Alternating Heads of State And Structural Transformation In Sub-Saharan Africa: A Panel VAR Analysis
Abstract
This study examines the dynamic interaction between head-of-state alternation and structural transformation in sub-Saharan Africa (SSA), an issue that has received limited attention compared with the established literature on political alternation and economic growth. Using data from Limi Kouotou and Epo (2019), the Africa Sector Database, and World Development Indicators for 17 SSA countries over 1970–2015, the study estimates a panel vector autoregression (pVAR) model. The study examines structural transformation through two components: structural change and intra-industry productivity. The results show that innovations in head-of-state alternation are more strongly associated with structural change than with intra-industry productivity. The impulse-response analysis further indicates that head-of-state alternation responds positively to structural-change shocks and negatively to intra-industry-productivity shocks. Forecast-error variance decomposition shows that innovations in head-of-state alternation explain 25.5% of the variance in structural change and 13.4% of the variance in intra-industry productivity, while FDI accounts for 51.2% of the forecast-error variance in head-of-state alternation. The study contributes to the literature by moving beyond the conventional growth–politics relationship and demonstrating the dynamic association between political alternation and the components of structural transformation in SSA.
- Head-of-state alternation is more strongly linked to structural change.
- Panel VAR evidence covers 17 sub-Saharan African countries, 1970–2015.
- Structural-change shocks raise head-of-state alternation in the short run.
- Intra-industry productivity shocks show a different political response.
- FDI explains a large share of variation in head-of-state alternation.
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