Human Capital Development, Regulatory Quality and Economic Growth Nexus : Ardl Approach

The paper investigated the relationship between human capital development, regulatory quality and economic growth in South Africa. The government invests much of its recourses on human development indexes, yet these variables seem to have a paradoxical relationship with growth. There are few studies which employed econometric techniques to explore this relationship and another novelty is the introduction of one of the governance variables in the model, therefore, this justified the significance of conducting this paper as it seeks to narrow the gap in the discourse of the subject matter. By employing Autoregressive Distributed Lag approach, the study found out that total fixed capital formation, total consolidated expenditure on health and regulatory quality do have positive relationship with growth. Whereas total consolidated expenditure on education related negatively with growth. We recommend that total fixed capital formation and total consolidated expenditure on health be raised to enhance labour productivity and growth. Policy makers need to ensure that the resources for the development of education are properly managed and they need to deal with some of the efficiencies in this sector.