Basic Infrastructure, Growth and Convergence in WAEMU

Abstract

The objective of this study is to analyze the role played by basic infrastructure in the growth and convergence of the economies of the West African Economic and Monetary Union (WAEMU). After a description of the dynamics of the basic infrastructure of WAEMU and a literature review on theories of integration, we will discuss the model of convergence used for this analysis. Data for this study consists of panel data for the eight member countries of WAEMU gathered between 1980 and 2012. Statistical data was retrieved from the World Bank. The conditional convergence model is estimated by GMM in dynamic panel of Arellano and Bond. The results show a phenomenon of conditional convergence in the Union. Moreover, they demonstrate that an improvement in economic and social infrastructure in the region would result from significant gains in per capita income growth.