Governance as a moderator of the education-growth nexus: Evidence from African economies

Education is widely recognized as a cornerstone of economic development, enhancing human capital, fostering innovation, and boosting productivity. Likewise, governance, characterized by institutional effectiveness, transparency, and anti-corruption measures, plays a crucial role in the successful implementation of educational and economic policies. However, the extent to which governance moderates the impact of education on economic growth remains underexplored, particularly in developing countries with varying institutional dynamics. This study examines the moderating role of governance in the education-growth relationship through an econometric analysis of panel data from seven African countries (Morocco, Tunisia, Egypt, South Africa, Kenya, Ghana, and Rwanda) spanning 1996 to 2023. Using the Robust Weighted Least Squares (RWLS) method, the findings reveal that education, measured by average years of schooling, has a direct but limited positive effect on economic growth due to persistent challenges in education quality. However, governance, proxied by government effectiveness, significantly amplifies this impact, indicating that strong institutions enhance the alignment between educational outcomes and labor market needs. These findings underscore the necessity of integrated public policies that combine educational investment with institutional reforms to maximize the economic benefits of education in developing economies.