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Credible commitment and economic growth in Africa


Seifu, Michael;

Institution: Dublin City University. School of Law and Government
Subject Keywords: International relations; Political science; economic growth; Africa;

Many, in academic and policy circles, rightly consider economic growth to be the desideratum to positively change the plight of a large proportion of the world population. Its resonance is all the more significant for Africa, not only because the region’s economic performance has been lacklustre, but also because of its implications for the very survival of states in the region. While the voluminous research on the subject of economic growth is testimony to the validity of this line of research, definitive answers to the fundamental factors that shape the economic growth trajectories of countries have not been forthcoming. Recent research, however, provides strong, theoretical and empirical evidence highlighting the primacy of institutions in explaining observed differences in levels of income among countries. More specifically, the degree to which a country’s political institutions provide for a credible regime of property rights at low transaction costs ultimately defines its success on the economic sphere.

On balance, scholars have shied away from applying this, otherwise useful paradigm, to an African dataset. Research on African political economy, which predominantly focussed on political instability, had little scope to utilise positive political theories. By providing empirical evidence, whereby a all-Africa data obeys conventional economic theories, I show that I have legitimate grounds to adopt a positive political economy approach on Africa. Of the rich array of political institutions, the effects of which reverberate on the economic landscape, I select those institutions that credibly tie the hands of government from adopting opportunistic behaviour. Accordingly, institutions of credible commitment are the explanatory variables for the research. Still, further fine-tuning is unavoidable, given the fact that the vector of credible commitment institutions comprises several elements.

I decompose the credible commitment variable into three major categories; namely institutions of delegation, rule of law, and veto players. The study reports a number of findings, which back-up our hypothesis that observed differentials in economic growth among African countries reflect corresponding differences in qualities of political institutions. For instance, there exist statistically meaningful links between Central Bank independence variables and economic growth of countries. A similar conclusion is drawn with regard to judicial independence. Additionally, using a string of proxies for the rule of law variable, I find that this dimension of credible commitment maps positively onto economic growth. As for the veto players’ paradigm, it is shown that, while size and diversity in preferences of actors influence economic growth, its effects are conditional on the quality of status quo policies.



Suggested citation:

Seifu, Michael; . () Credible commitment and economic growth in Africa [Online]. Available from: [Accessed: 25th April 2018].


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