‘‘Institutional Quality and Economic Growth in Selected Countries of East Africa’’

Abstract

Currently the role of institutional quality in economic growth is the major discussion point in the international development arena and literature. The study aimed to investigate the role of institutional quality on long run economic growth in fourteen selected East African countries for the period 2013-2023; the study emphasizes investigating the institutional quality role within certain time periods. The study estimated the dynamic panel data model by one-step difference GMM using the data from the World Bank's World Development Indicator and World Governance Indicator. The paper has found positive significant impacts of institutional quality on long-run per capita growth in selected countries. The six components of the institutional quality measure of the World Governance indicator also have a positive significant effect on influencing long-run growth. In addition, the study found that the working-age population significantly influences long-run growth. Thus, improving institutional quality can be the better comparative advantage for the least developed countries selected in this study. Institutional quality Per capita income growth GMM. These findings suggest that policymakers should prioritize enhancing governance and institutional frameworks to foster sustainable economic growth. By doing so, least developed countries can create a more favourable environment for investment and development, ultimately leading to improved living standards and economic resilience. Additionally, strengthening these institutions can help attract foreign direct investment, which is crucial for technology transfer and skill development. As a result, a more robust institutional framework not only supports immediate economic gains but also lays the groundwork for long-term stability and prosperity