INSTITUTIONS AND ECONOMIC GROWTH IN ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)

Abstract

This study employed panel data estimation techniques to investigate the effect of institution on economic growth in 15 ECOWAS countries from 2000 to 2022. The study used the Levin, Lin, and Chu tests and the Im, Pesaran, and Shin tests to confirm the stationarity of the variables, where RGDP per capita is integrated of order I(1) and other institutional variables such as control of corruption, rule of law, government effectiveness, political stability, regulatory quality, voice, and accountability were integrated into order I(0). The study also used the Johansen Fisher co-integration test, which shows co-integration of the variables, and the Hausman test, which was carried out and suggested the use of a fixed effect model to be convenient for estimation. The results of the findings revealed that control of corruption and regulatory quality are insignificant to economic growth in West Africa, while rule of law, voice, and accountability have a positive and significant relationship, and political stability and government effectiveness have a negative and significant relationship to economic growth in West Africa. The study concluded and recommended that good institutions in West Africa will improve economic growth, with more emphasis on political stability and government effectiveness.