Education and economic growth in Sub-Saharan African Countries: Does governance quality Matter?

Abstract

This paper examines the dynamic relationship between education, governance and economic growth in 28 sub-Saharan African (SSA) countries from 2002 to 2018 using the generalized method of moments (GMM) approach. The study first examines the effect of education on economic growth and, thereafter, examines the modulating effect of governance quality on the nexus between education and economic growth. Two proxies of education, namely primary and secondary education, and five proxies of governance quality, namely a) corruption control, b) government effectiveness, c) regulations, d) rule of law, and e) voice and accountability, have been used to examine this linkage. Overall, the study found that the impact of education on economic growth is largely insignificant in all the specifications, with the exception of secondary education, which has an unconditional positive effect on economic growth in one of the five specifications of governance quality (i.e., regulatory quality). The study also found that, although governance quality spurs economic growth in seven of the ten specifications, it interacts with education to foster growth in only one specification (i.e., regulatory quality in the case of secondary education). When primary education specifications are considered, governance does not interact with education to spur economic growth in any of the specifications. These findings, though contrary to some of the previous studies, are not surprising given the primary and secondary education landscape in some SSA countries. According to UNESCO, SSA has the highest rates of education exclusion in the world.