Sources of Economic Growth in the Southern African Development Community: Its Likely Impact on Povery and Employment

Abstract

As a means to combat poverty, many countries still pursue high and stable rates of economic growth. In order to attain sustained economic growth, it is crucial that countries do not only accumulate a certain stock of factors of production, but demonstrate the ability to combine such factors in an efficient manner. This study attempts to investigate the key sources of economic growth in the Southern African Development Community (SADC) region, using different panel data techniques, and make inference on poverty and employment. The findings reveal that factors affecting economic growth in the region are: inflation, government expenditures, openness to trade, human capital, level of financial development, and political stability. Furthermore, from the analysis it can be inferred that a higher growth rate has a positive impact on employment and, hence, may lead to poverty reduction.