Institutions and Economic Performance in Sub-Saharan Africa: A Dynamic Panel Data Analysis

There is growing emphasis on the role of institutions and governance on explaining Africa’s economic growth. However, it is not clear which of the institutions matter most. Therefore ,the objective of this paper is to answer two separate questions: (i) Do institutions rea lly matter in Sub-Saharan Africa?, (ii) If institutions matter, which of them matters most? Arellano and Bond first difference and Blundell-Bond System Generalize d Method of Moment (GMM) estimators were used to estimate the specified models. Our results show that, institutions really matter for Sub-Saharan Africa’s economic performance, among which regulatory quality appeared to be the most important. Thus the economic performance of the region could be enhanced by improving regulatory quality.