<p>Civil Liberties and Sovereign Default in Africa: Panel Evidence from 49 African Countries, 1995–2025</p>

This paper examines whether civil liberties reduce sovereign default risk in Africa using a panel of 49 African countries over 1995-2025 (1,519 country-year observations). Pooled logit, probit, conditional fixed-effects logit, and IV-Probit models with year fixed effects and a full set of macroeconomic controls all yield a negative, precisely estimated coefficient on the inverted Freedom House civilliberties score: a one-unit increase reduces the log-odds of external default by 0.625 (p < 0.01), equivalent to an average marginal effect of approximately 3.3 percentage points at the sample mean default rate of 5.3 percent. The finding is robust to political rights as an alternative institutional measure, alternative lag structures, random-effects estimation, and multiple subsample restrictions including Sub-Saharan Africa only, pre-and post-2010 splits, and high-debt country-years. The consistency of the civil-liberties coefficient across logit, probit, and random-effects probit specifications provides informal reassurance against rare-events bias. An IV-Probit strategy yields consistent estimates, and a Durbin-Wu-Hausman test fails to reject exogeneity (p = 0.219); we treat this as corroborating rather than fully identifying evidence, given the strong exclusion-restriction assumptions of lagbased instruments. Heterogeneity analysis reveals no significant moderation by debt levels, growth conditions, or IMF program participation, suggesting the protective effect operates primarily through direct institutional channels: government accountability, fiscal transparency, and policy credibility. These results strengthen the case for incorporating institutional quality into sovereign credit-risk assessments and carry direct implications for conditionality design in multilateral lending to Africa.