Human Development and Fiscal Decentralization and Poverty in Ten African Countries (2006-2023): An Econometric Case Study

Abstract

Human development plays a vital role in empowering individuals with the necessary skills, education, healthcare, and employment opportunities required to drive sustainable economic growth, reduce poverty, and improve the overall quality of life across African countries. However, many governments across the continent have not fully utilized national resources to foster such development. Moreover, there is limited empirical evidence on the role of fiscal decentralization in enhancing human development in Africa. To address this gap, this study investigates the impact of fiscal decentralization on human development in selected African countries. The analysis is based on panel data covering ten African countries over an 18-year period (2006–2023), sourced from the World Development Indicators (WDI), the International Monetary Fund (IMF) Fiscal Decentralization Database, and the World Governance Index (WGI). The study utilizes both descriptive statistics and inferential regression techniques. Specifically, it applies panel unit root tests, including Levin, Lin, and Chu (LLC, 2002), Im, Pesaran, and Shin (IPS, 2003), as well as the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests categorized as first-generation panel unit root tests. The findings reveal that key indicators of fiscal decentralization significantly influence the Human Development Index (HDI) in the sampled African countries. Based on these results, the study recommends that the governments of these countries adopt and implement sustainable economic policies that prioritize fiscal decentralization as a means of advancing human development across the continent.