The Quality of Institutions -The Contribution to Poverty Reduction in Sub-Saharan Africa-

Abstract

The purpose of this work is to study theoretically and empirically role of economic growth to reduce poverty in Africa, while taking into account the institutional quality in this relationship. In other words, one wonders whether the quality of institutions hinders the effect of growth on poverty reduction or accelerates it? Is there a threshold level for the institutional quality for the effect of growth on poverty reduction to be more effective? The approach used to discuss this problem is to use the most recent econometric methods (Autoregressive Distributed Lag (ARDL)) to verify empirically these relationships for a sample of 18 countries in sub-Saharan Africa. The main results obtained are three in number: i) Economic growth reduce poverty, (ii) This effect dependent of the institutions quality, iii) There is a threshold level for the institutions quality which growth reduces poverty. In reality, the interest of this question is twofold: i) The closure of the Millennium Development Program (MDG) without a significant reduction in poverty in the African continent. This failure gave birth to a new Sustainable Development Program (PDD) by 2030. (ii) Sub-Saharan Africa has become a new pole of economic growth and therefore cooperation South- South has become a priority.