North American Journal of Economics and Finance 36 (2016) 123–153 Contents lists available at ScienceDirect North American Journal of Economics and Finance Governance infrastructure and indebtedness of African countries: Do regional blocs matter? Stella Muhanji a , Kalu Ojah b,∗ a Kabarak University, Private Bag 20157, Nakuru, Kenya b University of the Witwatersrand, PO Box 98, Johannesburg, South Africa a r t i c l e i n f o Article history: Received 3 February 2015 Received in revised form 14 December 2015 Accepted 15 December 2015 Available online 31 December 2015 Keywords: External debt Governance institutions Regional integration Regional blocs Africa a b s t r a c t Motivated by the intermediating role of good institutions in enabling growth via external debt financed investment and the touted promise of regional integration for Africa’s growth prospect, we use data on 37 countries, over the period 2002–2010, to explore the governance institutions—external indebtedness nexus in Africa, at the regional bloc level. We find a robust negative relation between governance institutions and external indebtedness in East & Horn of Africa, Central Africa and Southern Africa; and unclear relationships in North and West Africa regions. Importantly, these baseline results are robust to the consideration of debt write-offs, natural resource rents, and endogeneity. Further, we find that geo- graphic, economic and cultural factors of proximity, intra-regional activity, shared official language, legal origin and dominant reli- gion, largely explain the commonality of Africa’s regional blocs of countries. These and other results of the study can support potential external debt management strategy that leverages effective gov- ernance institutions and enhanced regional economic integration. © 2015 Elsevier Inc. All rights reserved. 1. Introduction The Heavily Indebted Poor Countries (HIPC) initiative of 1996 is among several high profile pro- grams put forward by multilateral development organizations in attempts to mitigate the ravages of ∗ Corresponding author. Tel.: +27 11 717 3764. E-mail addresses: muhanjis@gmail.com (S. Muhanji), kalu.ojah@wits.ac.za (K. Ojah). http://dx.doi.org/10.1016/j.najef.2015.12.004 1062-9408/© 2015 Elsevier Inc. All rights reserved.