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The study aims to examine how the quality of institutions moderates the relationship between the informal economy and poverty in sub-Saharan Africa.

The Impact of Informal Economy on Poverty in Sub‐Saharan Africa. Does Institutional Quality Matter?

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The study aims to examine how the quality of institutions moderates the relationship between the informal economy and poverty in sub-Saharan Africa.
Used cross-country panel data from 41 sub-Saharan African countries from 2005 to 2019.
Employed two-step system generalized method of moments estimation technique.
Improvement in the quality of institutions is crucial for poverty reduction.
In both short and long run, better institutional quality complements informality in reducing poverty.

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Randomized trial shows improvement in institutional quality enhances poverty reduction in sub-Saharan Africa, indicating its importance.

Adusei et al. (2026) studied this question.

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