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Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Following a global vector autoregressive (GVAR) approach, this paper presents new evidence on the validity of international transmission of economic shocks from key trading partners as sources of macroeconomic fluctuations in sub‐Saharan African (SSA) countries. The GVAR model was estimated for 21 SSA countries grouped into three country classes—oil‐rich, other‐resources‐rich and non‐resource‐based economies, to account for output shocks from crucial trading partner countries—United States, United Kingdom, China and Europe. Furthermore, the generalized forecast error variance decompositions results reveal that output shocks from key trading partners constitute significant contributors to changes in key macroeconomic indicators—real gross domestic product, inflation, exchange rate and short‐term interest rate, in the SSA region. The generalized impulse response functions indicate that these economic shocks have more significant impacts on oil‐rich countries than on other country groups. A key recommendation from this study is that SSA countries, especially the resource‐rich economies, need to strengthen and diversify their economic structure, including the trade basket. [ABSTRACT FROM AUTHOR]

Using a sample of 45 Sub‐Saharan African countries over the 2000–2019 period, this paper contributes to the ongoing debate on the health effect of economic growth. Specifically, it investigates the direct effect of economic growth on child mortality as well as the indirect effect through environmental degradation. Findings from panel‐corrected standard errors, feasible generalized least squares, and Driscoll and Kraay standard errors show that economic growth has significantly decreased infant and under‐five mortality rates in Sub‐Saharan Africa. However, results from the mediation analysis reveal that, beyond its direct effect, economic growth has an indirect effect on under‐five mortality through greenhouse gas emissions. Implementing green growth policies should help minimize the indirect negative effect of economic growth on child mortality in Sub‐Saharan African countries. [ABSTRACT FROM AUTHOR]

Numerous sub‐Saharan African countries depend heavily on foreign aid. This paper explores the impact of foreign aid on economic growth in the continent using a finite mixture model. Contrary to previous studies, we hypothesise that the effect of aid on growth differs across groups of countries with similar but unobserved characteristics. The paper incorporates the potential presence of hidden heterogeneity and tries to explain group membership of countries by using various metrics of institutional variables. Focusing on a sample of 25 countries, we find that the impact of foreign aid on growth differs across three different groups of countries. Moreover, we find that aid works best in countries with effective government, good regulatory quality and low corruption. The results are robust to a battery of robustness checks. The paper underlines the importance of incorporating the heterogeneity in growth process in studies on aid effectiveness and provides evidence that sub‐Saharan African countries should undertake deep governance reforms to benefit from foreign aid. [ABSTRACT FROM AUTHOR]

This paper employs a spatial dependency framework to examine intermediary roles played by trade, institutional quality and natural resource endowment in determining direct and indirect (spillover) effects of inbound foreign direct investment (FDI) on economic growth. We develop a number of spatial mechanisms to assess how these intermediary factors limit and/or enhance the effect of FDI on economic growth. In particular, we test whether different levels of resource rents, severity of civil conflict and openness to international trade are statistically different in attenuating direct and indirect (spillover) effects of inbound FDI on growth. Last, we conduct a test of asymmetry to investigate whether the effect of FDI on growth is statistically different from zero in three democratic (autocratic) regimes, that is, low democratic (high autocratic), moderate democratic–autocratic and high democratic (low autocratic) societies. A number of insightful contributions to the economic growth‐FDI literature can be extracted from our analyses. First, results indicate that inbound FDIs on their own have positive and significant effect on economic growth. However, the positive FDI effect on growth is significantly dampened by the negative intermediary role of civil conflict. Second, we find that, the more opened sub‐Saharan African economies are to international trade, the greater is the impact of FDI on growth. However, trade among African countries as a share of their economies plays insignificant intermediation role on direct and indirect effects of FDI on growth. Third, we find that an increase in resource rents as a share of the economy significantly reduces direct and spillover effects of inbound FDI on economic growth. Last, our analysis indicates that both low democratic (high autocratic) and high democratic (low autocratic) regimes do accelerate the positive impact of FDI on growth. However, results indicate a slow‐down effect of FDI on growth under moderate democratic–autocratic regimes. This particular finding suggests that the intermediary role of democracy in determining the effect of FDI on economic growth is non‐linear. A number of policy implications can be extrapolated from our analysis. Most importantly, trade policies, which boost integration of sub‐Saharan African countries and open up the continent to the rest of the world, are likely to play major intermediation roles in accelerating the positive effect of FDI on growth. [ABSTRACT FROM AUTHOR]

This paper contributes to the understanding of the long‐run and short‐run drivers of income inequality in sub‐Saharan Africa (SSA) and its sub‐regions based on the evidence from bootstrap cointegration and autoregressive distributed lag (ARDL) model. The findings from the bootstrap cointegration test reveal a long‐run relationship exists for almost the entire SSA and its sub‐regions for the dependent variable, independent variables and the overall models. The exception being West Africa where the dependent variable was not statistically significant but the independent variables and overall model were cointegrated. The results from the ARDL show that for SSA, in the long run, economic growth decreases the uneven distribution of income whereas in the short run economic growth increases inequality. A reduction in corruption in the short run and long run makes inequality fall. Population growth in the long run and short run aggravates the distribution of income. A rise in the rate of unemployment in the short run and long run has a positive relationship with income inequality. Trade globalization in the long run heightens inequality but is not significant in the short run. [ABSTRACT FROM AUTHOR]

Over the past four decades, many economies have striven to find permanent solutions to persistent increases in public deficits and deterioration of growth. For most economies, the solution to this problem was the adoption of fiscal rules. This paper presents empirical evidence on the effects of fiscal rules on fiscal performance and economic growth using a dataset of 43 countries in Sub‐Saharan Africa over 27 years. The study applies simultaneous equation models to determine the relationship between performance and growth in the public sector and also to avoid structural equation and endogeneity biases. The results show that fiscal rules significantly foster fiscal performance and decelerate growth. The study further finds the expenditure rules to be most effective in influencing fiscal balance and economic growth. The robust estimates further confirm that expenditure rules and government spending efficiency are necessary for promoting fiscal outcomes and economic growth. The study recommends the implementation of more revenue rules, debt rules and balance budget rules to ameliorate the negative effects of government spending on economic growth. In addition, Sub‐Saharan African economies should carefully consider the rules applied to government spending since fiscal rules on productive spending will impede economic growth. [ABSTRACT FROM AUTHOR]

The effect of financial sector development on economic growth is among the main debatable issue in economics and policymaking. Thus, by using different financial sector dimensions, this research tried to look at the effect of financial sector development on the economic growth of 25 sub‐Saharan Africa countries for the period 2010–2017. Precisely, three dynamic panel data models that look at the effect of financial sector depth, access, and efficiency on economic growth were estimated by two‐step system GMM estimation. In this research, credit extended to the private sector per GDP, commercial bank branch per 100,000 adult population, and Return to assets were used as a proxy and measures for financial sector depth, access, and efficiency respectively. Accordingly, the results revealed that financial sector depth, access, and efficiency have a positive and statistically significant effect on these countries' economic growth. Therefore, it is recommended that the concerned bodies that broadening the depth of financial institutions by giving more credit to the private sector is essential. Besides, the financial institutions will have to be expanded to increase their accessibility to the mass and take some measures to promote their efficiency. [ABSTRACT FROM AUTHOR]

This paper evaluates the impact of financial development on economic growth in a sample of 32 Sub‐Saharan Africa (SSA) countries. The countries were grouped into four sub‐regions, and data were collected for the period 1990–2016 on finance and growth indicators on an annual basis. In the estimation procedure, panel estimation and dynamic panel techniques were used. When the disaggregated components of financial development variables were used, findings, among others, reveal the role of credit to the private sector by banks (CPB) even though mixed, to have more impact on growth followed by broad money (BM) and liquidity liability (LL). However, an aggregated index of the financial development indicators via principal component analysis and their simultaneous interaction with human capital improvement brought about a greater positive impact on growth throughout the sub‐regions and the entire SSA. [ABSTRACT FROM AUTHOR]

Commodity price shocks are an important type of external shock and are often cited as a problem for economic growth in Sub-Saharan Africa. We choose nine Sub-Saharan African countries that are heavily dependent on a single agricultural commodity for a significant portion of their income. This paper quantifies the impact of agricultural commodity price shocks using a structural non-linear dynamic model. The novel aspect of this study is that we determine whether the response of per capita GDP for the selected Sub-Saharan African countries is different to unexpected increases in agricultural commodity prices as opposed to decreases in prices. We conclude that there is very little evidence that an unanticipated price increase (decrease) will lead to a significantly different response in per capita incomes. [ABSTRACT FROM AUTHOR]

The purpose of the study is in two fold. First, the study examines the impact of language, history, and culture in Anglophone and Francophone countries on the rate of unemployment and economic growth. Second, the study explores the extent to which sustainable entrepreneurship influences the rate of unemployment, and economic growth in Anglophone and Francophone (A&F) countries. The study employed a descriptive and quantitative research design where a longitudinal data were sourced from the World Development Indicators and World Bank Entrepreneurship databases on 12 and 9 Francophone and Anglophone countries respectively. The random effect and the generalized method of moments (GMM) regression models were employed to attain the objectives of the study. The findings of the study revealed that there is a significant negative effect of sustainable entrepreneurship on unemployment; sustainable entrepreneurship has a positive significant effect on economic growth; and also, history and culture were found to have a significant impact on unemployment reduction and economic growth. However, language was found to have an insignificant influence between A&F countries suggesting that the ability of sustainable entrepreneurship to minimize the rate of unemployment and boost economic growth is generic irrespective of linguistic factors. [ABSTRACT FROM AUTHOR]

This paper examines the causal relationship between financial development and economic growth using data for 17 countries in Sub-Saharan Africa. The analysis is conducted using panel cointegration and causality tests which take account of heterogeneity between countries which arises as a result of different country intercepts and varying regression coefficients slopes across countries. The results show that there is homogenous bi-directional causality between financial development and economic growth. This result is robust to alternative measures of financial development and implies that for these Sub-Saharan African countries, both the real and financial sectors are complementary to each other and their simultaneous development should be encouraged. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between financial deregulation and current account imbalances in a panel of 14 Sub‐Saharan African countries over the period 1990–2015. While there are plethora of studies linking financial (de)regulation and economic crisis, the relationship between financial deregulation and current account imbalances has received little attention to date in the growth literature. Relying on the Classical‐Keynesian theoretic perspective, the study adopted the fixed‐effects panel least square estimation technique to determine the effects of financial reforms on current account balance. Our results are robust, suggesting a significant but negative relationship between financial reforms and current account balance. The results further suggest that factors that positively affect current account balance include terms of trade, inflation rate, gross domestic savings, per capita income, and net foreign assets. A policy shift towards improving terms of trade, and gross domestic savings, through expansion in aggregate output and devaluation of the domestic currency will increase internal market competitiveness within the region. [ABSTRACT FROM AUTHOR]

Using a sample splitting approach that does not impose an exogenous quadratic term, we examine the effect of financial development on economic growth in sub‐Saharan Africa by allowing the link to be mediated by the level of institutions. Our findings reveal a disproportionate growth‐enhancing effect of finance, given countries' distinct level of institutional quality. More specifically, when the International Country Risk Guide‐based measure of institutions is used as the threshold variable, below the optimal level of institutional quality, financial development does not significantly promote economic growth. For countries with institutional quality above the threshold, higher finance is associated with growth. However, when institutions are measured by World Governance Indicators proxy, we find a significant effect of financial development, irrespective of whether a country is below or above the threshold. Interestingly, the growth‐enhancing effect of finance is greater for low‐institution countries relative to high‐institution countries. Thus, through its ability to provide some crucial roles, the well‐developed financial sector may also perform the function of sound institutions in influencing economic growth. [ABSTRACT FROM AUTHOR]

Beginning from the early 1980s countries in Sub-Saharan Africa embarked on financial liberalization policies with a view to reversing the ill-effects of financial repression. This paper provides a survey of financial liberalization in Sub-Saharan African countries over the period 1980 to 2004. Our review of empirical studies showed that financial liberalization has had diverse and contrasting effects on savings, investment and economic growth. Most studies found a significant positive effect of financial liberalization on investment whereas its effect on savings has been largely insignificant. The evidence on the effect on economic growth is inconclusive as different studies find contrasting results. It is found that financial liberalization policies have not had the desired and expected results as both financial and macroeconomic variables have not improved following financial liberalization in these countries. This calls for a rethinking of financial liberalization in Sub-Saharan African countries. It is important that financial liberalization is carried out in a stable macroeconomic environment. In addition to this, there should be a building and reform of institutions and the strengthening of prudential regulation. Following this, financial liberalization can be embarked upon but it must be properly sequenced and not rushed. [ABSTRACT FROM AUTHOR]

Although credit availability is essential for economic growth, the information asymmetry problem inhibits the credit creation function of financial institutions. Among other means, information‐sharing offices (ISOs) have been established, including private credit bureaus and public credit registries to provide information on the financial characteristics of citizens to reduce information asymmetry. From this background, this study used an explanatory research design with a longitudinal (panel) data approach to assess whether the coverage of information by ISOs affects sectorial and overall economic growth among sub‐Saharan African (SSA) countries using the system generalized method of moments technique on data from 2005 to 2019. The results highlight that information coverage by ISOs enhances sectorial and overall economic growth by solving the information asymmetry problem. From the findings, governments in SSA countries are encouraged to support public credit registries to effectively perform their mandate while providing incentives to attract investments in private credit bureaus since they contribute to economic growth. [ABSTRACT FROM AUTHOR]

Sub‐Saharan Africa's (SSA) high economic growth coincides with an increase in the level of poverty. In a panel of 40 SSA countries over a 30‐year period, while accounting for the potential spillover effect of poverty in the region. The study found that economic growth recorded over the years has not translated to poverty reduction, particularly, in resource‐rich economies of SSA. The result also shows that income inequality worsens the effect of economic growth on poverty and that the poverty‐reducing effectiveness of growth varies considerably across sectors, across space, and over time. The research findings suggest that governments across the region, particularly, in oil‐exporting countries in SSA must diversify the economy away from oil (toward the service sector) to reduce poverty in the region. [ABSTRACT FROM AUTHOR]

The aim of this article is to analyse the role of trade on sub‐Saharan countries growth considering the effect of governance and ethnic diversity. We start by the framework of the augmented Solow growth model in which we include a set of control variables like trade as openness measure. The estimated model uses Pooled Mean Group technique on a sample of 44 countries of sub‐Saharan Africa during 1980–2017. It emerges that trade has a positive and significant influence on per capita income in the sub‐Saharan zone. This positive effect can also be empowered by improving the level of governance and by ethnic fragmentation. This fact shows the importance of a good political governance and the mastering of trade policies to gain more from trade openness for these countries. [ABSTRACT FROM AUTHOR]

Copyright of Politics & Policy is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study investigates the nexus between economic growth, financial development, and renewable energy consumption in Sub‐Saharan African countries. Using a dynamic approach and seemingly unrelated regressions (SUR) from 48 countries over the period 2000–2019, the findings show that financial development, government expenditures, capital, international trade, education, and the quality of governance have positive impacts on economic growth while inflation has a negative effect. In the long run, energy consumption and foreign direct investments increase economic growth only in high income and upper middle‐income countries (HI‐UMIC). In contrast, in lower middle‐income countries (LMIC) and low income countries (LIC), the cost of transforming renewable energies is a burden for growth. This reverse effect on growth in LMIC and LIC is amplified by natural resource dependence and foreign direct investments (FDI) volatility. Furthermore, renewable energy consumption is driven by financial development, growth, urbanization, foreign direct investment, education, and the quality of governance via scale effect. From the results, new insights for policymakers such as fiscal policies, trade‐led growth policies, and monetary policies, are provided to support the renewable energy sector, enhance financial development and economic growth. [ABSTRACT FROM AUTHOR]

Many African countries have experienced episodes of weak growth since 1970 through the 2000s. A fundamental intermediation gap in Sub‐Saharan Africa (SSA) is the extremely limited financing for medium to long term lending facilities to promote growth. Thus, given the importance of financial development on economic growth, this study investigates the impact of financial development on economic growth in SSA, which is sub‐divided into low‐, middle‐ and upper‐income groupings to ascertain whether differences in income levels across countries affect the relative impact of finance on growth. The study adopts the dynamic and static panel data model to analyse 30 SSA countries using annual data over the 1985–2015 period. The findings indicate that financial depth and financial intermediation reduce per capita income growth in low‐ and middle‐income countries. However, it increases growth in upper‐income and the overall sample of SSA countries. Credit supply positively impacts growth in low‐income countries but exerts a significantly negative impact on growth in middle‐income and the overall sample of SSA countries. Financial liberalisation promotes growth in upper‐income and the overall SSA. However, it reduces growth in low‐ and middle‐income countries. Financial development and financial liberalisation are important factors that affect economic growth given different income levels. [ABSTRACT FROM AUTHOR]

The African Growth and Opportunity Act (AGOA) is intended to increase exports and economic growth in sub‐Saharan Africa by providing trade preferences to eligible countries. While previous research has generally found a positive relationship between AGOA and exports, no previous research has investigated the relationship between AGOA and economic growth. We explore the dynamic relationship between AGOA and economic growth in sub‐Saharan Africa by applying the local projection method (American Economic Review, 95, 2005 and 161) to estimate impulse responses. We find that a country's becoming eligible for AGOA preferences is associated with higher growth rates in the future, but that this effect may not be immediate, highlighting the importance of exploring the dynamic relationship between AGOA and growth. [ABSTRACT FROM AUTHOR]

Until recently, it has been argued in economic theory that regional integration and trade agreements among developing countries may achieve negative growth effects. This study tests empirically the effects of such South-South agreements on growth and convergence. All three world regions in question are considered: South America, Southeast Asia, and Sub-Saharan Africa. A comprehensive panel data analysis is conducted that distinguishes between the problems of testing for stronger growth and accelerated convergence, respectively. The data indicate that the considered South-South agreements promote both. [ABSTRACT FROM AUTHOR]

We analyse the relationship between public debt, economic growth and inflation in a group of 52 African economies between 1950 and 2012. The results indicate that the limits of public debt are negatively related to economic growth and exhibit, from a given level of debt, an inverted U behaviour regarding the relationship between economic growth and public debt. Briefly, the high levels of public debt are coincident with reduced rates of economic growth and rising levels of inflation. Our results for three specific geographical areas resemble those of the overall analysis, despite some differences. In North African countries, the growth rates of the gross domestic product ( GDP) and inflation also show an inverted U behaviour as the ratio of public debt/ GDP increases. The highest rate of economic growth is recorded when the ratio of public debt/ GDP is below 30% of GDP and corresponds to an average inflation rate of 5.33%. An identical behaviour of the GDP growth rates and inflation also appears in Sub-Saharan countries until the third interval (60-90%). However, the highest growth rate of the GDP and GDP per capita is registered when the public debt/ GDP ratio is in the second interval (30-60%). For the countries of the Southern Africa Development Community, the highest average rate of economic growth (6.8%) is similar to North African countries, when the ratio public debt/ GDP is below 30% of GDP, with an average inflation rate of 11%. A number of robustness analyses were performed and the great majority of them confirm the general analysis. [ABSTRACT FROM AUTHOR]