Welfare implications of external debt and capital flight in Sub-Saharan Africa (Evidence using panel data modelling)

Author:

Ampah Isaac Kwesi1ORCID,Kiss Gábor Dávid12

Affiliation:

1. 1Department of Economics Education, University of Education, Winneba, Ghana

2. 2Doctoral School of Economics, University of Szeged, Institute of Finance and International Economic Relations, University of Szeged, Szeged, Hungary

Abstract

AbstractThe countries in Sub-Saharan Africa (SSA) have experienced a positive growth rate of over five per cent per year, on average, since their transition from the Heavily Indebted Poor Countries Initiative in 1996 and the Multilateral Debt Relief Initiative in 2006. Despite this growth, poverty and inequality are still very high. Employing the Driscoll – Kraay standard panel estimation method and dataset from 1990 to 2015, this paper sets out to examine the implications of external debt and capital flight on the general welfare of the people. The estimation results reveal that both external debt and capital flight have a welfare inhibiting effect, suggesting that increases in external borrowing or capital flight may lead to a reduction in the welfare of the people in the sub-region. The study, therefore, recommends to policymakers and government in the sub-region the need to tackle the revolving nature of external borrowing and capital flight and take steps to halt all channels through which deservingly acquired capital leaves the sub-region.

Funder

European Social Fund

Publisher

Akademiai Kiado Zrt.

Subject

Economics and Econometrics

Cited by 2 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Analysis of the Effect of Tax Fairness and Complexity on Economic Welfare in Iran;Quarterly Journal of Economic Research and Policies;2024-03-01

2. Does External Debt Promote Human Longevity in Developing Countries? Evidence from West African Countries;Fudan Journal of the Humanities and Social Sciences;2023-02-11

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