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The Nexus between Governance Infrastructure and the Ease of Doing Business in Africa

The Nexus between Governance Infrastructure and the Ease of Doing Business in Africa
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Author(s): Aye Mengistu Alemu (Solbridge International School of Business, South Korea)
Copyright: 2015
Pages: 22
Source title: Comparative Case Studies on Entrepreneurship in Developed and Developing Countries
Source Author(s)/Editor(s): Joseph Ofori-Dankwa (Saginaw Valley State University, USA) and Kwame Boasiako Omane-Antwi (Pentecost University College, Ghana)
DOI: 10.4018/978-1-4666-7533-9.ch007

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Abstract

This chapter examines how each element of “good governance infrastructure” may influence the “ease of doing business” for a sample of 41 African countries from 2005 to 2012. The empirical results from GMM and other estimation methods reveal government effectiveness, political stability, rule of law, regulatory quality, and absence of corruption are robust determinants for creating conducive business atmosphere, taking into account other factors such as human capital, physical infrastructure, and the level of development of a country. Nevertheless, no evidence has been found for voice and accountability to significantly affect the ease of doing business. This implies that a government may enhance political stability, rule of law. Government effectiveness and low level of corruption is likely to create a more favorable business atmosphere despite offsetting deficiencies in voice and accountability.

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