Institutional Performance and Global Competitiveness: A Panel Study of G20 and African Countries

Abstract

This study investigates the long- and short-run effects of institutional performance on global competitiveness across a panel of G20 and African countries over the period 2014–2024. Using an ARDL (Auto-Regressive Distributed Lag) panel approach, the analysis identifies a significant and stable cointegration relationship between the Global Competitiveness Index (GCI) and key institutional variables, including the rule of law and government effectiveness, as well as macroeconomic indicators such as GDP per capita, inflation, and foreign direct investment (FDI). The findings indicate that improvements in institutional quality not only enhance long-term competitiveness but also yield immediate short-run gains. The error correction mechanism confirms a strong adjustment process towards equilibrium following short-term deviations. These results underscore the importance of good governance and macroeconomic stability as critical levers for sustainable competitiveness. Policy recommendations highlight the need for context-specific institutional reforms, coordinated macroeconomic strategies, and regional cooperation, particularly for African countries aiming to close the competitiveness gap with more advanced economies.