Governance, Public Expenditure, Trade and Poverty Reduction in Sub-Saharan African Countries
Abstract
When policies and programmes are designed and implemented successfully by governments, it tends to improve development indices such as reducing poverty, when governance is good. The paper examined the impact of governance, public expenditure and trade on poverty reduction in some selected Sub-Saharan African countries, using Pool Mean Group (PMG) with data spanned for 21 years (1996-2016). The results show a long-run association between governance, public expenditure, trade and poverty reduction in SSA. Also, control of corruption, political stability, government expenditure, and trade reduces poverty by enhancing the Human Development Index (HDI) in the long run. This outcome implies that improving governance (control of corruption and political stability) is vital for reducing poverty as it increases the adequate performance of public expenditure and as well as promote trade in SSA.
Keywords
Full Text:
PDFReferences
Abu, N., Karim, M.Z.A., & Aziz, M. I. A. (2014). Low savings rates in the Economic Community of West African States (ECOWAS): The role of the political instability-income interaction. South-East European Journal of Economics and Business, 8(2), 53–63.
Acharya, S. & Nuriev, S. (2016). Role of Public Investment in Growth and Poverty Reduction in Transition Economies. Journal of Reviews on Global Economics, 5, 310–326.
Aisen, A. & Francisco, J. V. (2013). How Does Political Instability Affect Economic Growth? European Journal of Political Economy, 29, 151–167.
Alesina, A. & Perotti, R. (1996). Income distribution, political instability, and investment. European Economic Review-Elsevier Science, 40(I996), 1203–1228.
Anderson, E., d’ Orey, M. A. J., Duvendack, M., & Esposito, L. (2018). Does Government Spending Affect Income Poverty ? A Meta-regression Analysis. World Development, 103(C), 60–71.
Bain, L.E; Awah, P.K; Geraldine, N; Kindong, N.P; Sigal, Y; Bernard, N. & Tanjeko, A. T. (2013). Malnutrition in Sub – Saharan Africa: burden, causes and prospects. Pan African Medical Journal, 15(120), 120.
Bakhtiari, S., & Meisami, H. (2010). An empirical investigation of the effects of health and education on income distribution and poverty in Islamic countries. International Journal of Social Economics, 37(4), 293–301.
Baltagi, B. H. (2005). Econometric Analysis of Panel Data (Third). West Sussex, England: John Wiley & Sons, Ltd.
Boqiang, L. (2005). Government expenditure and poverty reduction in China. Economic Research Journal, 1, 27–37.
Brennan, K. (2018). Identifying the Multiple Causes of Poverty in Africa. The Borgen Project. Bogen Project.
Chemingui, M. A. (2007). Public Spending and Poverty Reduction in an Oil-Based Economy : The Case of Yemen. Washington, DC.
Chetwynd, E., Chetwynd, F. & Spector, B. (2003). Corruption and Poverty : A review of Recent Literature. Management Systems International, Washington, DC.
D’Agostino, G., Dunne, J. P., & Pieroni, L. (2016). Corruption and growth in Africa. European Journal of Political Economy, 43, 71–88.
Dankumo, A.M., Ishak, S., Bani, Y. & Hamza, H. Z. (2019). The Relationship between Public Expenditure, Corruption and Poverty in Nigeria. Jurnal Ekonomi Study Dan Penbengunan, 10(4), 76–89.
Dankumo, A.M., Ishak, S., Oluwaseyi, Z.A., & Onisanwa, I. D. (2019). Does Okun’s Law Explain the Relationship between Economic Growth and Unemployment in Nigeria? Jurnal Ekonomi Malaysia • Malaysian Journal of Economics, 53(3), 153–162.
Del Monte, A., & Papagni, E. (2001). Public expenditure, corruption, and economic growth: The case of Italy. European Journal of Political Economy, 17(1), 1–16.
Del Monte, A., & Papagni, E. (2007). The determinants of corruption in Italy: Regional panel data analysis. European Journal of Political Economy, 23(2), 379–396.
Edeme, R.K., Nkalu, C.N. & Ifelunini, I. A. (2017). Distributional impact of public expenditure on human development in Nigeria. International Journal of Social Economics, 44(2), 1683–1693.
Edrees, A., Azali, M., Azman, H. & Nor, N. M. (2016). The impact of government spending, trade, foreign aid and foreign direct investment on poverty reduction in Africa. International Journal of Economics and Management Sciences, 5(1), 1–6.
Fan, S., Hazell, P., & Thorat, S. K. (2000). Impact of Public Expenditure on Poverty in Rural India. Economic and Political Weekly, 35(40), 3581–3588.
Fan, S. & Xiaobo, Z. (2008). Public expenditures, growth and poverty reduction in rural Uganda. African Development Review, 20(3), 466–496.
Fayissa, B. & Nsiah, C. (2013). The Impact of Governance on Economic Growth in Africa. The Journal of Developing Areas, 47(1), 91–108.
Galliano, D & Orozco, L. (2013). New Technologies and Firm Organization: The Case of Electronic Traceability Systems in French Agribusiness. Industry and Innovation: Taylor and Francis Online, 20(1), 22–47.
Gate, B. & Gate, M. (2018). The Stories Behind the Data 2017. GoalKeepers: Belinda and Gates Foundation.
Gupta, S., Davoodi, H. & Tiongson, E. (2000). Corruption and the Provision of Health Care and Education Services (116 No. 0). Washington, D.C.
Gyimah-Brempong, K. & de Gyimah-Brempong, S. M. (2006). Corruption, growth, and income distribution: Are there regional differences? Econ. Gov., 7(3), 245–269.
Gyimah-Brempong, K. (2002). Corruption, economic growth, and income inequality in Africa. Economics of Governance, 3(3), 183–209.
Habibullah, M.S., Badariah, H.D. & Hamid, H. B. (2016). Good governance and Crime rates in Malaysia. International Journal of Social Economics, 43(3), 308–320.
Hasty, J. (2005). The pleasures of corruption: Desire and discipline in Ghanaian political culture. Cult. Anthropol.., 20(2), 271–301.
Hidalgo-Hidalgo, M. & Iturbe-Ormaetxe, I. (2018). Long-run effects of public expenditure on poverty. Journal of Economic Inequality, 16(1), 1–22.
Ibrahim, A.A. & Cheri, L. (2013). Democracy, Political Instability and the African Crisis of Underdevelopment. Journal of Power Politics & Governance, 1(1), 59–67.
Im, K.S., Pesaran, M.H. & Shin, Y. C. (2003). Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics, 115, 53–74.
Kabuya, F. (2018). Fundamental Causes of Poverty in Sub-Saharan Africa. IOSR Journal Of Humanities And Social Science (IOSR-JHSS), 20(6), 2279–0837.
Kaufmann, D., Kraay, A. & Mastruzzi, M. (2008). Governance matters VII: Governance indicators for 1996-2007, World Bank Policy Research. Washington, DC.
Kaufmann, D., Kraay, A. & Zoido- Lobaton, P. (1999). Governance Matters. World Bank Policy Research (No. 2196). Washington DC.
Khan, M. H. (2007). Governance, Economic Growth and Development since the 1960s. In José Antonio Ocampo, K.S. Jomo and Rob Vos (eds). Growth Divergences: Explaining Differences in Economic Performance. Hyderabad, London and Penang: Orient Longman, Zed Books and Third World Network.
Levchenko, A. A. (2007). Institutional Quality and International Trade. The Review of Economic Studies, 74(3), 791–819.
Levin, A., Lin, C.F. & Chu, C. (2002). Unit Roots Tests in Panel Data: Asymptotic and Finite Sample Properties. Journal of Econometrics, 108, 1–24.
Liedong, T. A. (2017). Combating corruption in Africa through Institutional Entrepreneurship: Peering in from business-government relations. African Journal of Management-Taylor & Frances Online, 3(3–4), 310–327.
Madalla, G.S & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, (Special), 631–652.
Mallick, H. (2008). Government Spending, Trade Openness and Economic Growth in India: a Time Series Analysis (Trivendrum No. 403). Centre for Development Studies, India.
Marleny, A. (2019). Corruption, weak governance hinders Sub-Saharan Africa’s economic growth – IMF. Retrieved January 17, 2019, from http://www.engineeringnews.co.za/article/corruption-weak-governance-hinders-sub-saharan-africas-economic-growth-imf-2019-01-16/rep_id:4136
Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics, 110(3), 681–712.
Mauro, P. (2004). The persistence of corruption and slow economic growth. International Monetary Fund Staff Papers - JSTOR, 51(1), 1–18.
Mehmood, R. & Sara, S. (2010). The relationship between government expenditure and poverty: A cointegration analysis. Romanian Journal of Fiscal Policy (RJFP), 1(1), 29–37.
Mendy, A. (2016). Causes of poverty in Sub-Saharan Africa (SSA). Retrieved December 5, 2018, from http://thepoint.gm/africa/gambia/article/causes-of-poverty-in-sub-saharan-africa-ssa
Méon, P.G. & Sekkat, K. (2005). Does corruption grease or sand the wheels of growth? Public Choice, 122(1–2), 69–97.
Olarewaju, F. O. (2016). Government Spending, Corruption and Output Growth in Nigeria. European Scientific Journal, 12(16), 291–312.
Omoteso, K. & Mobolaji, H. . (2014). Corruption, governance and economic growth in Sub-Saharan Africa: a need for the prioritisation of reform policies. Social Responsibility Journal, 10(2), 316–330.
Osei‐Tutu, E., Badu, E. & Owusu‐Manu, D. (2010). Exploring corruption practices in public procurement of infrastructural projects in Ghana. International Journal of Managing Projects in Business, 3(2), 236–256.
Ovat, O.O. & Bassey, E. E. (2014). Corruption, Governance and Public Spending in Nigeria : Implications for Economic Growth. British Journal of Economics, Management & Trade, 4(11), 1679–1699.
Oxfam, I. (2017). Nigeria: Extreme inequality and Poverty.
Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, (special), 653–670.
Pedroni, P. (2000). Fully Modified OLS for Heterogeneous Cointegrated Panels. Advance Econometrics, (15), 93–130.
Ravallion, M. (1994). Fundamentals of Pure and Applied Economics: Poverty comparisons. (A. B. Atkinson, Ed.). Switzerland: Harwood Academic Publishers.
Sasmal, R. & Sasmal, J. (2016). Public expenditure, economic growth and poverty alleviation. International Journal of Social Economics, 43(6), 604–618.
Schaffner, J. (2014). Development Economics: Theory, Empirical Research, and Policy Analysis. United States of America: John Wiley & Sons Ltd.
Sen, A. K. (1999). Development as freedom. New York: Alfred A. Knopf.
Sequeira, S. (2012). Advances in measuring corruption in the field. Research in Experimental Economics (Vol. 15). Emerald Group Publishing Ltd.
Shleifer, A. & Vishny, R. W. (1993). Corruption. Quarterly Journal of Economics, 108(3), 599–617.
Smith, D. J. (2007). A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria (First). Princeton, New Jersey, UK: Prince University Press.
Sulemana, I. & Kpienbaareh, D. (2018). An empirical examination of the relationship between income inequality and corruption in Africa. Economic Analysis and Policy, 60, 27–42.
Tanzi, V. (1998). Corruption Around the World: Causes, Consequences, Scope and Cures. Washington, D.C.
Timofeyev, Y. (2011). How corruption affects social expenditures: evidence from Russia. Global Journal of Business Research, 5, 39–51.
Transparency International. (2017). Corruption Perception Index.
Transparency International. (2018). Corruption Perception Index.
Treisman, D. (2000). The causes of corruption: a cross-national study. Journal of Public Economics (Vol. 76).
UIS. (2018). One in Five Children, Adolescents, and Youth is Out of School. Unesco Institute for Statistics, Fact Sheet(48), 13.
UNAIDs. (2018). Global information and education on HIV and AIDS:2017 global HIV statistics. Retrieved December 10, 2018, from https://www.avert.org/global-hiv-and-aids-statistics
UNDP. (2018). Human Development Indices and Indicators 2018 Statistical Update. Washington DC.
UNESCO. (2006). Definition of basic concepts and terminologies in governance and public administration. Washington DC.
UNICEF. (2018). Under-five mortality: Monitoring the situation of children and women. New York.
Wei, S. (2001). Corruption in Economic Transition and Development: “Grease or Sand.” In the Spring Seminar. Geneva.
WHO. (2018). Maternal mortality: Where do maternal deaths occur? New York.
Wilhelm, V. & Fiestas, I. (2005). Exploring the Link Between Public Spending and Poverty Reduction Lessons from the 90s. Washington, DC: World Bank Institute.
World Bank. (1994). Governance: The World Bank’s Experience. Washington, D.C.
World Bank. (2017). World Development Indicators: Poverty headcount ratio at $1.90 a day (2011 PPP) (% of the population).
World Bank. (2018a). Poverty: Overview. Retrieved December 12, 2018, from https://www.worldbank.org/en/topic/poverty/overview
World Bank. (2018b). The Worldwide Governance indicators project; political stability and absence of violence/terrorism.
World Bank. (2018c). World Development Indicators. Washington D.C.
DOI: http://dx.doi.org/10.17977/um002v13i12021p016
Refbacks
- There are currently no refbacks.
ISSN (Print) 2086-1575 ISSN (Online) 2502-7115
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.