What Is the Interaction Between Separation of Democratic Powers and Structural Transformation in Sub-Saharan Africa?

The independence of the judiciary and the legislature from the executive can promote the reallocation of labor, innovation, and human capital and thus the improvement of structural change and intra-industry productivity, the two main components of structural transformation. At the same time, structural transformation can foster the emergence of strong institutions through improved incomes and living standards. The objective of this paper is to analyze the interaction between democratic separation of powers and structural transformation in sub-Saharan Africa (SSA). We use data from the Varieties of Democracy (V-Dem) and the Africa Sector Database (ASD) and a vector autoregression (VAR) model on a panel of 18 SSA countries to illustrate our point. Our results show that the dependence of the legislative and judicial branches on the executive branch negatively affects structural change and intra-industry productivity. Moreover, judicial independence causes structural change, intra-industry productivity, and legislative independence at the same time, while legislative independence only causes structural change. On the other hand, structural change and intra-industry productivity are found not to cause judicial and legislative independence. These results suggest that judicial and legislative independence is likely to promote structural transformation, while improving the quality of democratic institutions is not directly related to economic performance in SSA. This study promotes the independence of these two branches of government by reducing educational inequalities.