Explaining Episodes of Growth Accelerations, Decelerations, and Collapses in Western Africa

46 Pages Posted: 11 Mar 2009

See all articles by Patrick A. Imam

Patrick A. Imam

International Monetary Fund (IMF)

Gonzalo Salinas

International Monetary Fund (IMF)

Date Written: December 2008

Abstract

The growth literature has had problems explaining the "sub-Saharan African growth dummy" in cross-country regressions. Instead of taking the usual approach of focusing on long-run growth and assuming that sub-Saharan countries have homogenous parameters in growth regressions, we concentrate our analysis on episodes of growth turnarounds (identifying growth accelerations, decelerations, and collapses) and use only West African countries in our sample. The driving force of growth turnarounds are estimated by analyzing external shocks, political and institutional changes, economic reforms, and indicators particularly relevant to the region. Using probits for a group of 22 Western African economies for the period 1960-2006, we find that growth accelerations are most clearly associated with external shocks, economic liberalization, political stability, and closeness to the coast; decelerations occurred during short-lived regimes and when corruption indices weakened; and collapses are linked to external shocks, falling domestic credit, and proximity to the coast. We then identify policy implications.

Keywords: Economic growth, West Africa, Economic reforms, External shocks, Terms of trade, Transfers of foreigners income, Economic models

Suggested Citation

Imam, Patrick A. and Salinas, Gonzalo E., Explaining Episodes of Growth Accelerations, Decelerations, and Collapses in Western Africa (December 2008). Available at SSRN: https://ssrn.com/abstract=1356433 or http://dx.doi.org/10.2139/ssrn.1356433

Patrick A. Imam

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Gonzalo E. Salinas

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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