Why democracy is not improving institutional quality in Africa

Ibrahim Onour (Professor)
School of Management Studies
University of Khartoum

Literature on this area indicate evidence of positive association of governance and political systems, including democracy and autocracy. Economic theory provides two interpretations for the positive association between sustainability of democracy and quality of institutions: the first explanation is that sustainable democracy requires developed and established economic institutions (Hayek, 1944 and Friedman, 1962,), while the second interpretation suggest that democratic governments have higher interest in high quality institutions than autocratic governments ( Przeworski and Limongi, 1993; and Olson, 1993). Acemoglu (2008), Acemoglu and Robinson (2006) show a high level of income inequality wear away the positive effect of democracy on institutional quality. A similar findings also reported by Fortunato and Panizza (2015) suggesting that the effect of democracy on institutional quality is positively associated with human capital. Aidt et al. (2008),and Venard (2013) used a panel data to assess the relationship between corruption and governance using separate two groups, a group of countries of high-quality institutions and a group of low-quality institutions. They found that economic growth is negatively associated with institutional quality and corruption, implying that improvement of institutional quality and corruption control are more effective policy directions to enhance economic development in countries with lower institutional quality than those of high institutional quality. To extend the aspect of this research line to the African countries, I conducted a research on institutional quality association with political systems, and accountability, and human development ratings in 20 African countries during the period 2020- 2022. Our research findings indicate evidence of significant effect of accountability and human development indexes on governance quality, while the effect of democracy level, on governance is insignificant. These results imply that the level of democracy is not a necessary condition for improving institutional quality in African countries, which may be due to difference in political culture of the African countries.