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4 Methodology and Empirics

Econometric techniques can be utilized to examine the relationship between growth and selected indices of economic development. However, the big challenge is the availability of relevant data on a consistent basis for 15 countries. For example, there is no data on completion rates for primary, secondary and tertiary levels of education; enrolment rates though useful would not capture to some extent the quality of education. There is no consistent data on incidence of poverty, access to water, sanitation and rates of unemployment on a consistent basis. Based on the theoretical review, we postulate the following broad relationship:

(8)

Where:

Y = growth rate of GDP

h =ideas and innovations

Ls = acquiring skills and learning by doing Ps ¼ primary school completion rate

Pr = secondary school completion rate G ¼ public sector strategies and policies A ¼ adult literacy rates

T = technology

Xi = control variables such as rate of inflation, public investment in GDP, access to drinking water, access to sanitation, shelter etc.

It is expected that an increase in any of the independent variables would stimulate growth. The variables on the right-hand side are proxies for capturing concrete economic development. The availability of data would necessitate the discussion on the appropriate econometric technique to be utilized[1]. Because of the paucity of data, we examine some of the available empirics.

Table 6 provides selected social indicators for some of the countries in the sub-region. The growth of public spending on education as a ratio of government expenditure partially confirms that none of the countries met the United Nations threshold on public spending on education. The Gambia, Ghana and Togo are close to the threshold of 26 %; the quality of public education which is important is not captured in the data. Most of the countries registered improvement in primary and secondary school enrolment but no data on how many actually completed school. The adult literacy rates reflect the need to stress education; for the 2012, only Cape Verde showed impressive adult literacy rates. The selected countries improved slightly on life expectancy at birth as well as infant mortality rates for the period 2005–2013 (see Table 7).

In a previous work (Ekpo 2014) we had estimated and obtained the following result on the relationship between growth on GDP per capita (y) and democracy, inflation as well as public investment in GDP:

(9)

R2 = 0.80; adjusted R2 = 0.71; DW= 1.92

t scores are in parenthesis, P = rate of inflation;

Inv = public investment in GDP; Significant at 5 %

From the above, inflation and public sector investment are positively related to the growth of income per capita. Democracy has a positive impact on development and is statistically significant. Public Investment represents government in the model.

The stylized facts on selected social indicators and the dearth of data could not

confirm whether growth in the sub-region has resulted in economic development. There is some evidence of marginal improvements in life expectancy at birth, primary and secondary school enrolment. Consequently, whether growth without development in West Africa is a paradox cannot be properly addressed without robust analysis based on consistent and relevant economic and social indices.

However, we attempt a panel regression for 15 countries in West Africa for the period 2005–2011. The estimated results are as follows:

Table 6 West Africa: education indices, 2000–2013

Country

Gross primary school enrolment ratio

Gross secondary school enrolment ratio

Adult literacy rates

2000

2005

2012

2013

2000

2005

2012

2013

2000

2005

2012

2013

Benin

81.2

98.5

118.6

21.6

34.6

47.7

42.4

Burkina Faso

45.0

58.3

82.2

10.4

14.3

23.8

23.6

Cabo Verde

122.8

114.2

111.5

67.2

72.2

90.4

84.3

Cote d'Ivoire

77.3

90.0

56.2

Gambia

90.5

90.8

82.5

57.5

36.8

50.0

Ghana

86.0

90.4

106.7

108.8

36.9

42.9

54.0

58.2

57.9

67.3

Guinea

57.5

80.1

89.3

19.4

29.4

41.0

Guinea Bissau

76.0

114.0

116.2

17.9

32.4

41.4

54.2

Liberia

112.7

102.4

35.2

45.2

60.8

Mali

62.2

80.1

85.7

18.5

27.6

36.9

43.4

Niger

33.6

50.0

68.9

7.0

10.1

14.7

28.7

Nigeria

98.4

100.9

84.8

24.5

34.7

43.8

61.3

Senegal

68.1

80.5

83.5

15.9

22.6

41.0

Sierra Leone

68.7

128.1

42.1

Togo

112.8

113.3

129.5

32.1

45.0

54.9

53.2

Source: ADB, Tunis

Table 7 West Africa social indicators 1990–2013

Country

Public expenditure on education (% total expenditure)

Life expectancy at birth

Infant mortality rates (per 1,000)

2001–

2010

1990

2009–

2010

2012

2013

2000

2005

2012

2013

Benin

59.2

59.3

87.1

77.7

69.0

68.1

Burkina Faso

55.9

56.3

95.2

85.3

70.9

68.9

Cabo Verde

14.4

74.8

75.1

31.8

24.6

17.5

16.8

Cote d'Ivoire

20.8

50.2

54.7

50.4

50.7

46.4

47.2

50.4

50.9

Gambia

22.8

55.2

58.2

58.6

58.8

67.1

62.6

55.9

54.9

Ghana

24.4

58.4

63.8

61.0

61.1

63.9

58.0

51.4

50.7

Guinea

48.1

53.6

55.9

56.1

103.3

87.4

73.9

72.7

Guinea Bissau

54.1

54.3

111.5

105.1

94.8

93.2

Liberia

46.0

56.1

60.2

60.6

112.8

82.7

61.4

59.8

Mali

54.6

55.0

113.5

104.9

88.3

85.8

Niger

57.9

58.4

91.7

71.9

54.2

52.5

Senegal

55.7

59.0

63.3

63.5

65.0

57.5

49.6

48.8

Sierra Leone

39.7

47.4

45.3

45.6

144.4

133.4

117.7

115.7

Togo

23.2

54.8

56.6

50.2

56.5

78.8

76.4

67.5

65.8

Source: ADB, Tunis

(10)

R2 = 0.58; t scores are in parenthesis; *significant at 1 %; **significant at 5 %; Number of observations = 77.

Where:

Y = income per capita as a proxy for economic development;

Inv = public investment as a proxy for government;

Dem = democracy;

SW = lack of access to sanitation and water;

SN = lack of access to sanitation.

It is interesting to state that relevant statistics such as adult literacy rates, completion rates for primary and secondary schools as well as poverty incidence were not available for all countries on a consistent basis. The results in Eq. (10) show that public investment and democracy are positively related to economic development while the lack of access to sanitation and water indicate a negative relationship and it is statistically significant. An increase in the lack of access to water and sanitation would reduce income per capita which is used here as a proxy for development. The lack of access to sanitation alone has a relationship that is difficult to interpret. Though democracy and public investment have the expected signs, they are statistically not significant. The panel regression results must be read with the stylized facts to have a better perspective of the growth-development nexus in the West African sub-region.

  • [1] Attempts on examining precise relationships between the growth and the independent variables through regression did not yield meaningful results. However, some of the results are discussed below
 
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