Development Economics

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DETERMINANTS OF PRIVATE INVESTMENT IN SUB-SAHARAN AFRICA: THE ROLE OF INSTITUTIONS
(University Of Bostwana, 2020-09-04) MAHLOANE, TSEPO BENJAMIN
This study pursued an investigation of the relationship between the quality of institutions and private investment in Sub-Saharan Africa (SSA). The literature on determinants of economic growth establishes the importance of investment in the growth of an economy. SSA countries have been experiencing deficiency in private investment growth for several decades with consequences on the growth of these countries. This study contributes to the debate on policies to promote private investment in the region. The study focused on the influence of administrative quality, public accountability and political stability. Dynamic panel econometric methods were applied to data from 25 SSA countries for the period 1990-2016. The empirical results of the Arellano-Bond first step generalized methods of moments support the notion that improvement in public accountability and political stable environment is likely to improve private investment in SSA. One way that this study can be extended is to investigate causality between institutional quality and private investment. This could potentially provide more insight on the interaction between the two.