ANALYZING THE NEXUS BETWEEN INSTITUTIONAL QUALITY AND EXTERNAL DEBT IN WEST AFRICA
Aduma Oko Aduma, Mutairu Shaka Eromise and Stephen Sofah
Volume 8 Issue 1
Abstract
This study examines the impact of institutions on external debt in ECOWAS countries for a period of 10 years (2008- 2018) covering 16 West African countries. The study adopts the System Generalized Method of Moments as a technique of data analysis. The study measured institutions by six proxies namely; Government effectiveness, Rule of Law, Control of corruption, Political stability, Regulatory quality and Voice and accountability. The results revealed that rule of law and regulatory quality have no significant positive influence in the management of external debts in the ECOWAS sub region, while political stability and government effectiveness has significant positive impact on external debts; control of corruption has negative impact on external debt. To improve the performance of external debts in ECOWAS sub-region, while voice and accountability have a significant negative impact on external debts management in the period under review. The paper recommends better government control of corruption, reduction in administrative bottlenecks and multiplicity of government agencies which have led to unnecessary delays in implementation of government policies. Equally, the respect for the rule of law should be supreme. This implies that the constitution among various countries remain absolute and the rule of law is respected and observed Keywords: Institutional Quality, External Debts, ECOWAS, System GMM.
Download Paper