Convergence and Economic Integration in Africa: the Case of the Franc Zone Countries
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Date
2010-08
Authors
Dramani, Latif A.G.
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
Using the convergence theory inspired by models of endogenous growth, this paper
analysed convergence in the economies of the Franc Zone countries in Africa. In recent
years studies on the convergence of economies using beta- and sigma-convergence
theories have been improved by taking into account spatial phenomena that had until
then been neglected by specification models. Using an econometric validation based
on cross-sectional and panel data, the study tested a number of hypotheses, the main
ones being the convergence of the economies of the West African Economic and
Monetary Union (UEMOA) and Economic and Monetary Community of Central Africa
(CEMAC) zones through certain economic and budgetary variables, the existence of
spillover effects, as well as the search for a common growth path for the economies of
the two zones. The study’s findings show that the convergence process, and hence that
of integration, has not been carried out uniformly in the Franc Zone: the process has
been given greater emphasis in UEMOA than in CEMAC Zone. Further, the technique
used to measure the conditional convergence model made it possible to highlight the
existence of key variables that help to maximize the convergence speed. A more refined
convergence approach, which used similarities related to production factors and those
related to natural advantages made it possible to highlight the presence of a convergence
club. The study found a period-related convergence in the cotton-producing countries,
coffee-producing countries and coastal countries. This shows that the hypothesis of a
common convergence path in the Franc Zone has not been borne out by our study. The
analysis of spatial effects has brought to the fore the existence of inhibitory effects on
the convergence speed. Taking border effects into account contributed to reducing the
convergence speed by half on average over the post-devaluation period and by one-fifth
over the structural adjustment period.
Description
HG 3897.4 D73 2010
Keywords
French Franc Area , Monetary Unions Africa , Africa - Economic Intergration , sigma convergence , stochastic convergence , panel data, , spatial autocorrelation