Institutional Quality and Structural Transformation in Sub-Saharan Africa

The objective of this work is to assess the effect of institutional quality on structural transformation in Sub-Saharan Africa. Specifically, it is to assess the effect of indicators of institutional quality on the industrialization of sub-Saharan African countries on the one hand, and on the diversification of their exports on the other hand. To do this, we first estimated a dynamic panel model by the method of generalized moments in system, to evaluate the effect of the quality of institutions on industrialization; and secondly, we estimated a simple panel by the method of double least squares to analyze the effect of the quality of institutions on export diversification. The data used come from the World Bank (World Development Indicators), UNCTAD (UNCTADSTAT), and the African Development Bank (AIDI) databases. These data cover a sample of 46 countries over the period 2002-2018. Our results show that, in general, the quality of institutions improves structural transformation.