The role of institutional quality in shaping economic growth: Evidence from Somalia

IF 2.1 3区经济学 Q2 DEVELOPMENT STUDIES

Development Policy Review Pub Date : 2026-04-03 DOI:10.1111/dpr.70067

Abdikani Yusuf Abdulle, Najma Abdirahman Ibrahim, Suhera Dahir Hassan, Ahmed Hussein Mohamud, Hafsa Ali Hassan

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引用次数: 0

Abstract

Motivation

Institutional quality and its impacts on economic growth are crucial in fragile states like Somalia, where weak governance, corruption, and political instability hinder effective policy implementation and economic development. This study is motivated by the need to understand how improving institutional frameworks can foster sustainable economic growth in Somalia despite these challenges.

Purpose

This study examines the impact of institutional quality on economic growth in Somalia from 1989 to 2023. The research focuses on how institutional quality, trade openness, foreign direct investment (FDI), inflation, and government expenditure influence Somalia's economic growth. In particular, the study investigates the relationship between these variables in both the short and the long run.

Approach and methods

To address the research question, the study employs an autoregressive distributed lag (ARDL) model, using time-series data from 1989 to 2023. The model explores both short-term and long-term relationships between institutional quality and economic growth. The study also considers variables such as trade openness, FDI, government expenditure, and inflation, employing various diagnostic tests to ensure the robustness of the results.

Findings

The study finds a significant positive long-term relationship between institutional quality, trade openness, FDI, and government expenditure with economic growth. In contrast, inflation negatively affects growth. Both institutional quality and government expenditure have a negative effect on growth in the short run, emphasizing the transition costs associated with reforms. The error correction term indicates a swift adjustment to long-run equilibrium.

Policy implications

The findings suggest that improving institutional frameworks, prioritizing trade liberalization, and controlling inflation are essential for fostering sustainable growth in Somalia. Additionally, Somalia should focus on increasing its FDI by means of regulatory reforms and improved infrastructure to further boost its economic growth prospects.

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制度质量在塑造经济增长中的作用：来自索马里的证据

制度质量及其对经济增长的影响在索马里等脆弱国家至关重要，在这些国家，治理薄弱、腐败和政治不稳定阻碍了有效的政策实施和经济发展。尽管存在这些挑战，但需要了解改善体制框架如何促进索马里的可持续经济增长，这是本研究的动机。本研究考察了1989年至2023年索马里制度质量对经济增长的影响。研究的重点是制度质量、贸易开放程度、外国直接投资（FDI）、通货膨胀和政府支出如何影响索马里的经济增长。特别是，该研究调查了这些变量在短期和长期之间的关系。为了解决研究问题，本研究采用自回归分布滞后（ARDL）模型，使用1989 - 2023年的时间序列数据。该模型探讨了制度质量与经济增长之间的短期和长期关系。该研究还考虑了贸易开放、外国直接投资、政府支出和通货膨胀等变量，采用了各种诊断测试来确保结果的稳健性。研究发现，制度质量、贸易开放程度、FDI和政府支出与经济增长之间存在显著的长期正相关关系。相反，通货膨胀会对经济增长产生负面影响。体制质量和政府支出在短期内对增长都有负面影响，强调与改革有关的过渡成本。误差修正项表明对长期均衡的快速调整。研究结果表明，改善体制框架、优先考虑贸易自由化和控制通货膨胀对于促进索马里的可持续增长至关重要。此外，索马里应注重通过管制改革和改善基础设施来增加外国直接投资，以进一步促进其经济增长前景。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Development Policy Review DEVELOPMENT STUDIES-

CiteScore

3.50

自引率

5.90%

发文量

期刊介绍： Development Policy Review is the refereed journal that makes the crucial links between research and policy in international development. Edited by staff of the Overseas Development Institute, the London-based think-tank on international development and humanitarian issues, it publishes single articles and theme issues on topics at the forefront of current development policy debate. Coverage includes the latest thinking and research on poverty-reduction strategies, inequality and social exclusion, property rights and sustainable livelihoods, globalisation in trade and finance, and the reform of global governance. Informed, rigorous, multi-disciplinary and up-to-the-minute, DPR is an indispensable tool for development researchers and practitioners alike.