Corruption, institutions and capital flight: evidence from Sub-Saharan Africa

2018 ◽  
Vol 45 (1) ◽  
pp. 59-76 ◽  
Author(s):  
Eric Osei-Assibey ◽  
Kingsley Osei Domfeh ◽  
Michael Danquah
Keyword(s):  
Portfolio Choice ◽  
Rule Of Law ◽  
Good Governance ◽  
Sub Saharan Africa ◽  
Capital Flight ◽  
Positive Sign ◽  
Institutional Variables ◽  
Content Type ◽  
Sub Saharan ◽  
The Relationship

Purpose The purpose of this paper is to investigate the effect of corruption and institutional governance indicators on capital flight in Sub-Saharan Africa. Design/methodology/approach Using a Portfolio Choice Framework, the study employs two different estimation techniques as Generalized Method of Moment and Fixed Effect Regression on panel data sets of 32 countries in Sub-Saharan Africa over the period 2000-2012. Findings The variable of interest, corruption, retains its expected positive sign and statistically significant across all the estimations. The relationship remains very strong even when other equally important institutional variables such as regime durability, rule of law and independence of the executive are taken into account. This suggests that a higher perception of corruption among public authorities as in bribery, kickbacks in public procurement, embezzlement of public funds, among others facilitates an increase in capital outflow from SSA. The findings further indicate that regime durability and rule of law are important institutional variables that also significantly influence capital flights in SSA. Practical implications The findings imply that institutional reforms should be encouraged if SSA is to win the war against corruption and by extension against capital flight. There should be a creation of democratic environment and good governance practices that foster stronger governance institutions, decline in corruption and better domestic investment climate to help reverse the high spate of capital flight in the region. Originality/value The main value of this paper is using the portfolio choice framework to analyze the relationship between capital flight and corruption in the Sub-Saharan African context.

Banking technology and cashless economy in selected Sub-Saharan African countries: does education matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ese Urhie ◽  
Ogechi Chiagozie Amonu ◽  
Chiderah Mbah ◽  
Olabanji Olukayode Ewetan ◽  
Oluwatoyin Augustina Matthew ◽  
...  
Keyword(s):  
Panel Study ◽  
Positive Sign ◽  
African Countries ◽  
Content Type ◽  
Bank Branches ◽  
Mobile Cellular ◽  
Sub Saharan ◽  
The Relationship ◽  
Ssa Countries ◽  
Practical Implications

Purpose This study aims to analyze the effect of banking technology [automated teller machine (ATM) and mobile cellular devices (MOBs)] and other traditional factors on the level of currency in circulation for a sample of 21 selected sub-Saharan African (SSA) countries. It also assessed the mitigating effect of education on the relationship between banking technology and the cashless economy. Design/methodology/approach The study used a panel data approach to design a cashless economy model with banking technology – ATM and MOBs – as well as their interaction with education as regressors. Findings This study finds that MOB is significant for promoting a cashless economy, whereas ATM is insignificant in sample SSA countries. The level of education and the number of bank branches were also found to be significant in promoting a cashless economy. The interaction between education and ATM was insignificant but negatively signed, whereas that between education and MOB was significant but had a positive sign. Research limitations/implications Non-availability of data restricted this work to a panel study of selected SSA countries. Subsequent studies should consider single-country case studies. Practical implications Findings from the study imply that for banking technology to drive a cashless economy effectively, education has to be improved. Originality/value The ratio of cash in circulation to total money supply was used as a measure of the cashless economy. The study also evaluated the moderating effect of education on banking technology.

Reducing corruption and bribery in Africa as a target of the sustainable development goals: applying indicators for assessing performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kempe Ronald Hope, Sr.
Keyword(s):  
Sustainable Development ◽  
Sustainable Development Goals ◽  
Good Governance ◽  
Sub Saharan Africa ◽  
Ethical Behaviour ◽  
Content Type ◽  
The Sustainable Development ◽  
Development Goals ◽  
Sub Saharan ◽  
Illegal Activities

Purpose The purpose of this paper is to assess African performance for substantially reducing all forms of corruption and bribery on the continent by 2030, through the indicators for achieving Target 16.5 of the sustainable development goals (SDGs). Design/methodology/approach Drawing on the available and accessible relevant data from credible sources, this work quantifies, outlines and analyses the relationship between corruption/bribery and sustainable development as it applies primarily to sub-Saharan Africa; assesses the trends in the region through the official indicators for achieving Target 16.5 of the SDGs; and recommends other indicators for assessing ethical behaviour in African political, administrative and business leadership and institutions for achieving sustainable development and improved ethical performance towards significant reductions in all manifestations of bribery and corruption on the continent by 2030. Findings Corruption and bribery are found to affect all SDG-related sectors, undermining development outcomes and severely compromising efforts to achieve the SDGs in Africa. Consequently, prioritising corruption reduction including from money laundering, bribery and other illegal activities is a necessary requirement for achieving sustainable development, good governance, building effective and inclusive institutions as required by SDG 16, and funding the achievement of the SDGs. Originality/value The main value of the paper is the insights it provides through the very comprehensive compilation of statistical information that quantifies, and with analysis, the corruption/bribery avenues and the resultant deleterious effects on sustainable development in Africa.

“Does the poor matter” in pro-poor driven sub-Saharan African cities? towards progressive and inclusive pro-poor tourism

2019 ◽  
Vol 5 (3) ◽  
pp. 392-411 ◽  
Author(s):  
Regis Musavengane ◽  
Pius Siakwah ◽  
Llewellyn Leonard
Keyword(s):  
Sustainable Development ◽  
Good Governance ◽  
Urban Tourism ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
African Cities ◽  
The Poor ◽  
Sub Saharan ◽  
The Impact

Purpose The purpose of this paper is to question the extent to which Sub-Saharan African cities are progressing towards promoting pro-poor economies through pro-poor tourism (PPT). It specifically examines how African cities are resilient towards attaining sustainable urban tourism destinations in light of high urbanization. Design/methodology/approach The methodological framework is interpretive in nature and qualitative in an operational form. It uses meta-synthesis to evaluate the causal relationships observed within Sub-Saharan African pro-poor economies to enhance PPT approaches, using Accra, Ghana, Johannesburg, South Africa, and Harare, Zimbabwe, as case studies. Findings Tourism development in Sub-Saharan Africa has been dominantly underpinned by neoliberal development strategies which threaten the sustainability of tourism in African cities. Research limitations/implications The study is limited to three Sub-Saharan African countries. Further studies may need to be done in other developing countries. Practical implications It argues for good governance through sustainability institutionalization which strengthens the regulative mechanisms, processes and organizational culture. Inclusive tourism approaches that are resilient-centered have the potential to promote urban tourism in Sub-Saharan African cities. These findings contribute to the building of strong and inclusive Institutions for Sustainable Development in the Sub-Saharan African cities to alleviate poverty. Social implications These findings contribute to the building of strong and inclusive institutions for sustainable development in the Sub-Saharan African cities to alleviate poverty. Originality/value The “poor” are always within the communities, and it takes a community to minimise the impact of poverty among the populace. The study is conducted at a pertinent time when most African government’s development policies are pro-poor driven. Though African cities provide opportunities of growth, they are regarded as centres of high inequality.

Innovation, institutions and economic growth in sub-Saharan Africa – an IV estimation of a panel threshold model

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joseph Ato Forson ◽  
Rosemary Afrakomah Opoku ◽  
Michael Owusu Appiah ◽  
Evans Kyeremeh ◽  
Ibrahim Anyass Ahmed ◽  
...  
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Innovation Policy ◽  
Threshold Model ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Panel Regressions ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship

PurposeThe significant impact of innovation in stimulating economic growth cannot be overemphasized, more importantly from policy perspective. For this reason, the relationship between innovation and economic growth in developing economies such as the ones in Africa has remained topical. Yet, innovation as a concept is multi-dimensional and cannot be measured by just one single variable. With hindsight of the traditional measures of innovation in literature, we augment it with the number of scientific journals published in the region to enrich this discourse.Design/methodology/approachWe focus on an approach that explores innovation policy qualitatively from various policy documents of selected countries in the region from three policy perspectives (i.e. institutional framework, financing and diffusion and interaction). We further investigate whether innovation as perceived differently is important for economic growth in 25 economies in sub-Saharan Africa over the period 1990–2016. Instrumental variable estimation of a threshold regression is used to capture the contributions of innovation as a multi-dimensional concept on economic growth, while dealing with endogeneity between the regressors and error term.FindingsThe results from both traditional panel regressions and IV panel threshold regressions show a positive relationship between innovation and economic growth, although the impact seems negligible. Institutional quality dampens innovation among low-regime economies, and the relation is persistent regardless of when the focus is on aggregate or decomposed institutional factors. The impact of innovation on economic growth in most regressions is robust to different dimensions of innovation. Yet, the coefficients of the innovation variables in the two regimes are quite dissimilar. While most countries in the region have offered financial support in the form of budgetary allocations to strengthen institutions, barriers to the design and implementation of innovation policies may be responsible for the sluggish contribution of innovation to the growth pattern of the region.Originality/valueSegregating economies of Africa into two distinct regimes based on a threshold of investment in education as a share of GDP in order to understand the relationship between innovation and economic growth is quite novel. This lends credence to the fact that innovation as a multifaceted concept does not take place by chance – it is carefully planned. We have enriched the discourse of innovation and thus helped in deepening understanding on this contentious subject.

scholarly journals Finance, governance and inclusive education in Sub-Saharan Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Simplice A. Asongu ◽  
Nicholas M. Odhiambo
Keyword(s):  
Secondary Education ◽  
Inclusive Education ◽  
Rule Of Law ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Credit Access ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Sub Saharan

Purpose The purpose of this paper is to assess the importance of credit access in modulating governance for gender-inclusive education in 42 countries in Sub-Saharan Africa with data spanning the period 2004–2014. Design/methodology/approach The generalized method of moments is used as empirical strategy. Findings The following findings are established: First, credit access modulates government effectiveness and the rule of law to induce positive net effects on inclusive “primary and secondary education.” Second, credit access also moderates political stability and the rule of law for overall net positive effects on inclusive secondary education. Third, credit access complements government effectiveness to engender an overall positive impact on inclusive tertiary education. Originality/value Policy implications are discussed with emphasis on sustainable development goals.

scholarly journals Corruption and the Rule of Law in Sub-Saharan Africa

2011 ◽  
Vol 4 (2) ◽  
pp. 187-208 ◽  
Author(s):  
Stuart S. Yeh
Keyword(s):  
Sierra Leone ◽  
Rule Of Law ◽  
Good Governance ◽  
Sub Saharan Africa ◽  
International Agency ◽  
The Rule Of Law ◽  
The World Bank ◽  
Centralized Planning ◽  
Sub Saharan

AbstractThe World Bank and IMF attribute underdevelopment in sub-Saharan Africa to the practice of directing economic activity through centralized planning. They prescribe privatization and economic liberalization to restructure African economies, promote competition, reduce the scope for corruption, and promote good governance. However, inadequate checks on political power permit African elites to subvert these reforms. This article reviews the political economy of sub-Saharan countries as well as a case study of Sierra Leone to illustrate the problem. The analysis suggests the need for an international agency such as the UN to provide the capacity to investigate, expose and check corruption by employing UN inspectors who are immune to pressure from powerful African elites. This type of check on corruption is necessary to promote the rule of law in sub-Saharan Africa.

Trade liberalization and technology absorption in a less developing country context

2015 ◽  
Vol 14 (2) ◽  
pp. 149-170
Author(s):  
Alamedin Bannaga
Keyword(s):  
Trade Liberalization ◽  
Developing Country ◽  
Design Methodology ◽  
Sub Saharan Africa ◽  
Panel Regression ◽  
Content Type ◽  
Factors Affecting ◽  
Technology Absorption ◽  
Sub Saharan ◽  
The Relationship

Purpose – The paper aims to investigate the relationship between trade liberalization and technology absorption in a less developing country context. The objective is to empirically test the relationship between these two variables. This analysis was conducted in Sub-Saharan African economies. Design/methodology/approach – A panel regression of 20 countries in Sub-Saharan Africa was estimated based on a model that takes into account both trade policy and non-policy factors affecting technology absorption. Findings – A positive and significant relationship was found between trade liberalization and technology absorption. This relationship is valid across a variety of model specifications, technology absorption proxies and estimation techniques. Moreover, non-policy factors such as geographical spillover play significant role in technology absorption. Originality/value – The paper examines the link between the trade liberalization and the technology absorption in Sub-Saharan Africa. The analysis is empirical in nature and builds on panel estimations. The novelty of the paper comes from the topic investigated and the focus on a region which has not attracted much attention in the literature.

scholarly journals The mobile phone as an argument for good governance in sub-Saharan Africa

2019 ◽  
Vol 32 (4) ◽  
pp. 897-920 ◽  
Author(s):  
Simplice Asongu ◽  
Sara le Roux ◽  
Jacinta C. Nwachukwu ◽  
Chris Pyke
Keyword(s):  
Mobile Phone ◽  
Mobile Phones ◽  
Good Governance ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Empirical Inquiry ◽  
Governance Indicators ◽  
Sub Saharan ◽  
Mobile Phone Usage

Purpose The purpose of this paper is to present theoretical and empirical arguments for the role of mobile telephony in promoting good governance in 47 sub-Saharan African countries for the period 2000–2012. Design/methodology/approach The empirical inquiry uses an endogeneity-robust GMM approach with forward orthogonal deviations to analyze the linkage between mobile phone usage and the variation in three broad governance categories – political, economic and institutional. Findings Three key findings are established: first, in terms of individual governance indicators, mobile phones consistently stimulated good governance by the same magnitude, with the exception of the effect on the regulation component of economic governance. Second, when indicators are combined, the effect of mobile phones on general governance is three times higher than that on the institutional governance category. Third, countries with lower levels of governance indicators are catching-up with their counterparts with more advanced dynamics. Originality/value The study makes both theoretical and empirical contributions by highlighting the importance of various combinations of governance indicators and their responsiveness to mobile phone usage.

scholarly journals Information technology, governance and insurance in Sub-Saharan Africa

2019 ◽  
Vol 16 (8) ◽  
pp. 1253-1273 ◽  
Author(s):  
Simplice Asongu ◽  
Joseph Nnanna ◽  
Paul Acha-Anyi
Keyword(s):  
Rule Of Law ◽  
Life Insurance ◽  
Political Stability ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Internet Penetration ◽  
Insurance Penetration ◽  
Sub Saharan

Purpose This study aims to investigate the role of information and communication technology (ICT) in modulating the effect of governance on insurance penetration in 42 Sub-Saharan African countries using data for the period 2004-2014. Design/methodology/approach Two insurance indicators are used in the analysis, namely, life insurance and non-life insurance. The three ICT modulating dynamics used include mobile phone penetration, internet penetration and fixed broadband subscriptions. Six governance channels are also considered, namely, political stability, “voice & accountability”, regulation quality, government effectiveness, the rule of law and corruption-control. The empirical evidence is based on generalized method of moments. Findings The following main findings are established. First, mobile phone penetration does not significantly modulate governance channels to positively affect life insurance while it effectively complements “voice & accountability” to induce a positive net effect on non-life insurance. Second, internet penetration complements governance dynamics of political stability, government effectiveness and rule of law to induce positive net effects on life insurance and corruption-control for an overall positive effect on non-life insurance. Third, the relevance of fixed broadband subscriptions in promoting life insurance is apparent via governance channels of regulation quality, government effectiveness and the rule of law while fixed broadband subscriptions do not induce significant overall net effects on non-life insurance though the conditional effects are overwhelmingly significant. Originality/value To the best of the authors’ knowledge, studies on the relevance of ICT in promoting insurance consumption through governance channels are sparse, especially for a region such as Sub-Saharan Africa where insurance penetration is low compared to other regions of the world.

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