developed countries. In order to obtain the objectives, previous studies and statistical data published by official institutes were analysed by using contents analysis methods. Lastly, it proceeds to explain the important role that democracy plays in inclusive economic growth.

Economic Modelling, 2011

This paper examines the relationship between democracy and economic growth in 30 Sub-Saharan African countries. As our proxy for democracy we first use the democracy index constructed by Freedom House and then check the sensitivity of our findings using, as an alternative proxy for democracy, the Legislative Index of Electoral Competitiveness (LIEC). We find support for the Lipset hypothesis -in the long run, real GDP Granger causes democracy and an increase in GDP results in an improvement in democracy -in Botswana and Niger with both datasets, for Chad with the Freedom House data only and for Cote d'Ivoire and Gabon with the LIEC data only. Support for the compatibility hypothesis -in the long run democracy Granger causes real income and an increase in democracy has a positive effect on real income -is found for Botswana with the Freedom House data and for Madagascar, Rwanda, South Africa and Swaziland with the LIEC data. Support for the conflict hypothesis -in the long run democracy Granger causes real income and an increase in democracy has a negative effect on real income -is found for Gabon with the Freedom House data and Sierra Leone with the LIEC data. § We thank Rob Brooks, Dietrich Fausten, Fang-Fah Lam, Ingrid Nielsen for several helpful suggestions on earlier versions of this paper which have improved the content and presentation. We also thank Jade Bilardi for research assistance.

The Social Science Journal, 2018

Previous empirical literature focuses on income per capita as a measure for economic development. Using Lipset's modernization hypothesis as our theoretical framework, we contend that this measure does not capture the fundamental quality of economic development and as such may disadvantage low income regions when conducting empirical analysis. Our initial results using income per capita highlight this, showing a negative relationship between income per capita and democracy for sub-Saharan Africa between 1960 and 2010. However when we create a composite measure for economic development by employing the principle component analysis on the indicators that are suggested by Lipset, we obtain positive and significant results for democracy. This evidence suggests that we need to be wary of income per capita as a measure for economic development as the two are not synonymous. Income per capita may not capture other factors that also encompass development in a country.

debate further, recent research suggests that democracy has only an indirect positive effect on economic growth because it increases levels of human capital and quality of life~see Emizet, 2000!.

This research analyses the effects of democracy on human development in sub-Saharan Africa. Theoretically, the idea of development of freedom is incorporated into the classical debate of democracy's impact on development. Empirically, this is tested in a number of quantitative methods and regression models covering the period 1990-2014. Democracy is measured by Freedom House's political rights and civil liberties. Human development is measured by Human Development Index (HDI) factors, such as the Education Index, Life expectancy at birth (LEB) and Gross National Income (GNI). This study covers 48 sub-Saharan African countries and the results support the hypothesis that democracy is the variable with the greatest variance on human development. Moreover, the results indicate that democracy has positive effects on changes in human development. This finding strongly supports the claim that human development is compatible with and even strengthened by political democracy.

2014

This paper analyses the modernisation hypothesis in the sub-Saharan African region. Using a sample of 48 countries from 1960 to 2010 and dynamic panel data analysis, we find a significant and negative relationship between income and democracy, an indication that the hypothesis may not hold in the region. We also investigate further by distinguishing between exogenous and endogenous democracy. The former explains whether external factors, such as the end of the Cold War, as well as regional influence, play a role in the process of democratisation in sub-Saharan Africa. Results indicate that the end of the Cold War has a significant influence on the democratisation process probably because of the pro-democracy policies advocated by international organisations, while regional organisations play no significant role in the region. We also obtain significant results for democracy when we proxy for international organisations with an IMF programme variable.

2017

This article investigates the relationship between democracy and economic growth in five Anglophone West African countries using annual data from 1970 to 2014 and dynamic panel data estimation techniques which control for endogeneity, heteroscedasticity and spatial effects. The findings for the full sample estimation show a negative relationship between democracy and economic growth, however country specific differences apply. Consistent with the sceptical view we conclude that several other factors influence the ability of countries to grow, besides which political regime is in place. These factors among others are capital investments, human capital development, a productive labour force and technological progress.

International Journal of Management Sciences and Business Research, 2019

The study investigated the impact of democracy on poverty alleviation in Africa by employing panel data of 50 African countries for the period of 1996 to 2017. The study used panel data methodologies such as unit root test, correlation matrix, multivariate regression, generalized linear model, dynamic panel data estimation and granger causality test. The study found that democracy has two dimensional relationship with or impact on poverty alleviation. As the study used two proxy measures of democracy thus the rule of law and voice and accountability, the rule of law showed a positive and statistically significant impact on poverty alleviation but voice and accountability showed a negative and statistically significant impact on poverty alleviation. Corruption control has been a major headache in Africa which has been affecting the development of the continent. Perhaps, corruption has a negative and statistically significant impact on poverty alleviation. Moreover, economic growth has the prospect of reducing poverty when all the sectors of the economy are economically viable to produce goods and services to meet the demands of the economic actors. In this regard, governments" effectiveness as in the quality of policy formulation and its implementation which will gain trust and credibility from all stakeholders by ensuring quality public services and quality civil services devoid of governments or political interference to enjoy independence will positively and significant increase poverty alleviation thereby reducing poverty. The study found a bidirectional causal relationship between poverty alleviation and the following variables; economic growth, corruption control, the rule of law and government effectiveness. Also, there is an evidence of unidirectional causal relationship from poverty alleviation to voice and accountability and political stability to poverty alleviation.

This paper analyses the modernisation hypothesis in the sub-Saharan African region. Using a sample of 48 countries from 1960 to 2010 and dynamic panel data analysis, we find a significant and negative relationship between income and democracy, an indication that the hypothesis may not hold in the region. We also investigate further by distinguishing between exogenous and endogenous democracy. The former explains whether external factors, such as the end of the Cold War, as well as regional influence, play a role in the process of democratisation in sub-Saharan Africa. Results indicate that the end of the Cold War has a significant influence on the democratisation process probably because of the pro-democracy policies advocated by international organisations, while regional organisations play no significant role in the region. We also obtain significant results for democracy when we proxy for international organisations with an IMF programme variable.