Institutional Quality, Infrastructure, and Economic Growth in Africa

Abstract We use a panel data set of 46 African countries over the 2003–15 period to study the role of institutional quality in infrastructure-led growth. Based on the causal analysis, we show large positive effects of growth for countries with strong institutional quality in comparison to their counterparts with weak institutional quality. This result is not sensitive to the choice of a particular measure of infrastructure or institutional quality. Our results suggest the presence of nonlinearities when estimating infrastructure-led growth and emphasize the importance of complementarities influencing such an estimation.