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Insurance Development and Economic Growth in Sub-Saharan Africa: Does Institutional Quality Matter?

Author

Listed:
  • Enisan, Akinlo Anthony

    (Obafemi Awolowo University)

  • Taiwo, Akinlo

    (Adeyemi College of Education, Nigeria)

Abstract

This paper investigates how institutional environments shape the relation between insurance development and economic growth nexus in a panel of 39 sub-Saharan African countries from 1991 to 2018 using the two-step system Generalised Method of Moment (GMM) estimation technique. The results show that total insurance, life insurance, and non-life insurance positively impacted economic growth. While the political environment and the rule of law enhance economic growth, economic freedom, and legal and property rights hurt it. Finally, the interaction of insurance and institutional quality variables is associated with lower growth. These results not only support North’s (1990) argument that institutions play a critical role in nations’ economic growth but corroborate the hypothesis that unhealthy political institutions could deter the growth-effect of insurance. The findings from this study underlie the importance of strengthening the institutional factors to enhance insurance development’s impact on economic growth in Africa.

Suggested Citation

  • Enisan, Akinlo Anthony & Taiwo, Akinlo, 2024. "Insurance Development and Economic Growth in Sub-Saharan Africa: Does Institutional Quality Matter?," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 49(4), pages 71-98, December.
    • Handle: RePEc:ris:jecdev:0101
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    References listed on IDEAS

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    More about this item

    Keywords

    Insurance Development; Economic Growth; Institutional Quality; Panel Data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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