Ball State University

RESEARCH METHODS POLS 626

GOVERNMENT EFFECTIVESS AND ECONOMIC GROWTH IN SUB-

SAHARA AFRICA.

By:

Nii Narku Nortey

Spring, 2021

1
 EXECUTIVE SUMMARY

The region of Sub-Saharan Africa has experienced low growth rates for an extended period.

Though the region abounds in natural resources, its economic growth has been generally subpar

compared to countries in the developed world. There have been several studies that examined the

growth determinants of the economies of sub-Saharan Africa countries. However, many of these

studies are focused on the traditional growth determinants with very little attention on the role of

the World Governance Indicators on countries' economic growth in sub-Saharan Africa. In recent

times, the focus has shifted to determining the economic performance of countries in the sub-

region. Therefore, the crux of this study is to examine the impact of government effectiveness on

the economic growth of sub-Saharan Africa. The study made use of panel data analysis using a

sample of 43 countries from1996 to 2016. The study revealed that government effectiveness

does not have any significant effect on economic growth of countries in sub-Saharan Africa.

Among the five governance indicators included in the model as controls, only political stability

significantly affected economic growth in sub-Saharan Africa. The study recommends that

governments in sub-Saharan Africa should give priority to all the WGI indicators variables. All

these indicators need to be enhanced to improve economic growth in sub-Saharan Africa. The

study further recommends a public-private partnership between government agencies and the

private sector to enhance the efficient allocation of resources through innovative ideas and

policies. Additionally, the government should invest in research and development to advance

innovative solutions to the complex challenges that hinder productivity in the public sector at

local, regional, national, and international levels.

2
 CHPATER ONE

INTRODUCTION

Sub-Saharan Africa is known for its abundant natural resources, but it has lagged in development

and growth. The region's growth rates have been unsustainable and among the lowest globally,

but research into the dynamics of change has concentrated chiefly on traditional economic

determinants (Acemoglu et al. 2004). Following Barro's (1991) pioneering work, several other

economists have made significant efforts to define the fundamental factors that account for

economic growth differences between and within countries and continents worldwide. For

instance, Sawyer (2010) attests that SSA's economic growth has slowed due to low total factor

productivity growth (TFP). Dollar and Kraay (2003), whiles throwing their support for

macroeconomic policies, averred that trade shares have a positive long-run effect on economic

performance. Stern (1993) incorporated employment and capital in a model and found that

increased energy consumption results in growth in real GDP. Similarly, Dawson (2003) finds

that the economy can improve economic performance through the positive effect on investment.

The earnest desire to understand the development needs of this deprived continent of the globe

indicates that the critical determinants of economic growth might not account for the dynamics

of countries in SSA (Easterly and Levine, 1995). Through the Solow growth model in a multi-

country sample, several scholars have carried out studies and found an inverse and significant

effect of other factors affecting growth aside from the traditional growth determinants. Levine

and Renelt (1992) found that other variables such as income distribution, government size, and

trade openness are critical drivers to economic growth. Other scholars also found institutional

quality as a driver of economic growth and (Sala-I Martin, 1997a, 1997b; Barro, 1991, 1997;

Bloom and Sachs 1998). According to Fayissa and Nsiah (2013), good governance, or the lack

3
thereof, contributes to the disparities in African development. Good governance is a strong

determinant of economic growth, and it helps to understand why countries have different levels

of development.

According to Schneider (1999), good governance is the exercise of authority or power over a

country's affairs and wealth. On the other hand, the United States Agency for International

Development (USAID, 2002) describes good governance as a complex system of interaction

among institutions, practices, functions, and processes characterized by values of accountability,

openness, and participation. The UNDP (2002) defines good governance as striving for the rule

of law, transparency, equity, effectiveness /efficiency, accountability, and strategic vision in

political, economic, and administrative exercise. Many studies have used the World overall

indexes of World Governance Indicators as a proxy for governance (Fayissa and Nsiah 2013;

Muhammad et al. 2015; Kilishi et al. 2013) and institutional quality (Levine and Renelt 1992;

Barro, 1991, 1997; Bloom and Sachs 1998), while controlling for other macroeconomic

determinants of growth. The World Governance Indicators are voice and accountability, political

stability, government effectiveness, regulatory quality, the rule of law, and control of corruption.

According to existing literature, the role of governance indicators in institutions on economic

growth has not been clearly defined with support of relevant evidence (Pistor, 1995; Eweld,

1995). Additionally, only fewer studies have considered how each of these indicators affects sub-

Saharan Africa while controlling for the other governance indicators, the traditional determinants

of growth (labor and capital), and macroeconomic factors of development (Example,

unemployment, inflation, trade, etc.). Therefore, there exists a gap in the literature concerning

the exact role each governance indicator plays in the economic growth dynamics of SSA. Thus,

4
the study examines the relationship between government effectiveness and economic growth in a

sample of 43 countries in SSA spanning from 1996-2016. Specifically, the study aims to:

1. To estimate the impact of government effectiveness on the economic growth of SSA

from 1996 to 2016.

Henceforth, the study intends to find answers to the following questions;

1. Does government effectiveness have any impact on economic growth in sub-Saharan

Africa from 1996 to 2016?

5
 CHAPTER TWO

LITERATURE REVIEW

According to contemporary growth theories, differences in economic growth between countries

and regions can be attributed to factors such as institutional efficiency (Easterly et al., 2004;

Acemoglu et al., 2003a). According to North (1990), governmental institutions and entities can

be defined as humanly-devised constraints that mold people's interactions and influence and

shape the incentives of economic operators. In the presence of good governance, there are higher

chances of prospering economic growth due to the promotion of more sharp divisions of labor,

faster implementation of economic and social policies, and more productive investments (Alam,

Kiterage, & Bizuayehu, 2017). Higher economic growth is facilitated by good governance,

which encourages more effective labor units, more profitable investment, and faster

implementation of social and economic policies (United Nations 2005). According to Hall and

Jones (1999), institutions and government policies shape the economic climate in which people

acquire skills and businesses acquire capital and generate production. Although good

governments can boost economic development by efficiently providing social infrastructure that

prevents diversion, bad governments can cause a public diversion in an economy through

expropriation, confiscatory taxes, and inadequate regulations and laws (Hall and Jones 1999).

Alam et al. (2018) examined the influence of government effectiveness on the economic

development of a panel of 81 countries using a Generalized System Method of Moments (System

GMM) technique. The study discovers that government effectiveness has a substantial positive

impact on economic development. In a survey spanning 73 developed and developing countries

from 1975 to 1990, Adkins and Savvides (2002) found that countries with greater economic

6
freedom have higher growth rates. In a similar vein, Dawson (2003) finds that economic

efficiency can be improved through a positive impact on investment. According to Bassam

(2013), the associations between economic growth and governance quality are highly dependent

on levels of human development and the metrics used to measure governance quality. North

(1990) demonstrates that institutional structure strongly influences how economic and political

results are connected.

Kaufmann and Kraay (2002) analyzed 175 countries in 2000/01, concluding that good

governance is needed for high per capita income and economic growth. Knack came to the same

conclusion (2002). Huynh and Jacho-Chavez (2009) investigated the relationship between

governance and growth using a nonparametric approach. Their results show that three of the six

indices of governance are economically and statistically significant: voice and transparency,

political stability, and the rule of law, while regulatory regulation, corruption control, and

government effectiveness are insignificant. Emara and Jhonsa (2014) investigated the

interrelationship between improved government efficiency and increased per capita income using

the Two-Stage Least Square method for a cross-sectional dataset of 197 countries. Their results

show that the standard of governance has a clear positive and statistically meaningful

relationship with per capita income.

Guisan (2009) compared European countries to the United States and Canada from 2000 to 2007,

looking at the relationship between government efficacy, education, and economic growth. The

findings of the author demonstrate the significance of government effectiveness in economic

growth. Cebula and Foley (2011) examined the impact of high-quality government regulation on

per capita real GDP by using panel data and PLS estimates for OECD countries throughout

7
2003-06. The authors conclude that better regulatory efficiency is positively correlated with

economic growth.

8
 CHAPTER THREE

THEORY AND HYPOTHESES

In recent times, some amount of work has been done, especially concerning the role institutions

tend to play in determining the growth of countries. Given this, several academic researchers

have been conducted to provide further evidence on the impact of governance indicators and how

they affect economic progress. The role of these indicators has not been well defined in some of

the past studies (Pistor, 1995). Therefore, it is essential and timely to determine the exact role of

these governance indicators and other traditional growth determinants in the growth matrix of

SSA countries. Based on the above, the study developed the following hypotheses:

The debate about whether governance indicators have a positive or negligible impact on

economic growth is raging.

Hypothesis (1): The study hypothesized that government effectiveness positively impacts

economic growth in Sub-Saharan Africa.

Hypothesis (2): The study hypothesized that political stability, voice, and accountability,

regulatory qualities, raw of law have a positive impact on economic growth in Sub-Saharan

Africa.

Hypothesis (3): The study hypothesized that control of corruption negatively impacts economic

growth in Sub-Saharan Africa.

The effects of human and physical resources on economic development are debatable. Although

several scholars claim that human and physical capital foster economic growth (Barro, 1992),

9
others argue that human capital and labor do not explain economic growth (Barro, 1992).

(Benhabib & Spiegel, 1994)

Hypothesis (4): The study hypothesized that physical capital positively impacts economic

growth in Sub-Saharan Africa.

Hypothesis (5): The study hypothesized that human capital positively impacts economic growth

in Sub-Saharan Africa.

Although some economists (e.g., Yanikkaya, 2003) argue that net trade (trade openness) harms

economic growth, especially in developing countries, others (e.g., Romer & Frankel, 1999) say

that it has significant positive effects.

Hypothesis (6): The study hypothesized that net trade positively impacts economic growth in

Sub-Saharan Africa.

10
 CHAPTER FOUR

DATA AND ESTIMATION

4.1 Introduction

The chapter focused on various strategies that were adopted to achieve the goals of the study.

Specifically, this chapter looks at the model specification, variable definitions, empirical or

estimation approach, and data sources.

4.2 Model Specification

According to the Solow model, production or growth is a function of capital and labor. In this

model, production is dependent on the amount of capital stock and labor applied in the

production process in the economy (Solow, 1956).

Therefore, the basic model is stated as follows:

Y= f(K, L ).................................................................................................3.1

Where Y=Economic Growth (Real G.D.P.), K= Capital Stock, and L= Labor

Equation 3.1 is adjusted to account for government effectiveness and the selected control

variables. According to Acemoglu et al. (2003a), Apart from the traditional growth determinants

such as capital stock and labor, institutional Quality also constitutes the reasons for the

differences in economic growth between countries and regions. The study assumed a linear

relationship between growth, factors of production, government effectiveness, and control

variables. Therefore, to account for the linearity, the regression model in 3.1 is modified as

follows;

Y = β0+ β1GE+ β2PS+ β3VA+ β4CCo+ β5RL+ β6RQ+ β7K+ β8L+ β9NT+ β10EM+U….3.2

11
GE=Government Effectiveness, PSAV=Political Stability and Absence of Violence, VA= Voice

and Accountability, CCo= Control of Corruption, RL= Rule of Law, RQ= Regulatory Quality,

NT=Net Trade, EM=Employment.

Economic growth in real G.D.P. is the dependent variable. Government Effectiveness is the

primary explanatory variable, U is the error term, and all other variables are the control variables

for the study.

4.3 Variables Definition

The study used the Worldwide Governance Indicators (W.G.I.) and World Development

Indicators (W.D.I.). The variables are defined below.

4.3.1 Economic Growth

G.D.P. is a measure of the total economic value of final goods and services in an economy

(Todaro and Smith, 2011). It is the continuous increase in the output of an economy resulting in

an expansion of economic activities a country. It involves the increase in the inflation-adjusted

market value of the goods and services produced in an economy over time.

4.3.2 Government Effectiveness

Government effectiveness measures the superiority of public services, the Quality and degree of

independence from political demands of civil service, the Quality of policy formulation and

implementation, and the reliability of the government’s ability to ensure the sustainability of

policies.

4.3.3 labor

Labor refers to the effort of a man used in the production process of goods and services. It is the

aggregate of all human action used in the creation of goods and services. These factors determine

12
economic growth in an economy. Ghosh (2011) proved that there is a long-run relationship

between labor and economic growth.

4.3.4 Physical Capital

Capital refers to the machinery, tools, and buildings used to produce goods and services in a

country. It could take the form of computers, buildings, and vehicles used differently based on

the kind of labor the work requires. The amount of capital accumulation in an economy

determines its level of growth. Ellahai (2011) included capital in his model to measure the effect

on economic growth.

4.3.5 Political Stability

Political stability and absence of violence is an index that measures the perceptions of the

likelihood that the government will be destabilized or overthrown by unconstitutional or violent

means, including domestic violence or terrorism.

4.3.6 Voice and Accountability

Voice and accountability show how a country’s citizens can choose their government and enjoy

the freedom of speech, freedom of association, and free media. The level of participation by both

men and women indicates that freedom of association and expression and an organized civil

society are vital to achieving voice and accountability.

4.3.7 Control of Corruption

Control of corruption measures the magnitude to which public power is used for private gain. It

also includes petty and grand forms of corruption and “capture” of the state by elites and

personal interests.

13
4.3.8 Rule of Law

The rule of law measures the extent to which agents have confidence in and abide by society’s

rules, particularly the Quality of contract (private and government) enforcement, the police, and

the courts, as well as the likelihood of crime and violence.

4.3.9 Regulatory Quality

Regulatory Quality measures the capability of the government to formulate and apply

comprehensive policies and regulations that allow and encourage private sector development.

4.3.10 Net Trade

Trade openness involves transferring goods produced in one country to another, either for further

processing or for consumption. Shahbaz et al. (2010) included net trade as a control to estimate

the effects of energy on economic growth.

Table 4.1: Variable Description, Expected Sign of the Coefficient and Data Source

Variable Code Variable Definition Expected Sign Source

GDP Annual Gross Domestic Product growth rate (%) is WDI, 2017
a proxy for economic growth
K Capital is measured as a percentage of GDP + WDI, 2017

L Labor is measured as a percentage of GDP + WDI, 2017

NT NT is measured as the sum of real exports and + WDI,2017

imports and a percentage of G.D.P.
EM EM is measured by the total labor force employed + WDI,2017
expressed as a percentage of the total population.
GE Government effectiveness is measured as a proxy + WGI, 2017
of good governance
CCo Control of Corruption is measured as a proxy of - WGI, 2017
good governance
PS Political Stability is measured as a proxy good + WGI, 2017
governance
RL Rule of Law is measured as a proxy of good + WGI, 2017
governance

14
 RQ Regulatory Quality is measured as a proxy of good + WGI, 2017
governance
VA Voice and Accountability is measured as a proxy of + WGI, 2017
good governance
Source: Author’s Construct, 2021

Note: World Governance Indicators take a value between -2.5 to 2.5

3.4 Data Sources

Data on economic growth and traditional growth-determinant variables was obtained from World

Bank’s Development Indicators (W.D.I.). The institutional quality indicators were gathered from

World Bank’s Governance Indicators (W.G.I.) from 1996 to 2016. The institutional quality

variables are political stability and absence of violence, voice and accountability, control of

corruption, the rule of law, regulatory Quality, and government effectiveness. G.D.P. per capita

growth (annual percentage) is the dependent variable, government effectiveness is the primary

explanatory variable, capital stock, labor, and the other institutional quality indicators constitute

the control variables.

3.5 Data Type, Estimation Strategy, and Analytical Tool

The study made use of a panel data set and simple regression analysis as the estimation strategy.

3.5.1 Data Type

The nature of the variables under observation meant a panel data set was ideal for this type of

study. A panel data set spanning 20 years (1996 – 2016) gathered from 43 Sub-Saharan African

countries were put used for the analysis. As Wooldridge points out, a multiple observation on the

same units makes it easy to control for specific unobserved characteristics in a variable

(Wooldridge, 2016). He went on to say that using multiple observations of a variable from

different times will help with causal inference in cases where inferring causality would be

complex with just a single cross-section data (Wooldridge, 2016).

15
3.5.2 Estimation Strategy

Multiple regression analysis was the estimation strategy for the study. The researcher found this

estimator the most appropriate because it allows for controlling other explanatory variables that

jointly affect the dependent variable. Thus, it is easy to apply the ceteris paribus principle

(keeping other variables constant) to our interpretation. When dealing with nonexperimental

results, the use of ceteris paribus is essential for testing economic theories and assessing policy

effects (Wooldridge, 2016). The multiple regression analysis was used to deal with economic

variables and government policies, including several control variables.

3.5.2 Data Analytical Tool

The regression analysis was computed using the Statistical Package for Social Sciences (SPSS).

In the social sciences, it is the most commonly used programming tool for statistical analysis.

SPSS is an incredibly effective software for manipulating and deciphering survey data, thanks to

its focus on statistical data analysis.

16
 CHAPTER FIVE

RESULT AND DISCUSSION

5.1 Heteroskedasticity Test

The researcher performed the Breusch-Pagan test to confirm the presence or absence of

heteroskedasticity. None of the variables explained the square residuals at the 5% critical value.

Additionally, the F-test for joint statistics was 1.67 with a p-value of 0.082 (See Appendix A). It

is not significant at the 5% critical value, indicating a very small or the absence of

heteroskedasticity.

5.2 Descriptive Statistics

The descriptive statistics cover only the mean, standard deviation, minimum and maximum

values. Table 4.1 reveals these results.

Table 5.1 Descriptive Statistics

Variables (N) Min Max Mean Std. Deviation

GDP 903 -36.83 140.5 2.45 7.93
Capital (K) 725 -294.16 2357.68 12.83 94.85
Labor (L) 861 453006.0 848442 631350.3 119482.2
Voice & Accountability (VA) 903 -2.23 9.85 -.622 .79
Government Effectiveness (GE) 903 -2.19 1.11 -.70 .68
Regulatory Quality (RQ) 903 -2.29 1.13 -.65 .61
Control of Corruption (CCo) 903 -1.81 1.22 -.64 .59
Political Stability (PS) 903 -2.04 1.28 -.55 .89
Rule of Law (RL) 903 -2.13 1.08 -.70 .64
Employment (EM) 882 35.28 88.94 64.28 13.41
Net Trade (NT) 862 17.85 311.36 73.13 36.46
Valid N (Listwise) 692

17
The standard deviation (7.93) for GDP shows a considerable variation from the mean (2.45). It

implies that there is a wide variation in growth rates among the countries in SSA. Therefore, we

can describe the growth rate across all countries in the sample as unstable and inconsistent. The

minimum (-294.16) and maximum (2357.68) values of capital are very far away from the mean

(94.85), indicating a wide discrepancy in the data set for all the countries in SSA. The

widespread among the variables is further confirmed by a standard deviation of 94.85. It

indicates variations and inconsistency in the performance of capital as a factor of production.

The mean (631350.3) for labor shows that it plays a perfect role in performance across all sub-

region’s countries. The standard deviation (119482.2) is below the mean, indicating that the data

is spread close to the mean. It shows a consistent performance of labor in all the countries across

the region.

5.2 Regression Analysis

Table 5.2 Effects of Government Effectiveness on Economic Growth in Sub-Sahara Africa

Variables Model 1 Model 2 Model 3

Government Effectiveness (GE) 0.096 (.390) 0.933 (.786) 0.893 (.878)
Voice & Accountability (VA) 0.115 (.500) 0.052 (.722)
Regulatory Quality (RQ) -1.174(.917) -0.670 (1.148)
Control of Corruption (CCo) -0.671(.889) -0.484(.964)
Political Stability (PS) 1.083 (.473)** 1.626 (.577) **
Rule of Law (RL) -.786 (1.288) -1.155 (1.563)
Capital (K) .007 (.003)**
Log-Labor (L) 0.014 (.380)
Employment (EM) 0.028 (.025)
Net Trade (NT) -0.002 (.010)
Constant 2.521 (.381)*** 2.029 (.414) *** 0.562 (3.123)
(Adj.) R2 -.001 .005 .013
N 902 902 695
18
*: P< .10, **: P< .05, ***: P< .01 Note: Standard Errors are in paratheses
Dependent Variable: GDP

5.2.1 Discussion of Result

Table 2 shows the regression results for the three models. Model 1 tested only the primary

explanatory variable (government effectiveness) on GDP per capita. The result shows that

government effectiveness does not explain GDP in Sub-Sahara Africa. Model 2 tested all the

World Governance Indicators on GDP. The result revealed that only political stability is

statistically significant with GDP at the 5% critical value. The relationship was also positive.

Model 3 tested all the explanatory variables on GDP. The result showed that political stability

and capita GDP have positive and significant effects on GDP at the 5% critical value. The rest of

the explanatory variables were insignificant to GDP; thus, they could not explain the variable in

GDP in the region.

The regression results showed an insignificant and positive relationship between Government

Effectiveness and real GDP per capita growth in SSA. This finding does not conform to the

study of Kilishi et al. (2013) and Guisan (2009). Their studies on Africa predicted a positive and

significant relationship between government effectiveness and economic growth in Africa.

Similarly, Guisan (2009) compared European countries to the United States and Canada from

2000 to 2007 and found a significant relationship between government effectiveness and

economic growth.

The positive and statistically significant relationship between political stability and GDP per

capita is inconsistent with the findings of Yildirim et al. (2015) but consistent with Sokoloff and

Engerman (2000). Yildirim et al. found political stability to have a negative impact on the

macroeconomic performance of developing countries. However, Sokoloff and Engerman (2000)

opined that stable democracy reduces inequality and enhances the economic prosperity of
19
developing countries. Therefore, this study’s findings on political stability confirm the

conclusions of Sokoloff and Engerman (2000).

The positive and statistically significant relationship between capital and GDP per capita means

that a capital increase will increase per capita GDP growth in SSA. The coefficients of physical

capital being significant and positive conform with the a priori expectation that capital

contributes positively to economic growth. The results confirm the relevance of the augmented

Solow model in explaining Africa’s growth (Solow 1956). Investment in physical and human

capital is vital in promoting rapid growth in Africa.

20
 CHAPTER SIX

CONCLUSION AND RECOMMENDATIONS

6.1 Conclusion

The study attempted to estimate the effect of government on economic growth in sub-Saharan

Africa. Based on the results, the study concludes that government policies and economic

regulations do not impact economic growth in Sub-Sahara Africa. The study further concludes

that only political stability out of the six World Governance Indicators (WGI) is crucial to

economic growth and development in Sub-Sahara Africa.

6.2 Recommendations

In the first place, governments in sub-Saharan Africa should prioritize all the WGI indicators

variables since all the indicators showed an insignificant relationship with GDP except for

political stability. All these indicators need to be enhanced to improve economic growth in sub-

Saharan Africa.

The study further recommends a public-private partnership between government agencies and

the private sector to enhance the efficient allocation of resources through innovative ideas and

policies. Additionally, the government should invest in research and development to advance

innovative solutions to the complex challenges that hinder productivity in the public sector at

local, regional, national, and international levels.

21
 REFERENCES

Acemoglu, D. et al. (2003a), “Institutional causes, macroeconomic symptoms: volatility, crises

and growth”, Journal of Monetary Economics

Acemoglu, D., Aghion, P., Griffith, R. and Zilibotti, F. (2003a), “Technology, hold-up, and
vertical integration: what do we learn from micro data?”, mimeo, IFS, London.

Acemoglu, D., Johnson, S. and J. Robinson, (2004), “Institutions as the Fundamental Cause of
Long-Run Growth” Prepared for the Handbook of Economic Growth

Adkins, M. and Savvides, A. (2002), “Institutions, freedom, and technical efficiency”, Southern
Economic Journal.

Barro, R. J. (1991) Economic Growth in a Cross Section of Countries. The Quarterly Journal of
Economics

Bassam A., A. (2013), “The Relationship Between Governance and Economic Growth During
Times of Crisis”, European Journal of Sustainable Development, 2 (1).

Benhabib, J., & Spiegel, M. M. (1994). The role of human capital in economic development
evidence from aggregate cross-country data. Journal of Monetary economics, 34(2), 143-
173.

Bloom D. and J. Sachs (1998), “Geography, Demography and Economic Growth in Africa”,
Brookings Papers on Economic Activity, Dawson, J. (2003), “Causality in the freedom-
growth relationship”, European Journal of Political Economy.

Cebula, R., & Foley, M. (2011). A Panel Data Study of the Effects of Economic Freedom,
Regulatory Quality, and Taxation on the Growth Rate of Per Capita Real GDP.

Dollar, D. & Kraay, A. (2003). Institutions, Trade and Growth. Journal of Monetary
Economics,.Easterly W. and R. Levine (2001), “It’s not Capital Accumulation: Stylized
Facts and Growth Theories” World Bank Economic Review.
22
Easterly, W. and Levine, R. (1995), “Africa‟s growth tragedy: a retrospective, 1960-89”, World
Bank Policy Research Working Paper

Eweld, W. (1995), “Comparative jurisprudence (II): the logic of legal transplants”, American
Journal of Comparative Law.

Fayissa, B., & Nsiah, C. (2010). The impact of remittances on economic growth and
development in Africa. The American Economist, 92-103.

Guisan, M. C. (2009). Government effectiveness, education, economic development and well-

being: Analysis of European countries in comparison with the United States and Canada,
2000-2007. Applied Econometrics and International Development, 9( 1 )

Guisan, M.C.(2006) “Industry, Foreign Trade and Development: Econometric Models of Europe
and North America, 1965-2003”, International Journal of Applied Econometrics and
Quantitative Studies, Vol. 3-1.

Hall, R. E. and C. I. Jones (1999), Why Do Some Countries Produce So Much More Output Per
Worker.

Huynh, K. P., & Jacho-Chavez, D. T. (2009). Growth and governance: A nonparametric analysis.
Journal of Comparative Economics, 37(1), 121-143.

Kaufmann, D. & Kraay, A. (2002), “Growth Without Governance”,Economia. 3(1): 169– 229.

KilishiA. A., Mobolaji, H. I. Yaru M. A. and Yakubu A. T. (2013), Institutions and Economic
Performance in Sub-Saharan Africa: A Dynamic Panel Data Analysis, Journal of African
Development Fall 2013

Knack, S. (2002). Governance and growth: measurement and evidence.

Levine, R. and D. Renelt (1992) A Sensitivity Analysis of Cross-Country Growth Regressions.

The American Economic Review, Mankiw.

23
North, D. C. (1990), “Institutions, Institutional Change, and Economic Performance”, New York:
Cambridge University Press.

Pistor, K. (1995), “Law meets the market: matches and mismatches in transition economies”,
World Development Report 1996: From Plan to Market, World Bank, Washington, DC.

Romer, D. H., & Frankel, J. A. (1999). Does trade cause growth?. American Economic Review,
89(3), 379-399.

Sala-i-Martin X. (1997a), “I Just Ran Two Million Regressions”, American Economic

Review,opl,

Sala-i-Martin, X. (1997b), “I Just Ran Four Million Regressions”, Columbia University, mimeo
paper

Sawyer, W. C(2010), Institutional Quality and Economic Growth in Latin America, Texas
Christian University, w.c.sawyer@tcu.eduGlobal Economy Journal.

Schneider, H. (1999). Participatory Governance: The Missing Link for Poverty Reduction,
Policy Brief No. 17, Paris: OECD Development Centre. Sen A. (1999). Development as
Freedom, Alfred Knopf Publisher (New York: NY)

Solow, R. M. ﴾1956﴿, „A Contribution to the Theory of Economic Growth, ‟ Quarterly Journal of

Economics.

Y anikkaya, H. (2003 ). Trade openness and economic growth: a cross-country empirical

investigation. Journal of Development economics, 72(1), 57- 89.

Wooldridge, J. M. (2016), Introductory Econometrics: A Modern Approach

24
 APPENDIX A

ANOVAa
Sum of Mean
Model Squares df Square F Sig.
1 Regression 8631993.256 10 863199.326 1.677 .082b
Residual 318654385.7 619 514788.992
50
Total 327286379.0 629
07
a. Dependent Variable: Ressquare
b. Predictors: (Constant), VA, LogL, K, NT, EM, Cco, PS, GE, RQ, RL

Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 356.063 308.403 1.155 .249
GE 71.014 83.765 .069 .848 .397
K .146 .285 .020 .513 .608
LogL -43.430 37.835 -.054 -1.148 .251
RQ -84.181 109.747 -.073 -.767 .443
Cco -3.083 92.749 -.003 -.033 .973
PS 109.357 55.437 .131 1.973 .059
RL -192.468 152.071 -.168 -1.266 .206
EM -.068 2.464 -.001 -.028 .978
NT -1.382 .978 -.066 -1.412 .158
VA -11.181 71.693 -.011 -.156 .876
a. Dependent Variable: Ressquare

25