DOES INSTITUTIONAL QUALITY AFFECTS HUMAN DEVELOPMENT IN SUB-SAHARA AFRICAN COUNTRIES?

Abstract

Despite the abundant research on institutional quality and development, little has been done to examine the impact of institutional quality on human development especially in Sub Sahara African Countries (SSA).The problem facing SSA can be ascertained in the area of weak institutions which metamorphose to poor level of human development, in terms of poor standard of living, low level of educational attainment and low level of life expectancy which sum up to high level of poverty in the region.The objective of this study was to evaluate the relationship between institutional quality and human development in SSA countries from 2005 to 2013. The research used secondary data sourced from World Bank governance indicators, Transparency International and Heritage Foundation. The method of analysis employed was panel data using the panel corrected standard error (PCSE) and generalized method of moments (GMM).The analysis produced diverse results. The findings are compatible with theory. Both the panel data analysis and the generalized method of moments of institutional quality and human development model indicated that most of the countries investigated exhibits mixed performance in terms of the institutional quality such as rule of law, corruption, bureaucratic quality and property rights. The study recommends policies to reduce corruption in all levels of economic activities. In addition, rule of law need to be strengthened and the educational sector should be fine-toned to train manpower in all aspect of human in the region.