The spatial spillover effect of institutional quality on the path to sustainable socioeconomic development in Africa

Abstract

Africa's sustainable socioeconomic development is increasingly challenged by institutional disparities, where weak governanceundermines progress in human capital indicators such as life expectancy and educational attainment. Despite recognition ofinstitutional quality's role in fostering transparency, accountability, and stability, existing research often overlooks its spatialspillover effects across interconnected African nations. This study aims to examine the direct and spillover impacts of institu-tional quality proxied by transparency (corruption perception), rule of law, and political stability on life expectancy and meanyears of schooling in 42 African countries over the period 2012–2022. Employing spatial panel econometric models, includingthe Spatial Durbin Model (SDM), Spatial Autoregressive Model (SAR), and Spatial Error Model (SEM), the analysis controls forGDP per capita and population growth. The results reveal significant positive spatial autocorrelation in both outcomes (Moran'sI: 0.536 for life expectancy; 0.469 for schooling). For life expectancy, institutional quality (particularly the rule of law) exhibitsstrong positive direct and spillover effects, amplified by regional GDP and population dynamics, indicating that governanceimprovements in one country enhance health outcomes in neighbors through policy diffusion and cross-border cooperation. Incontrast, educational attainment shows no significant spillovers, driven primarily by domestic GDP, population, and rule of law,highlighting fragmented regional education systems. These findings underscore institutional quality as a regional public good,offering nuanced insights for harnessing spatial interdependence in Africa's development agenda