Chapters authored
Political and Institutional Determinants of Industrialization in Africa
The aim of this chapter is to assess the contribution of political-institutional factors to industrialization in Africa over the period 1996–2022. To this end, we adopt a model of industrialization that takes into account the specificities of African economies. Because of the potential endogeneity bias between industrialization and its main determinants, we apply the Instrumental Variable Two-Stage Least Squares estimator to a panel of 52 African countries. After estimation, we arrive at three main results: (i) weak democratization of political regimes is an obstacle to industrialization in Africa. In other words, the predominance of autocratic political regimes in Africa is a major factor in deindustrialization; (ii) in the absence of good governance, political fragility is a brake on industrialization in Africa; and (iii) good institutional quality stimulates industrialization in Africa. All things being equal, countries that improve their institutional framework benefit from an industrial dividend. This includes low levels of corruption, effective government, a stable political environment, inclusive laws and good-quality regulation, as well as increased political accountability. However, several future avenues would be important to further bridge the gap in the intrinsic analysis of industrialization in Africa. These could include the role of transmission channels, the mobilization of historical factors and legal origins.
Part of the book: Innovative Industrial Design