ASSESSING THE IMPACT OF INTEGRATION ON ECONOMIC GROWTH AND FOOD SECURITY IN ECOWAS

  • Almame Abdoulganiour TINTA Université Ouaga 2, Burkina Faso
  • Daniel Bruce SARPONG University of Ghana, Ghana
  • Idrissa Mohamed OUEDRAOGO Université Ouaga 2, Burkina Faso
  • Ramatu Al HASSAN University of Ghana, Ghana
  • Akwasi Mensah-BONSU University of Ghana, Ghana
  • Edward Ebo ONUMAH University of Ghana, Ghana

Abstract

This study analyzes the potential of regional integration through the culture of trade value chains in accelerating economic growth and achieving food security with a focus on ECOWAS. Some strategies that regional integration can promote to stimulate economic growth and increase food security are compared. The study examines whether countries must develop strategies to raise international trade through increasing openness degree or whether countries must develop policies to reinforce community or regional trade through the potential of value chains inside the regional integration. Three instruments are investigated (trade openness, intra-regional trade openness and the community insertion to value chains). Two models are estimated with panel fixed effects using data from 1995 to 2012. The findings support that regional integration needs to be strengthen and better promoted in order to stimulate the potential of each country to move from discontinuous growth to sustained growth. International trade is not a solution for ECOWAS countries to boost economic growth, but regional trade linked to creation of value chains among each country can be the engine of the region growth and food security.

References

[1] Africa Growth Initiative. 2016. Foresight Africa: Top Priorities for the Continent in 2016.
[2] Andersen, L. and Babula, R. 2008. The Link between Openness and Long-Run Economic Growth, Journal commerce and economics, Web Version, 1-20
[3] Azam, J.P, Fosu, A. and Ngung’u. N. 2002. Explaining Slow Growth in Africa, African Development Review, 14: 177-220.
[4] Baldwin, R. 2008. Managing the Noodle Bowl: The Fragility of East Asian Regionalism, in Singapore Economic Review, 53(3): 449-478.
[5] Baldwin, R. 2011b. Trade and Industrialization after Globalization’s 2nd Unbundling: How Building and Joining a Supply Chain are Different and Why It Matters, NBER Working Paper 17716 (Cambridge MA, National Bureau of Economic Research).
[6] Barro, R., and Sala-i-Martin, X. 1995. Economic Growth, Mc Graw Hill, New-York.
[7] Beghin, J., Maertens, M. and Swinnen, J. 2015. Non-tariff Measures and Standards in Trade and Global Value Chains. Annual Review of Resource Economics, 7: 425–450.
[8] Ben-David, D. 1996. Trade and Convergence among Countries, Journal of International Economics, 40: 279-298.
[9] Berthelemy, J.-C., and Soderling, L. 2002. Will There Be New Emerging Market Economies in Africa by the Year 2020? IMF Working Paper WP/02/131, August.
[10] Bezuneh, M., and Yiheyis, Z. 2014. Has Trade Liberalization Improved Food Availability in Developing Countries? An Empirical Analysis, Journal of economic development, Beijing, 39(1): 63 – 78.
[11] Calderon C. 2009. Infrastructure and Growth in Africa, Policy Research Working Paper Series 4914, The World Bank.
[12] Chand, R. and Jumrani, J. 2013. Food Security and Undernourishment in India: Assessment of Alternative Norms and the Income Effect, Ind. Jn. of Agri. Econ. 68(1): 39 - 53.
[13] Chandra, V. and Kolavalli, S. 2006. Technology, Adaptation and Exports—How Some Developing Countries Got It Right. THE WORLD BANK Washington, DC
[14] Chen, C., and Ducan, R. 2008. Achieving Food Security in China: Implications of World Trade Organization Accession, ACIAR Technical Reports, 69, Canberra: Australian Center for International Agricultural Research.
[15] Collier, P. 2007. The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done about It. Oxford: Oxford University Press.
[16] Comin, D. A. and Mestieri Ferrer, M. 2013. If Technology Has Arrived everywhere, why has Income Diverged?" NBER Working Papers 19010, National Bureau of Economic Research, Inc.
[17] Darshini, J S. 2012. Food Security in India – Challenges Ahea, International Journal of Research in Commerce, Economics & Management, 2(12):112-120.
[18] Dollar, D. 1992. Outward-Oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-85, Economic development and cultural Change, 40 (3): 523-544.
[19] Dorosh, P.A. 2004. Trade, Food Aid and Food Security: Evolving Rice and Wheat Markets. Economics and Political Weekly, 39: 4033 -4042.
[20] Dries, L. and Swinnen, J. 2010. The Impact of Interfirm Relations on Investments: Evidence from the Polish Dairy Sector. Food Policy, 35: 121–129.
[21] Economic and Social Commission for Asia and the Pacific ESCAP. 2015. Global value chains, regional integration and sustainable development: linkages and policy implications, Review of issues pertinent to the subsidiary structure of the Commission, including the work of the regional institutions: trade and investment, Seventy-first session, Economic and Social Council.
[22] Edwards, S. 1998. Openness, Productivity and Growth: What do we Really Know? Economic Journal, 18: 383-398.
[23] Ercakar, M E. 2011. Growth, Foreign Direct Investment, Trade and Inflation: An Empirical Application on Turkey. Middle East. Finance Econ, 9: 137–147.
[24] Food and Agricultural Organization (FAO). 1996. Rome Declaration on World Food Security and World Food Summit Plan of Action. World Food Summit 13-17 November 1996. Rome.
[25] Food and Agricultural Organization (FAO). 2009. The State of Food Insecurity in the World 2009: Economic Crisis – Impacts and Lessons Learned. Rome: FAO.
[26] Food and Agricultural Organization FAO. 2003. Regional Integration and Food Security in Developing Countries. Agricultural Policy Support Service Policy Assistance Division. FAO. Rome, Italy.
[27] Frankel, J. and Romer, D. 1999. Does Trade Cause Growth? American Economic Review, 89 (3): 379-399.
[28] Glaeser, E, R. La Porta, F. Lopez-de-Silanes, and Shleifer, A. 2004. Explaining Growth: Institutions, Human Capital, and Leaders. Brookings Papers on Economic Activity.
[29] Grant, J.H. and Lambert, D.M. 2005. Regionalism in world agricultural trade: Lessons from gravity model estimation. In Proceeding of the American Agricultural Economics Association Annual Meeting, July. pp. 24–27.
[30] Greenaway, D., Morgan, W., and Peter, W. 1998. Trade Reform, Adjustment and Growth: What does the Evidence Tell Us, The Economic Journal, 108: 1547- 1561.
[31] Grossman, G.M. and Helpman, E. 1992. Innovation and Growth: Technological Competition in the Global Economy, Cambridge, MIT Press, Boston.
[32] Harrison, A. 1996. Openness and Growth, A Time-series, Cross-Country Analysis for Developing Countries, Journal of Development Economics, 48(2): 419-447.
[33] Herath, H.M.S.P. 2010. Impact of Trade Liberalization on Economic Growth of Sri Lanka: An Econometric Investigation. Proceedings of the 01st Internal Research Conference on Business and Information.
[34] Herath, H.M.S.P., Cao, L., and Chen, Y. 2014. Impacts of Regional Trade Agreements on Food Security: A case of ASEAN Free Trade Agreement. International Journal of Social Sciences & Interdisciplinary Research, 3: 147-157.
[35] Hubert, E. and Satoshi, I. 2016. The Evolution of Industrial Networks in East Asia: Stylized Facts and Role of Trade Facilitation Policies, In: Production Networks and Enterprises in East Asia: Industry and Firm-level Analysis, 2016, pp. 113-138-Chapitre5, Springer Japan, 2016.
[36] IFPRI. 2006. How Much Will Trade Liberalization Help the Poor? Comparing Global Trade Models, Research Brief.
[37] Ivica, P. 2016. Global Food Security and Development Aid. Francis and Taylor.
[38] Jafari, S A., Ghaderi, S., Hosseinzadeh, R. and Nademi, Y. 2012. Openness and Inflation: New Empirical Panel Data Evidence. Economics Letters, 117: 573–577.
[39] Jaud, M., and Kukenova, M. 2011. Financial Development and Survival of African Agri-Food Exports. Policy Research Working Paper Series 5649. Washington, DC, The World Bank.
[40] Jin, C. and Jang. 2004. On the Relationship between Openness and Growth in China: Evidence from Provincial Time Series Data, The World Economy, 27(10): 1571-82.
[41] Kakwani, N. and Hyun, H. Son. 2016. Measuring Food Insecurity: Global Estimates, no 370, Working Papers from ECINEQ, Society for the Study of Economic Inequality.
[42] Keho, Y. 2017. The Impact of Trade Openness on Economic Growth: The Case of Cote d’Ivoire, Cogent Economics & Finance. 5(1): 1332820: 1-14. DOI: https://doi.org/10.1080/23322039.2017.1332820
[43] Klasra, M A. 2011. Foreign Direct Investment, Trade Openness and Economic Growth in Pakistan and Turkey: An Investigation Using Bounds Test. Quality and Quantity, 45: 223-231.
[44] Korinek, J. and Melatos, M. 2009. Trade Impacts of Selected Regional Trade Agreements in Agriculture, OECD, Trade Directorate.
[45] Kremer, S., Bick, A., and Nautz, D. 2009. Inflation and Growth: New Evidence from a Dynamic Panel Threshold analysis, SFB 649 discussion paper, No. 2009,036, SFB 649, Economic Risk, Berlin
[46] Leamer, E. 1988. Measures of Openness, Chicago: Chicago University Press.
[47] Levine, R. and Renelt, D. 1991. Cross-Country Studies of Growth and Policy, Methodological, Conceptual and Statistical Problems, World Bank Working Papers Series, n°608.
[48] Lucas, Jr., and Robert E. 1988. On the Mechanics of Economic Development. Journal of Monetary Economics 22(1):3-42.
[49] Maddison, A. 2007. Contours of the World economy, 1-2030 AD. Essays in Macro-Economic History, Oxford University Press, p. 379.
[50] Maertens, M., and Swinnen, J. 2015. Agricultural Trade and Development: A Value Chain Perspective. WTO Working Paper ERSD-2015-04. Geneva, Switzerland, World Trade Organization.
[51] Maertens, M., Colen, L. and Swinnen, J. 2011. Globalization and Poverty in Senegal: A Worst-Case Scenario? European Review of Agricultural Economics, 38 (1): 31–54.
[52] Mano, Y., Yamano, T., Suzuki, A. and Matsumoto, T. 2011. Local and Personal Networks in Employment and the Development of Labour Markets: Evidence from the Cut Flower Industry in Ethiopia. World Development, 39(10): 1760–1770.
[53] Maxwell, S. 2001. The Evolution of Thinking about Food Security. In Food Security in Sub-Saharan Africa, edited by S. Devereux and S. Maxwell, 12-25/. London: ITDG press.
[54] McCorriston, S. et al. 2013. What is the Evidence of the Impact of Agricultural Trade Liberalization on Food Security in Developing Countries? A Systematic Review, London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.
[55] Minten, B., Randrianarison, L. and Swinnen, J. 2009. Global Retail Chains and Poor Farmers: Evidence from Madagascar. World Development, 37(11): 1728–1741.
[56] Ndulu, B. J., and O’Connell, S. A. 2006a. Policy plus: African Growth Performance 1960–2000. Draft Chapter 1 of the Synthesis Volume of the African Economic Research Consortium’s Explaining African Economic Growth project.
[57] Ndulu, B. J., Lopamudra, C, Lebohang, L, Vijaya, R, and Jerome, W. 2007. Challenges of African Growth: Opportunities, Constraints and Strategic Directions, Washington, D.C., World Bank.
[58] Negash, M. and Swinnen, J. 2013. Biofuels and Food Security: Micro-Evidence from Ethiopia. Energy Policy 63: 963–96.
[59] Nin-Pratt, A., Diao, X. and Bahta, Y. 2008. Assessing Potential Welfare Impacts on Agriculture of a Regional Free Trade Agreement in Southern Africa, ReSAKSS Working Paper, 15.
[60] Njoroge L. K. 2010. The Impact of Regional Integration on Economic Growth: Empirical Evidence from COMESA, EAC and SADC trade blocs, American Journal of Social and Management Sciences, 1(2): 150-163
[61] Noguer, M. and Siscart, M. 2005. Trade Raises Income: A Precise and Robust Result, Journal of International Economics, 65(2): 447-460.
[62] Rodriguez, F. and Rodrik, D. 2000. Trade Policy and Economic Growth: A Skeptic’s guide to the Cross-National Evidence, in B. Bernanke and K. Rogoff, Macroeconomics Annual 2000, MIT Press, Boston.
[63] Sachs, JD. and Warner, A. 1995. Economic Reform of Global Integration, Brookings Papers on Economic Activities, 1: 1-118.
[64] Seck, A., Lassana C., Kossi, M. and Jonathan, H. 2010. How Important Are Non-Tariff Barriers to Agricultural Trade within ECOWAS? Working Papers 2010-3, Suffolk University, Department of Economics.
[65] Sen, A. 1981. Ingredients of Famine Analysis: Availability and Entitlements. The Quarterly Journal of Economics 93(3): 433-464.
[66] Solow, R. 1956. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, 70 (1): 65-74.
[67] Svatoš, M., and Smutka, L. 2010. Development of Agricultural Foreign Trade in the Countries of Central Europe. Agricultural Economics - Czech, 56: 163 -175.
[68] Thomas, H., and Morrison, J. 2006. Trade Related Reforms and Food Security: A Synthesis of Case Study Findings, in Thomas, H., ed., Trade Reforms and Food Security, Rome: FAO, 1-116.
[69] Timmer, P. 2005. Food Security and Economic Growth: An Asian perspective, Asia pacific economic literature. 19: 1-17.
[70] United Nations Conference on Trade and Development. 2016. Key Statistics and Trends in International Trade, Division on International Trade in Goods and Services, and Commodities.
[71] Walz, U. 1997. Dynamic Effects of Economic Integration: A Survey. Open Economies Review, 8(3): 309- 326.
[72] World Bank. 2005. Making Finance Work for Africa. World Bank Unpublished Manuscript. Washington, DC.
[73] Xiang, T., Huang, J., Kancs, D., Rozelle, S. and Swinnen, J. 2012. Food Standards and Welfare: General Equilibrium Effects. Journal of Agricultural Economics, 63(2): 223–244.
[74] Zahonogo, P. 2017. Trade and Economic Growth in Developing Countries: Evidence from Sub-Saharan Africa, Journal of African Trade, http://dx.doi.org/10.1016/j.joat.2017.02.001
Published
2018-09-05
How to Cite
TINTA, Almame Abdoulganiour et al. ASSESSING THE IMPACT OF INTEGRATION ON ECONOMIC GROWTH AND FOOD SECURITY IN ECOWAS. Theoretical and Practical Research in the Economic Fields, [S.l.], v. 9, n. 1, p. 32-44, sep. 2018. ISSN 2068-7710. Available at: <https://journals.aserspublishing.eu/tpref/article/view/2233>. Date accessed: 21 mar. 2019.