Is There a Causal Relation between Trade Openness and Economic Growth in the WAEMU Countries?

Abstract

In the West African Economic and Monetary Union (WAEMU) countries, it is a priori difficult to establish relationship between trade openness and economic growth. This is why we have tried to do so empirically using the Granger causality test. The results indicate that apart from Cote d'Ivoire and at 10% level, trade openness doesn't cause economic growth in the WAEMU countries. Conversely, economic growth does not cause trade openness. These results can be explained essentially by the fact that all the conditions are not yet assembled in the WAEMU countries so that trade openness can interact with economic growth. Indeed, openness is usually more profitable to countries that record quite high growth rates and whose industries have already reached maturity or are close to maturity. This is not the case of the WAEMU countries.