Democracy and Human Capital in Africa

ABSTRACT Democracy plays a crucial role in public choice and institutional economics, as it is regarded as an inclusive institution that can enhance human capital. However, its complexity may impede its effects on human capital, resulting in inconclusive empirical findings. This study aims to investigate the effects of democracy on human capital in Africa, a region that lags behind others in achieving sustainable development goals (SDGs), particularly in the area of human capital. The research employed fixed effects, instrumental variables, and two‐stage least squares (2SLS) on data from 41 African countries spanning from 1990 to 2019. The results indicate that democracy enhances human capital in Africa, as evidenced by positive and significant coefficients related to average years of schooling, returns on education, and life expectancy. The findings are robust across various tests, including lagged variables, an alternative measure of democracy, and different African subsamples. African governments should implement initiatives to translate democratic gains into tangible improvements in education and healthcare, particularly in underserved areas, by utilizing community‐based programs to build schools, train teachers, and enhance healthcare facilities.