Does the quality of institutions enhance savings? The case of Sub-Saharan Africa

Title: Does the quality of institutions enhance savings? The case of Sub-Saharan Africa
Creator: Boateng, Elliot; Agbola, Frank W.; Mahmood, Amir
Relation: Applied Economics Vol. 51, Issue 58, p. 6235-6263
Publisher: Routledge
Resource Type: journal article
Date: 2019
Description: Over the last three decades, there has been increasing disparity in savings across regions and income groupings globally. In this paper, we investigate whether the quality of institutions explains the saving disparities in Sub-Saharan Africa (SSA). Utilizing comprehensive panel data and spanning the period 1980–2015, we estimate a savings model using the two-step instrumental variable generalized method of moment (2SIV-GMM) estimator. Our results show that the impact of institutions on savings behaviour differs across regions and income groupings, and in SSA, in aggregate. We find that the level and growth of per capita income and terms of trade enhance savings whereas government consumption expenditure, financial sector development and the elderly dependency rate are savings impeding. The findings are robust to alternative model specification and highlight the importance of institutions in influencing savings behaviour in SSA.
Subject: savings; institutions; governanace; 2SIV-GMM; Sub-Saharan Africa; SDG 8; Sustainable Development Goals
Identifier: http://hdl.handle.net/1959.13/1445054
Identifier: uon:42481
Identifier: ISSN:0003-6846
Language: eng
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