How does Democracy affect Poverty Alleviation? Empirical Evidence from Africa

Author(s)

Prince Asare Vitenu-Sackey , Naeem Alhassan ,

Download Full PDF Pages: 21-31 | Views: 959 | Downloads: 262 | DOI: 10.5281/zenodo.3613270

Volume 8 - December 2019 (12)

Abstract

The study investigated the impact of democracy on poverty alleviation in Africa by employing panel data of 50 African countries for the period of 1996 to 2017. The study used panel data methodologies such as unit root test, correlation matrix, multivariate regression, generalized linear model, dynamic panel data estimation and granger causality test. The study found that democracy has two dimensional relationship with or impact on poverty alleviation. As the study used two proxy measures of democracy thus the rule of law and voice and accountability, the rule of law showed a positive and statistically significant impact on poverty alleviation but voice and accountability showed a negative and statistically significant impact on poverty alleviation. Corruption control has been a major headache in Africa which has been affecting the development of the continent. Perhaps, corruption has a negative and statistically significant impact on poverty alleviation. Moreover, economic growth has the prospect of reducing poverty when all the sectors of the economy are economically viable to produce goods and services to meet the demands of the economic actors. In this regard, governments’ effectiveness as in the quality of policy formulation and its implementation which will gain trust and credibility from all stakeholders by ensuring quality public services and quality civil services devoid of governments or political interference to enjoy independence will positively and significant increase poverty alleviation thereby reducing poverty. The study found a bidirectional causal relationship between poverty alleviation and the following variables; economic growth, corruption control, the rule of law and government effectiveness. Also, there is an evidence of unidirectional causal relationship from poverty alleviation to voice and accountability and political stability to poverty alleviation.

Keywords

Democracy; Poverty alleviation; Africa; Rule of law; Voice and accountability

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