The Contribution of Economic Complexity to Social Welfare in Africa

Using data collected on 27 African countries over the period 1996–2017 and Driscoll-Kraay standard errors and instrumental variable (IV) techniques, this paper investigates the extent to which economic complexity contributes to improving social welfare. Human Development Index (HDI), infant mortality rate, life expectancy at birth, household consumption expenditure and human capital are the main indicators chosen to capture social welfare. The results show that, as economies produce and export highly complex goods, social welfare is enhanced. This study also indicates that GDP per capita and globalization moderate the effects of economic complexity on social welfare.