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Research articles

Political institutions, human capital and innovation: evidence from sub-Saharan Africa

Pages 666-708 | Received 27 Apr 2018, Accepted 12 Jan 2019, Published online: 08 Feb 2019
 

ABSTRACT

Using data for a sample of 35 sub-Saharan African economies for 1995–2015, this study examines the extent to which political institutions identified as belonging to democratic or autocratic regimes explains the existing differences in innovation across sub-Saharan Africa. While the very few existing studies focus only on the direct effect of institutions, this article examines the impact of the interaction between different regime types and human capital development on innovation in developing countries. The evidence provides very strong support for the direct effect of democratic development on innovation as well as for its indirect effect via its impact on human capital development. However, the results do not support theories that argue in favour of interaction between democracy and human capital, thereby pointing to the need for better calibration of the numerous existing theories and related empirical measures.

Acknowledgements

The author gratefully acknowledges the financial support from graduate school of social and political sciences of the University of Milan. Also, the author is grateful to Professor Dr Giovanni Carbone, Professor Dr Fabio Franchino, Andrea Cassani, Jovan Bliznakovski, Lemessa Bayissa Gobena, Kassa Teshager Alemu and the two anonymous reviewers of the Journal for their constructive comments on the earlier draft of the article. The author further thanks the co-editor of Democratization, Prof. Dr Aurel Croissant, for useful and constructive suggestions for improving the original version of the article. The usual caveats apply.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

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2. Acemoglu and Johnson, “Unbounding Institutions”; North, Structure and Change in Economic History.

3. Schumpeter, The Theory of Economic Development; Romer, “Endogenous Technological Change”.

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5. Zahra and George, “Absorptive Capacity”.

6. van Uden, Knoben, and Vermeulen, “Human Capital and Innovation in Sub-Saharan Countries”.

7. Bourdieu, “The Forms of Capital”.

8. Dinopoulos and Syropoulos, “Rent Protection as a Barrier to Innovation and Growth”.

9. Tebaldi and Elmslie, “Does Institutional Quality Impact Innovation?”

10. North, Institutional Change and Economic Performance, 3.

11. Engerman and Sokoloff, “Factor Endowments, Institutions and Differential Paths of Growth Among New World Economies”, 261.

12. Furubotn and Richter, Institutions and Economic Growth, 37.

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18. Kaufmann and Kraay, “Governance Indicators?”; Knack, “Social Capital and the Quality of Government”.

19. Tebaldi and Elmslie, “Does Institutional Quality Impact Innovation?”

20. Ibid.

21. Crespi and Zuniga, “Innovation and Productivity”.

22. George et al., “Bringing Africa in”.

23. Ndubuisi, “Improving Innovation in Africa.”

24. Schumpeter, The Theory of Economic Development.

25. Christensen, The Innovator's Dilemma.

26. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data.

27. Bell and Albu, “Knowledge Systems and Technological Dynamism”.

28. Amman and Cantwell, Innovative Firms in Emerging Market Countries.

29. Cohen and Levinthal, “Absorptive Capacity”.

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31. López-Claros and Mata, “Innovation Capacity Index”.

32. Patt, Democracy and Economic Planning.

33. Drezner, “State Structure, Technological Leadership and the Maintenance of Hegemony”.

34. Siegle et al., “Why Democracies Excel?”

35. Drezner, “State Structure, Technological Leadership and the Maintenance of hegemony”.

36. Ibid.

37. Siegle et al., “Why Democracies Excel?”

38. Miller et al., “Understanding Political Change in Post-Soviet Societies”; Roland, et al., The Economic Determinants of Innovation.

39. Mansfield and Snyder, “Electing to Fight”.

40. Acemoglu and Robinson, Economic Origins of Dictatorship and Democracy.

41. Easterly and Levine, “Tropics, Germs and Crops”; Rodrik et al., “Institutions Rule”.

42. Sala-i-Martin, X. “15 Years of New Growth Economics?”

43. Ibid., 18.

44. Freeman, Technology Policy and Economic Performance.

45. Lundvall, ed. National Systems of Innovation.

46. Annelies van Uden et al., “Human Capital and Innovation in Sub-Saharan Countries”.

47. Dakhli and De Clercq, “Human Capital, Social Capital, and Innovation”.

48. Crespi and Zuniga, “Innovation and Productivity”.

49. George et al., “Bringing Africa in”.

50. van Uden et al., “Human Capital and Innovation in Sub-Saharan Countries”.

51. Lipset, “Some Social Requisites of Democracy”.

52. Barro, “Human Capital and Growth in Cross Country Regressions”; Castello-Climent, “On the Distribution of Education and Democracy”; Jeroen and Jakob, “Political Regime and Human Capital”.

53. Feng, Democracy, Governance, and Economic Performance.

54. Brown and Hunter, “Democracy and Human Capital Formation”.

55. Sen, Poverty and Famines; Przeworski et al.'s, Democracy and Development.

56. Feng, Democracy, Governance, and Economic performance.

57. Ames, Political Survival, 42.

58. Davin, Democracy and Economic Planning; Cockshott and Cottrell, Towards a New Socialism.

59. Bueno de Mesquita et al., The Logic of Political Survival.

60. Hall, Generalized Method of Moments.

61. Greene, Econometric Analysis.

62. Driscoll and Kraay, “Consistent Covariance Matrix Estimation with Spatially Dependent Data”.

63. Hoechle, “Robust Standard Errors for Panel Regressions with Cross-Sectional Dependence.”

64. Thomas and Eric, “The Level of Democracy during Interregnum Periods”.

65. Marshall and Jaggers, Polity IV Project: Dataset Users’ Manual.

66. Hadenius and Teorell, “Assessing Alternative Indices of Democracy”; Elkins, “Gradations of Democracy?”

67. Barro and Lee, “A New Data Set of Educational Attainment in the World, 1950–2010”.

68. Psacharopoulos, “Returns to Investment in Education”.

69. Gates et al., “Institutional Inconsistency and Political Instability”; Mansfield and Snyder, Electing to Fight.

70. Moyo, Winner Take All.

71. Thomas and Denis, “ Social Mobility in Five African Countries”; Firmin-Sellers, “Institutions, Context, and Outcomes”.

72. Przeworski et al., Democracy and Development.

73. Baum and Lake, “The Political Economy of Growth”.

74. Hall and Jones, “Why Do Some Countries Produce so much more Output per Worker than Others?”

75. Siegle et al., “Why Democracies Excel?”

76. Gradstein, “Governance and Growth”.

77. The Global Innovation Index 2018.

78. Cheeseman, Democracy in Africa.

79. The Global Innovation Index 2018.

80. Ibid.

81. Ibid.

82. Democracy Index 2017.

83. The Global Innovation Index 2018.

84. Cheeseman, Democracy in Africa.

85. Freedom in the World 2017.

86. Cheeseman, Democracy in Africa.

87. Ibid.

88. Ibid.

89. Temnin, “Democratic Governance in Africa”; “Freedom in the World 2018”.

90. Dewatripont and Roland. “The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy”.

91. Baldacci et al., “Social Spending, Human Capital, and Growth in Developing Countries”.

92. Moyo, Winner Take All.

93. Gates et al., “Institutional Inconsistency and Political Instability”.

94. Feng, Democracy, Governance, and Economic Performance.

95. Ames, Political Survival.

96. Davin, Democracy and Economic Planning.

Additional information

Funding

This work was supported by graduate school of social and political sciences of the University of Milan [005].

Notes on contributors

Dejene Mamo Bekana

Dejene Mamo Bekana is a PhD candidate in political studies at the University of Milan, Italy. Before admission to the PhD, he holds a position of an Assistant Professor at the College of Finance, Management and Development of the Ethiopian Civil Service University, Addis Ababa, Ethiopia. He holds a Master's degree in Business Administration from the Addis Ababa University, a BA degree in Economics from the Mekelle University and a BA degree in Accounting from Jimma University. His previous publications have appeared in Innovation and Development, Journal of Comparative Asian Development, Public Finance Quarterly, Economic Insights: Trends and Challenges, Journal of Developing Areas, The Journal of Business and Administrative Studies, The Romanian Economic Journal, Management and Marketing Journal and Young Economists Journal. Also, he is the co-author of a book chapter, Gender and Energy Nexus in Ethiopia: An Analytical Review. In Paschal B. Mihyo and Truphena E. Mukuna (2016) the Gender-Energy in Eastern and Southern Africa. His forthcoming publications will appear in The International Journal of Development and Sustainability and the Journal of Contemporary African Studies.

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