Interconnections between governance and socioeconomic conditions: Understanding the challenges in sub-Saharan Africa

Abstract

Given that challenges on the issue of socioeconomic development faced by countries in sub-Saharan Africa (SSA) have been identified as critical to strengthening the inherent link between governance and socioeconomic conditions, this study examines the interconnections between governance and socioeconomic conditions in SSA. With a focus on 25 countries in SSA between 2005 and 2019, we conduct the analysis based on the Panel-Corrected Standard Error and System Generalized Method of Moments estimations and panel causality tests. The results show that SSA does not seem to have the means of effective governance to spur improved socioeconomic conditions. Moreover, the pervasiveness of institutional problems in many countries of SSA has been responsible for the poor socioeconomic conditions in the region. Likewise, governance quality and socioeconomic conditions are found to influence each other. An improvement in socioeconomic conditions could result in better governance quality. On the other hand, governance quality is viewed as a vital ingredient in achieving needed socioeconomic development outcomes. Thus, it is suggested that there is a need for countries in SSA to streamline governing systems toward engendering improved well-being. The introduction and implementation of transformative policies through effective governance are also necessary for ensuring critical structural changes and increasing social service provision. Overall, there should be a proactive identification of ineffective policies and procedures by policymakers to enhance meaningful impacts in the region.

Keywords

• Governance quality
• Socioeconomic conditions
• Economic development
• System Generalized Method of Moments
• Sub-Saharan Africa