Export Diversification and Human Development in WAEMU Countries

Abstract

Using data from the eight member states of the West African Economic and Monetary Union (WAEMU) over the period 2005–2023, this study investigates the impact of export diversification on human development. Preliminary econometric diagnostics confirm the presence of cross-sectional dependence, serial correlation, and heteroskedasticity in the dataset. Accordingly, we employ Panel-Corrected Standard Errors (PCSE), Feasible Generalized Least Squares (FGLS), and Driscoll and Kraay estimation techniques. The baseline results indicate that overall export diversification, proxied by the Herfindahl-Hirschman index, the relative Theil index, and the Theil entropy index, has a positive and statistically significant impact on human development. In addition, robustness checks consistently confirm the main findings and further reveal that agricultural sector-based export diversification exerts a positive effect on human development outcomes. The paper concludes with policy recommendations.