Acta Universitatis Danubius. Œconomica, Vol 15, No 3 (2019)

The Impact of Governance on Economic Development in West Africa: A system GMM dynamic panel approach

Joseph Olarewaju Afolabi

Abstract


This paper examines the impact of governance on sustainable development in West Africa from 2002 – 2016. It adopts the system GMM approach, using all the six governance indicators, which include voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. The results show that voice and accountability, political stability, government effectiveness and rule of law are positively related to development, with government effectiveness shown to have that largest impact, while regulatory quality and control of corruption are shown to be indirectly related to development in the short-run. However, in the long-run, all governance indicators are directly related to development in West African countries, with political stability and regulatory quality having the largest impact.


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