Law, political stability, tourism management and economic development in sub-Saharan Africa

ABSTRACT

This study complements the extant literature by assessing how the rule of law and political stability modulate tourism development dynamics (i.e. tourism receipts and tourism expenditure) to affect economic development in terms of gross domestic product (GDP) per capita. The study focuses on 47 countries in sub-Saharan Africa (SSA) with data for the period 2002–2018 and the empirical evidence is based on the Generalized Method of Moments. The study finds that: (i) the rule of law modulates both tourism receipts and tourism expenditure for overall positive effects on economic development and (ii) political stability modulates tourism receipts for an overall positive impact on economic development. Policy implications are discussed.

KEYWORDS:

• Tourism management
• economic growth
• sub-Saharan Africa

JEL CODES:

• O10
• O40
• Z3
• Z32

Acknowledgement

The authors are indebted to the editor and reviewers for constructive comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The 47 sampled countries are: ‘Benin; Burkina Faso; Burundi; Central African Republic; Chad; Congo Democratic Republic; Eritrea; Ethiopia; The Gambia; Guinea; Guinea-Bissau; Liberia; Madagascar; Malawi; Mali; Mozambique; Niger; Rwanda; Sierra Leone; Somalia; South Sudan; Tanzania; Togo; Uganda; Angola; Botswana; Cabo Verde; Cameroon; Comoros; Congo Republic; Cote d'Ivoire; Equatorial Guinea; Eswatini; Gabon; Ghana; Kenya; Lesotho; Mauritania; Mauritius; Namibia; Nigeria; Sao Tome and Principe; Senegal; South Africa; Sudan; Zambia and Zimbabwe’.

2 ‘First, the null hypothesis of the second-order Arellano and Bond autocorrelation test (AR (2)) in difference for the absence of autocorrelation in the residuals should not be rejected. Second, the Sargan and Hansen over-identification restrictions (OIR) tests should not be significant because their null hypotheses are the positions that instruments are valid or not correlated with the error terms. In essence, while the Sargan OIR test is not robust but not weakened by instruments, the Hansen OIR is robust but weakened by instruments. In order to restrict identification or limit the proliferation of instruments, we have ensured that instruments are lower than the number of cross-sections in most specifications. Third, the Difference in Hansen Test (DHT) for exogeneity of instruments is also employed to assess the validity of results from the Hansen OIR test. Fourth, a Fisher test for the joint validity of estimated coefficients is also provided’ (Asongu & De Moor, 2017, p. 200).