The push for financial inclusion in Africa: Should central banks be wary of political institutional quality and literacy rates?

Abel Mawuko Agoba; Yakubu Awudu Sare; Ebenezer Bugri Anarfo; Christian Tsekpoe

doi:10.1111/polp.12514

The push for financial inclusion in Africa: Should central banks be wary of political institutional quality and literacy rates?

Abel Mawuko Agoba
, Yakubu Awudu Sare
, Ebenezer Bugri Anarfo
, Christian Tsekpoe

University for Development Studies
Ghana Institute of Management and Public Administration
Pentecost University

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

278 Downloads (Pure)

Abstract

Motivated by the literature on reform complementarities and their importance for the effectiveness of central bank independence (CBI) reforms—particularly for African countries—where CBI has empirically not been found to have a significant impact on financial development, we explore the extent to which differences in literacy levels and political institutions could determine the extent and impact of CBI on financial inclusion. Using panel data from 2004 to 2014, we find that, while CBI does not promote financial inclusion in Africa, financial literacy and political institutions do; even to the extent of enabling CBI's impact on financial inclusion. The results are robust to different measures of political institutions from Freedom House and Polity IV Database and present implications for the role governments could play in shepherding central banks in Africa in the midst of Africa's developmental challenges and the global crises.

Original language	English
Pages (from-to)	114-136
Number of pages	23
Journal	Politics and Policy
Volume	51
Issue number	1
Early online date	12 Jan 2023
DOIs	https://doi.org/10.1111/polp.12514
Publication status	Published - Feb 2023

Bibliographical note

© 2023 The Authors. Politics & Policy published by Wiley Periodicals LLC on behalf of Policy Studies Organization.

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. (CC BY)

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

Africa
African development
CBI
central bank independence
central banks
financial inclusion
literacy rates
political economy
political institutions

Access to Document

10.1111/polp.12514Licence: CC BY

PublishedFinal published version, 843 KBLicence: CC BY
Politics Policy - 2023 - Agoba - The push for financial inclusion in Africa Should central banks be wary of politicalFinal published version, 510 KBLicence: CC BY

Cite this

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title = "The push for financial inclusion in Africa: Should central banks be wary of political institutional quality and literacy rates?",

abstract = "Motivated by the literature on reform complementarities and their importance for the effectiveness of central bank independence (CBI) reforms—particularly for African countries—where CBI has empirically not been found to have a significant impact on financial development, we explore the extent to which differences in literacy levels and political institutions could determine the extent and impact of CBI on financial inclusion. Using panel data from 2004 to 2014, we find that, while CBI does not promote financial inclusion in Africa, financial literacy and political institutions do; even to the extent of enabling CBI's impact on financial inclusion. The results are robust to different measures of political institutions from Freedom House and Polity IV Database and present implications for the role governments could play in shepherding central banks in Africa in the midst of Africa's developmental challenges and the global crises.",

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AU - Sare, Yakubu Awudu

AU - Anarfo, Ebenezer Bugri

AU - Tsekpoe, Christian

N1 - © 2023 The Authors. Politics & Policy published by Wiley Periodicals LLC on behalf of Policy Studies Organization. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. (CC BY)

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AB - Motivated by the literature on reform complementarities and their importance for the effectiveness of central bank independence (CBI) reforms—particularly for African countries—where CBI has empirically not been found to have a significant impact on financial development, we explore the extent to which differences in literacy levels and political institutions could determine the extent and impact of CBI on financial inclusion. Using panel data from 2004 to 2014, we find that, while CBI does not promote financial inclusion in Africa, financial literacy and political institutions do; even to the extent of enabling CBI's impact on financial inclusion. The results are robust to different measures of political institutions from Freedom House and Polity IV Database and present implications for the role governments could play in shepherding central banks in Africa in the midst of Africa's developmental challenges and the global crises.

KW - Africa

KW - African development

KW - CBI

KW - central bank independence

KW - central banks

KW - financial inclusion

KW - literacy rates

KW - political economy

KW - political institutions

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M3 - Article

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VL - 51

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JO - Politics and Policy

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ER -

The push for financial inclusion in Africa: Should central banks be wary of political institutional quality and literacy rates?

Abstract

Bibliographical note

UN SDGs

Keywords

Access to Document

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