Structural and Institutional Determinants of Poverty in Sub-Saharan African Countries

The conventional policy models designed to tackle poverty have not been able to address the peculiar socio-economic and institutional conditions of the country or region in perspective. Much of the literature focuses on the macroeconomic determinants of poverty, leaving out non-economic factors that could be more important. In this milieu, this study empirically examines the relationship between governance, physical infrastructure, and the level of poverty in sub-Saharan Africa. The estimations are based on a panel of 19 selected sub-Saharan African countries over the period 1990–2010 using the two-stage least-squares estimation techniques. The results from the estimations portray robust parameter estimates and suggest that governance and infrastructure are significant determinants of poverty in the region. Furthermore, the study tends to detect that a sustainable level of poverty could be attained at particular governance and infrastructure rating after controlling for the level of gross domestic product and other factors across the region. Therefore, countries with better governance and infrastructure ratings will achieve lower poverty levels, and poverty tends to converge as physical infrastructure improvement and better governance are pursued.