Determinants of Economic Growth in ECOWAS Countries: An Empirical Investigation
The Economic Community of West Africa States (ECOWAS) is a regional group consisting of 15 countries which was founded 1975 with the goal to promote economic trade, national cooperation, and the creation of a monetary union throughout West Africa. This paper empirically assesses the determinants of the economic development from 1996-2016 in ECOWAS using panel unit root tests, panel cointegration tests, and the estimation of the dynamic panel data regression via the Arellano–Bond estimator and Arellano–Bover and Blundell–Bond estimator. The empirical results show total factor productivity (TFP), law, and somewhat corruption are indicative of economic growth under the Arellano–Bond estimator. Under the Arellano–Bover and Blundell–Bond estimator, the results revealed that inflation, gross domestic saving (GDS), and TFP have a significant impact on economic growth in the ECOWAS. From these empirical results, improving economic growth in ECOWAS countries improves the quality of life of people and the government of each ECOWAS country become cognizant of the benefits in the implementation of pro-growth policies. The policy implication is that the governments of the ECOWAS countries should give policy priority to promote pro-growth economic policies and enhance institutions to enable economic growth.