Essays on Climate Change, Institutional Quality, Economic Growth, and Poverty Vulnerability: Macro–Micro Perspectives from Sub-Saharan Africa
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Date
2025-06-22
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A.A.U
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This dissertation comprises empirical analyses of climate change’s effects on aggregate and sectoral economic growth in Sub-Saharan Africa, including an examination of how institutional quality may influence these effects. It also investigates how climate variability affects poverty vulnerability in Ethiopia. As part of this dissertation, the first paper uses panel data from 43 Sub-Saharan African countries (1970–2019) and employs fixed effects and seemingly unrelated regression models to examine climate change’s effects on aggregate and sectoral economic growth, finding that rising temperatures and reduced precipitation disproportionately affect agriculture, with vulnerable countries facing the greatest economic losses, while industry, manufacturing, and services exhibit resilience. Expanding upon this, the second paper employs System GMM and a long-run multiplier approach with panel data from 43 Sub-Saharan African countries (1996–2019) to explore how institutional quality conditions climate change’s effects on economic growth, revealing that stronger institutions enhance resilience but struggle to offset rising temperatures’ long-term impacts, while corruption and political instability worsen environmental degradation and economic challenges, emphasizing the need for integrated institutional reforms and climate adaptation strategies. Extending this analysis, the third paper examines climate variability’s impacts on poverty vulnerability in Ethiopia, using three-round micro-panel data from the Ethiopian Socioeconomic Survey (3,313 households) and climate data from the Ethiopian Meteorological Agency (2010–2016) with a two-level random coefficient model and fixed effects, finding that climate variability has a greater impact on poverty vulnerability than socioeconomic factors, particularly among rural households with larger families and higher dependency ratios. Thus, this dissertation recommends a multi-pronged policy framework for SSA: (1) boost agricultural resilience through climate-smart practices (e.g., drought-resistant crops, irrigation systems) to mitigate sectoral losses; (2) strengthen institutional quality via anti-corruption measures and governance reforms to curb environmental degradation and enhance long-term economic stability; and (3) implement targeted interventions in Ethiopia and similar SSA contexts, including climate-resilient agriculture, sustainable farming techniques (e.g., agroforestry), livelihood diversification (e.g., off-farm income), and expanded social protection (e.g., cash transfers, insurance schemes) to reduce poverty vulnerability and build household resilience.
Key Words: Climate Change, Economic Growth, Institutional Quality, Poverty Vulnerability