Web Appendix of CAPE VERDE AND MOZAMBIQUE AS DEVELOPMENT
SUCCESSES IN WEST AND SOUTHERN AFRICA
Jorge Braga de Macedo and Luís Brites Pereira1
Abstract: This paper applies an interpretation of how globalization and governance (G&G) interact with
convergence given Cape Verde and Mozambique’s particular geographical and historical contexts. We hold
that development success under globalization entails, necessarily but not exclusively, positive market
perceptions regarding the orientation and predictability of policies as well as the accompanying
institutional arrangements. As such, a positive G&G interaction with respect to a comparator group can
usefully be defined as success notwithstanding the inexistence of a universally applicable development
model. In practical terms, we first identify macro-level policy and institutional combinations underpinning
successful trade diversification (an indicator of globalization) and income convergence (an indicator of
governance) in the sub-regions of West and Southern Africa. We then assess to what extent these
combinations apply to both countries using an empirical analysis. We find that trade openness drives
convergence and export diversification in Western Africa (which is becoming more diversified) while
convergence is instead driven by economic and political freedoms in Southern Africa (which is becoming
more specialized). Our empirical analysis is complemented by a case-study narrative of Cape Verde and
Mozambique’s long-term development, which allows us to also identify the following common drivers:
moving towards a market economy; opening up to regional and global trade; increasing economic and
political freedom; pursing macroeconomic stability and financial reputation; ensuring policy continuity
(especially in the industrial and trade sectors) and focusing on human development (especially education
and poverty reduction). Moreover, both countries reveal convergence compared to their sub-regional peers
when looking at average GDP per capita and indicators of financial reputation and good governance.
While these findings are insufficient to conclude that convergence will be sustained, the positive interaction
between trade and financial globalization, on the one hand, and good governance and democracy, on the
other, may help explain the observed diversity of the Portuguese-speaking African community, which
includes three other countries (Angola, Guinea-Bissau and São Tomé e Príncipe).
Outline: Interpreting how globalization and governance interact with convergence; History and
Geography; Analyzing the “economic convergence-trade diversification” relationship; Comparing
Cape Verde and Mozambique.
JEL Classification: F12; F13; F15; O11
Keywords: Export diversification, Convergence, Governance, Africa, Cape Verde, Mozambique,
Portuguese-speaking African Countries (PALOP)
Contacts:
Address:
Center for Globalization & Governance (CG&G)
Faculdade de Economia, Universidade Nova de Lisboa - Campus de Campolide
1099-032 Lisboa - Portugal
E-mails
jbmacedo@fe.unl.pt; lpereira@fe.unl.pt
Phone/Fax: (+351) 21 380 1600 / (+351) 21 388 6073
Website:
http://cgg.fe.unl.pt
1
We gratefully acknowledge support from the NBER Africa Project, without which our research would not have
been possible. Earlier versions of this paper were presented at the 1 st research conference in Cambridge, Wits
Business School, Banco de Moçambique and Banco de Cabo Verde. We are thankful for comments and
suggestions from participants and others, especially Sebastian Edwards, Jeff Frankel, Ernesto Gouveia Gove,
John Luiz, Léonce Ndikumana, Joaquim Oliveira Martins, Francisco Queiró, Courtenay Sprague, José Tavares,
Philip Havik and Augusto Nascimento. We also thank Manuel Cabral for presenting the first version at the preconference and OECD and João Farinha, José Mário Lopes, Fábio Santos, João Silva, Manuel Melo and Rita
Borges for research assistance at CG&G. The usual disclaimer applies. The views expressed herein are those of
the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
1
List of Tables
Table 3.1: Statistical capacity index
Table 3.2: Relative sizes in 2003
Table 3.3: Diversification Index in PALOP
Table 3.4: Economic Freedom Index in PALOP
Table 3.5: Corruption Perception Index in PALOP
Table 3.6: Annual change in number equivalent Herfindahl Index (Cape Verde vs. ECOWAS,
Mozambique vs SADC)
Table 3.7: World Governance Indicators Comparison: CV/ECOWAS, MOZ/ SADC
Table 4.1a: Diversification & Convergence in ECOWAS – Summary of 3SLS Estimation Results
Table 4.1b: Diversification & Convergence in SADC - Summary of 3SLS Estimation Results
Table 5.1: Nominal and Real Effective Exchange Rates based on Consumer Prices Cape Verde and
Mozambique
Table 5.2: MDG in PALOP
Table 5.3: Millennium Development Goals Comparison: CV/ECOWAS, MOZ/SADC
Table 5.4, 1 through 5: World Bank Enterprise Survey: CV/ECOWAS, MOZ/SADC, PALOP/SSA
2
List of Figures
Figure 3.1: GDP per capita 1990 international $ PALOP vs. SSA
Figure 3.2a: GDP per capita 1990 international K$ Cape Verde and ECOWAS
Figure 3.2b: GDP per capita 1990 international K$ Mozambique and SADC
Figure 3.3 Political (thick) and Economic (thin) Governance index in Mozambique
Figure 4.1a (panels 1, 2, 3): Relation between Income Gap & Number Equivalent in Cape Verde
and ECOWAS:
Figure 4.1b (panels 1, 2, 3): Relation between Income Gap & Number Equivalent in Mozambique
and SADC
Figure 4.2a (panels 1, 2): Relation between Income Gap and Number Equivalent in ECOWAS
(country means)
Figure 4.2b (panels 1, 2): Relation between Income Gap and Number Equivalent in SADC
(country means)
Figure 4.2b (panels 3, 4): Relation between Income Gap and Number Equivalent in SADCexcluding South Africa (country means)
Figure 4.3a, b (panels 1, 2, 3): Relation between Income Gap and Government Deficit in
ECOWAS & SADC (country and time means)
Figure 4.4a, b (panels 1, 2, 3): Relation between Economic and Political Freedoms in ECOWAS &
SADC (by regime)
Figure 5.1a, b Conditional volatility of exchange market pressure Cape Verde and ECOWAS,
Mozambique and SADC
Figure 5.2a, b Conditional mean of exchange market pressure Cape Verde and ECOWAS,
Mozambique and SADC
3
Appendix 1
Data description
Table A1.1 Summary statistics
Table A1.2 Correlations
Figure A1a, b, 1 through 8: Description of ECOWAS and SADC
1 Income Gap to Frontier, Country and U.S. GDP per capita, constant 2000 USD;
2 Number Equivalent Index at 1,2,3,4,5 digit SITC;
3 Inflation in consumer prices;
4 Government Surplus/Deficit % GDP;
5 Degree of openness, Exports plus Import % GDP;
6 Political Freedom;
7 Economic Freedom;
8 Life expectancy at birth.
Appendix 2
Figure A2.1a, b (panels 1 GDP growth, 2 and 7 as above): Comparison of High and Low Regimes
in ECOWAS, SADC.
Tables A2.2a, b: Determinants of Diversification in ECOWAS, SADC OLS and 2SLS
Tables A2.3a, b: Determinants of Convergence in ECOWAS, SADC OLS and 2SLS
4
TABLES
Table 3.1: Statistics capacity index
Angola
34
Cape Verde
63
Egypt
83
Ethiopia
78
Guinea Bissau
39
Mauritius
74
Mozambique
62
Sao Tome e Principe 55
South Africa
78
Tunisia
71
Source: AEO (2010, p. 47)
Table 3.2: Relative sizes in 2003
GDP
CPV/ECOW 0,3%
ECOW/SSA 32%
MOZ/SADC 9%
SADC/SSA
41%
SSA/AFR
64%
AFR/WORLD 3%
CPLP/WORLD 3%
PALOP/CPLP 4%
POP
0,2%
31%
11%
25%
86%
14%
4%
14%
YCAP
168%
105%
88%
166%
74%
24%
82%
25%
Source: Maddison database
Table 3.3: Diversification index in PALOP
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 AVG
ANG 1
1
1
1
1
1
1
1
1
1
1
1
1
CV
15
10
6
8
9
6
15
14
9
11
15
6
10
GB
2
4
3
2
2
3
2
2
1
2
1
1
2
MZ
7
8
8
9
7
4
3
3
3
3
4
6
5
STP
3
3
5
4
7
3
3
6
4
5
5
2
4
Source: from 2004 AEO (2010); latest from previous issues
5
Table 3.4: Economic Freedom Index in PALOP
CV
MZ
A
GB
2010
62
56
48
44
2009
61
56
47
45
2008
58
57
47
45
2007
57
56
45
45
2006
59
53
44
47
2005
58
56
47
2004
58
57
42
2003
56
59
43
Source: AEO (2010, p.75, from Heritage Foundation)
Table 3.5: Corruption Perception Index in PALOP
RANKINDEXRANKINDEXRANKINDEX
INDEX
2009 2009
2008 2008
2007 2007
YEAR
CV 46
5,1
47
5,5
53
4,7
STP 111
2,8
121
2,7
118
2,7
M
130
2,5
126
2,6
111
2,8
2003 2,7
GB 162 1,9
158
1,9
143
2,3
A
192
1,9
158
1,9
147
2,2
2002 1,7
Source: AEO from Transparency International (2010, pp. 73, 274-275), previous issues
Table 3.6. Annual change in number equivalent Herfindahl Index
Cape Verde vs. ECOWAS, Mozambique vs SADC
ECOWAS
19611965
19661970
19711975
19761980
19811985
19861990
19911995
19962000
20012005
19762005
0,11
-0,02
-0,02
0,05
0,04
-0,01
-0,12
0,21
-0,03
0,02
0,77
0,48
-0,47
0,19
0,27
-0,16
0,18
0,29
-0,11
0,04
0,02
-0,05
-0,01
-0,1
-0,05
-0,48
-0,07
Cape Verde
SADC
-0,87
-0,32
Mozambique
0,75
0,1
-0,04
0,14
0,21
-0,17
-0,34
-0,62
Source: calculated from Cabral and Veiga (2010, graphs 7-8)
Table 3.7: World Bank Governance Indicators (1996-2007)
CV
ECOWAS MOZ SADC
Rule of Law
-0.75
-0.74 -0.44
0.48
Voice and Accountability
-0.51
0.65
-0.08 -0.30
Political Stability, Absence of Violence/Terrorism
-0.49
0.96
0.05 -0.24
Government Effectiveness
-0.77
0.11
-0.33 -0.38
Regulatory Quality
-0.65
-0.47 -0.45
-0.25
Control of Corruption
-0.66
-0.65 -0.39
0.33
Source: updated from IICT (2007), same as Lopes and Santos (2010, tables 1a, b);
note data are fitted to a normal distribution centered on zero
6
Table 4.1a. ECOWAS – 3SLS Estimation Results
Variable Type
Policy
Variable
LOW-Regime Sub-sample
lnygap
lnneq5
lnygap
lnneq5
inflation1
govdef
FULL Sample
lnygap
lnneq5
-0.569***
(-3.326)
-0.0972
(-1.139)
-0.0344**
(-2.491)
0.000174
(0.0435)
0.0530*
(1.799)
0.0457***
(4.744)
-0.398***
(-3.812)
0.189**
(2.409)
-0.0368***
(-3.400)
lnprcl
lnef
demage
-0.0147
(-0.339)
0.114
(1.487)
-0.0319***
(-3.498)
-0.157
(-1.646)
0.399*
(1.888)
demtot
dictrans
Control
lnk
-0.172***
(-2.723)
-0.497***
(-2.606)
-0.0312***
(-2.963)
0.00804***
(11.12)
0.0620
(0.579)
0.840***
(2.710)
-0.0444*
(-1.879)
-0.107***
(-4.441)
0.961***
(4.396)
capcont
0.666***
(5.132)
0.345***
(7.128)
oil
cpv
sen
legaleng
Constant
Model Diagnostics
Observations
R-squared
F test
Prob > F
-0.0153**
(-2.291)
-0.229**
(-2.156)
0.299**
(2.157)
1.610***
(2.923)
-0.0879***
(-3.290)
lnpopdens
landlock
-0.00618
(-1.407)
-0.185**
(-2.112)
-0.0477
(-0.395)
0.201
(0.456)
-0.179**
(-2.459)
lnltotal
Dummies
-0.751***
(-4.000)
-0.646***
(-3.798)
lnopen1
Institutional
HIGH-Regime Sub-sample
lnygap
lnneq5
6.254***
(14.00)
2.790***
(3.268)
0.322***
(4.163)
-0.427***
(-7.158)
-0.299***
(-3.267)
-0.370***
(-6.040)
-0.108**
(-2.347)
5.469***
(11.34)
0.191***
(3.293)
0.552***
(3.193)
0.322***
(4.163)
-0.427***
(-7.158)
0.438**
(2.346)
0.504***
(4.982)
0.904
(1.426)
40
40
99
99
0.860
0.703
0.876
0.604
30.87
13.95
62.61
18.63
0
0
0
0
t-statistics in parentheses *** p<0.01, ** p<0.05, * p<0.1
-3.601***
(-4.657)
-2.827***
(-3.871)
-2.418***
(-4.918)
-5.875**
(-2.359)
0.473***
(6.759)
32
0.866
44.60
0
32
0.688
14.27
0
2.334*
(1.828)
7
Table 4.1b. SADC – 3SLS Estimation Results
Variable Type
Variable
LOW-Regime Sub-sample
lnygap
lnneq5
lnygap
lnneq5
Policy
inflation1
1.340***
(6.654)
0.617***
(6.624)
0.0533***
(2.662)
Institutional
lnprcl
lnef
demtot
Control
0.779***
(6.829)
-0.812***
(-10.64)
-1.171***
(-6.261)
-1.160***
(-7.293)
1.070***
(5.112)
1.751***
(6.795)
0.121***
(5.235)
0.0127***
(8.015)
-0.169***
(-4.294)
-0.0160***
(-3.998)
lnk
-0.0399***
(-6.492)
-0.276
(-1.622)
-0.147**
(-2.458)
0.766***
(4.175)
-0.412***
(-9.979)
0.379***
(6.551)
0.152*
(1.806)
-0.833***
(-5.429)
-0.728***
(-4.403)
lnltotal
Dummies
landlock
mus
moz
legaleng
Constant
Model Diagnostics
Observations
R-squared
F test
Prob > F
1.856***
(3.672)
-1.067***
(-6.012)
-0.659***
(-5.961)
-0.0765**
(-2.532)
constage
demage
HIGH-Regime Sub-sample
lnygap
lnneq5
-0.782***
(-9.407)
-0.276**
(-2.571)
govdef
lnopen1
FULL Sample
lnygap
lnneq5
-2.137**
(-2.285)
6.939***
(5.027)
-0.0517***
(-4.202)
-0.691***
(-2.813)
-0.182**
(-1.969)
1.526***
(6.154)
0.00610**
(2.537)
-0.0179*
(-1.686)
0.0259
(1.322)
0.0649***
(2.836)
-0.396***
(-4.609)
-2.386***
(-6.059)
-0.323**
(-2.028)
-2.306***
(-2.991)
-0.972***
(-4.263)
-1.578***
(-9.644)
9.409***
(12.76)
10.55***
(5.822)
51
0.847
76.55
0
51
0.745
38.08
0
0.419***
(4.502)
0.859***
(4.352)
-1.313***
(-4.507)
-0.750***
(-3.485)
-1.130
(-0.488)
39
39
156
156
0.850
0.645
0.893
0.530
48.47
19.68
150.1
30.28
0
0
0
0
t-statistics in parentheses *** p<0.01, ** p<0.05, * p<0.1
8
Table 5.1 Nominal and Real Effective Exchange Rates based on Consumer Prices
CVP
NEX
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
85
86
83
94
96
95
100
107
112
115
124
125
122
112
106
106
106
101
98
100
91
91
CVP R MOZ
MOZ R
CPI
NEX
CPI
100
8
70
95
13
84
93
23
107
103
33
114
104
52
113
98
81
117
100
100
100
100
97
92
102
99
94
102
104
97
116
115
99
117
154
124
114
181
127
105
199
126
104
198
114
107
202
112
104
224
112
97
238
113
91
232
103
91
244
105
81
243
96
80
243
94
9
Table 5. 2: MDGs in PALOP before and after crisis
#
Indic
A
CV
GB
M
STP
1
pov
S
A
R
S
R
2
schl
R
R
S
C
A
3
rat
S
A
S
S
A
4
<5m
R
A
R
S
S
5
mm
R
A
R
S
R
6
dis
R
#% sat
2007
A
CV
GB
M
STP
#% sat
2009
A
CV
GB
M
STP
#% sat
2010
A
CV
GB
M
STP
#% sat
1
2
2
1
1
0
C
C
C
R
R
7
wat
C
A
A
S
A
4
# sat
1
5
1
1
3
31%
1
3
0
1
4
26%
C
C
C
C
3
2
1
2
0
1
0
R
R
S
S
R
S
A
A
C
R
S
A
A
C
S
S
S
S
S
S
S
A
S
S
R
R
S
C
A
S
0
3
3
0
1
0
2
0
4
3
2
0
26%
S
A
R
S
R
1
S
R
S
C
A
2
R
S
S
S
A
1
S
A
S
C
S
2
R
S
R
A
R
1
S
S
S
R
S
A
S
S
C
2
0
3
0
3
3
26%
C
C
S
S
0
Source: 1st Panel Macedo et al (2007); others AEO of year indicated
Note: A achieved/early achiever; C on course/on track; S slow progress/off track;
R regress satisfactory=A+C
10
Table 5.3: Millennium Development Goals
1 Share of poorest quintile in national consumption (%)
Cape Verde
4.4
1990-2003
ECOWAS
5.3
Mozambique
5.5
1991-2004
SADC
5.0
2 Net enrolment ratio in primary education
1991-2006 1991-1999 2000-2006 90's-00's
Cape Verde
942
953
938
-1,5%
ECOWAS*
575
508
602
9,5%
Mozambique
614
470
663
19,3%
SADC**
808
720
835
11,5%
* except Sierra Leone
**excluding Angola and DR Congo due to insufficient data
3 Ratio of girls to boys in primary education
Cape Verde
95
95
96
0,6%
ECOWAS
80
75
81
7,8%
Mozambique
79
74
81
9,0%
SADC
91
92
91
-1,4%
4 Children under five mortality rate per 1,000 live births
1990
1995
2000
2005
2006
Cape Verde
60
50
42
35
34
ECOWAS
213
207
190
181
179
90's
00's
90's-00's
Mozambique
224
154
-7,0%
SADC
155
143
-1,2%
5 Maternal mortality ratio per 100,000 live births 2005
Cape Verde
210
ECOWAS
1027
Mozambique
520
SADC
819
6 Tuberculosis incidence rate per year per 100,000 population
90's
00's
90's-00's
Cape Verde
1642
1672
0,0%
ECOWAS
2076
2817
0,7%
Mozambique
2854
4330
1,5%
SADC
3066
4708
1,6%
7 Proportion of population using an improved drinking water source
Cape Verde
79
80
1,0%
ECOWAS
52
57
4,2%
1995
2000
2006
Mozambique
39
41
42
SADC
57
60
63
8 Debt service as a %age of exports of goods and services
1990-1994 1995-1999 2000-2006
Cape Verde
136
118
82
ECOWAS
171
179
102
Mozambique
238
252
33
SADC*
132
121
71
*Except Zimbabwe, Zambia and DR Congo
Source: same as Table 3.7
11
Table 5.3: World Bank Enterprise Survey
1. International Trade (=5, best/worst)
country/ comparator CVMZSSASADECWLOPcode
Exporting Firms 4 6 13 16 11 5 %
Time Imports
11 11 11 10 10 17 Day
Import License Days 6 13 18 21 16 15 Day
Foreign Technology 2 33 11 16 8 12 %
Foreign Shareholder 10 20 19 25 12 14 %
2. Infrastructure (=5, best/worst)
country/ comparator CVMZSSASADECWLOP code
# Electricity Outages 21 3 14 12 16 10 #/mo
# Internet Outages 4 3 46 32 86 3 #/mo
# Water Outages 13 4 8 6
9 7 #/mo
Transportation 36 37 44 35 49 40 %bad
Access to Land 19 26 34 31 36 28 %bad
3. Finance, Competition, Education (best/worst)
country/ comparator CVMZSSASADECWLOP code
Credit Line
47 13 24 24 20 17 %good
Investment Own Funds 51 88 77 74 80 78 %good
Access to Finance 48 62 60 51 68 64 %bad
Number Competitors 4 3 4 4
4 4
#
Education Workers 43 33 34 37 28 32 %bad
4. Institutions - stability, corruption, rule of law (best/worst)
country/ comparator
CVMZSSASADECWLOP code
STAB Crime theft and disorder 47 50 41 49 35 45 %bad
CORR Corruption
25 37 46 43 48 42 %bad
CORR Informal Payments
0 2 5 3
5 2 %bad
JUST Sales on Credit
30 19 29 36 25 19 %bad
JUST Government Predictability 59 21 49 50 47 29 %good
JUST Court Impartiality
62 15 44 46 44 30 %good
JUST Legal conflict resolution 29 14 23 21 25 27 %bad
5. Quality of regulation (best/worst)
country/ comparator
CVMZSSASADECWLOP code
Time Senior Mgt Regulations 14 4 7 8
8 7 %bad
Tax administration
41 31 46 36 48 36 %bad
Tax rates
74 53 59 51 61 57 %bad
Licensing Permits
29 30 33 29 33 37 %bad
Labor Regulations
28 17 20 21 16 18 %bad
Customs & Trade Regulations 38 26 33 28 30 33 %bad
Source: World Bank Enterprise Survey, courtesy of Francisco Queiró
12
Figure 3.1 PALOP vs SSA - GDP per capita 1990 international K$
1.8
1.7
1.6
1.5
1.4
PALOP
1.3
SSA
1.2
1.1
1.0
0.9
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
0.8
Figure 3.2a Cape Verde and ECOWAS GDP per capita in international $
13
Figure 3.2b Mozambique and SADC GDP per capita in international $
Figure 3.3 Political (thick) and Economic (thin) Governance index in Mozambique
90
80
70
60
50
40
30
20
10
0
05
20 1
0
20 7
9
19 3
9
19 9
8
19 5
8
19 1
8
19 7
7
19 3
7
19 9
6
19 5
6
19 1
6
19 7
5
19 3
5
19 9
4
19 5
4
19 1
4
19 7
3
19 3
3
19 9
2
19 5
2
19 1
2
19 7
1
19 3
1
19 9
0
19 5
0
19 1
0
19
Source: Luiz, Pereira and Oliveira (2010)
14
Figure 4.1a: Cape Verde: Relation between Income Gap and Number Equivalent
CAPE VERDE
2
.94
4
.95
ygap
neq5
6
8
.96
10
12
.97
INCOME GAP TO FRONTIER & NUMBER EQUIVALENT
1960
1970
1980
year
ygap
1990
2000
neq5
CAPE VERDE vs. ECOWAS
.92
.94
.96
.98
INCOME GAP TO FRONTIER
1960
1970
1980
year
1990
ECOWAS
2000
CPV
CAPE VERDE vs. ECOWAS
2
4
6
8
10
12
NUMBER EQUIVALENT
1960
1970
1980
year
ECOWAS
1990
2000
CPV
15
Figure 4.1b: Mozambique: Relation between Income Gap and Number Equivalent
MOZAMBIQUE
neq5
0
.88
.9
5
.92
ygap
10
.94
15
.96
INCOME GAP TO FRONTIER & NUMBER EQUIVALENT
1960
1970
1980
year
1990
ygap
2000
neq5
MOZAMBIQUE vs. SADC
.88
.9
.92
.94
.96
INCOME GAP
1960
1970
1980
year
SADC
1990
2000
MOZ
MOZAMBIQUE vs. SADC
0
5
10
15
NUMBER EQUIVALENT
1960
1970
1980
year
SADC
1990
2000
MOZ
16
Figure 4.2a: Relation between Income Gap and Number Equivalent in ECOWAS
ECOWAS
1
INCOME GAP TO FRONTIER vs. NUMBER EQUIVALENT MEASURE
GNB
GNB
CPV
.85
.9
ygap
.95
NER
NER
NER
SLE
SLE
SLE TGO
GNB
LBR
SLE
SLE
LBR
NER
GNB
TGO
NER
TGO
SLE
NER
GNB
NER
SLE
NER
NER
GIN
NER
NER
GIN
NER
MLI
GIN
NER
GIN
GIN
GIN
MLI
GIN
MLI
TGO
GIN
TGO
GIN
GIN
SLE
GMB
NER
GIN
NER
GIN
TGO
GNB
GIN
GIN
GIN
GIN
GMB
TGO
GMB
TGO
NER
GIN
GIN
LBR
GNB
GIN
GIN
GNB
GIN
GIN
GIN
GIN
BFA BFA
GIN
TGO
GIN
NER
GIN
NER
GIN
BFA
GIN
GIN
TGO
GIN
TGO
GIN
GIN
GIN
MLI
GIN
GIN
CPV
GIN
CIV
MLI
NER
NER
MLI
MLI
CPV
MLI
MLI
MLI
MLI
MLI
CIV
GIN
TGO
MLI
GIN
NER
GIN
MLI
BFA
MLI
BFA
LBR
LBR
BFA
MLI
MLI
BFA
MLI
MLI
CPV
GMB
BFA
SLE
LBR
GMB
GMB
BFA
CIV
BFA
BFA
BFA
MLI
MLI
TGO
BFA
LBR
BFA
BFA
BFA
NGA
GMB
GMB
TGO
MLI
NGA
MLI
MLI
GNB
GMB
GMB
BFA
GNB
GNB
GNB
BFA
GNB
BFA
LBR
BEN
GIN
GNB
NGA
GIN
BFA
GNB
BFA
BFA
BFA
BFA
MLI
TGO
MLI
GNB
GNB
BFA
TGO
LBR
MLI
BFA
GNB
GHA
BEN
BFA
TGO
LBR
SLE
BFA
LBR
SLE
MLI
GMB
GHA
GMB
GHA
BEN
MLI
SLE
LBR
GMB
GMB
GMB
TGO
LBR
GMB
GMB
GMB
GMB
LBR
GMB
BFA
TGO
LBR
SEN
MLI
MLI
LBR
TGO
SEN GNB
MLI
NER
GNB
BFA
GNB
MLI
GNB SEN
LBR
CPV
NER
MLI
MLI
TGO
GNB
NGA
MLI
MLI
CIV
NGA
MLI
SLE
LBR CPV
NGA
NER
CPV
MLI
NER
NER
CIV
NER
LBR
NER
GMB
CPV
LBR
NGANER
NGA
NER
SLE
GNB
BFA
CPV
MLI
MLI
SLE
SLE
GHA
SLE
NER
MLI
BEN
SLE
GHA
NGA
BFA
BFA
BEN
TGO
BEN
BFA
BEN
BFA
GHA
BEN
CIV
GHA
BEN
NGA
BEN
GHA
GHA
GHA
GHA
GHA
TGO
GHA
GNB
GHA
GHA
LBR
GHA
GNB
BFA
BEN
GNB
CPV
NGA
CPV
BEN
CPV
GHA
GNB
NGA
MLI
BEN
GHA
GHA
CPV
SLE
BEN
NGA
BFA
NGA
CIV
GHA
CIV
SEN
GHA
SEN
CPV
GHA
CPV
BFA
SEN
GNB
GMB
CPV
SEN
CIV
GNB
GNB
CPV
BEN
SEN
GNB
CPV
SEN
CIV
NGA
CPV
NGA
BFA
CPV
SEN
NGA GMB
GNB
CIV
BEN
SEN
GHA
CPV
GMB
BEN
CPV
CPV
GNB
LBR
BEN
CPV
SLE
NGA
BEN
BFA
TGO
CPV
NGA
SLE
CIV
BEN
GNB
SLE
SEN
GHA
CPV
GMB
NGA
BEN
CPV
GMB
NER
SLE
SEN
LBR
TGO
SEN
GHA
BFA
SLE
GMB
BFA
BEN
SEN
CIV
TGO
BEN
BEN
SLE
GMB
BEN
TGO
LBR LBRSEN
GMB
TGO
CIV
SLE
BEN
TGO
BEN
GMB
NGA
GMB
GMB
GHA
GMB
SLE
TGO
SLE
GMB
GMB
GMB
SEN
BEN
SEN
TGO
GNB
TGO
BEN
GMB
SEN
TGO
SEN
BEN
TGO
NGA
NGA
NER
BEN
SEN
SLE
BEN
NER
NER
GHA
LBR
GHA
BEN
GNB
SLE
LBR
BEN SEN
GNB
NGA
NGA
GHA
TGO
SLE
SEN
NGA
GMB
TGO
NGA
GMB
TGOSLE
TGO
LBR
TGO
NER
BEN
TGO
NGA CIV
NGA
GMB
TGO
SLE SEN
NGA
CIV
NGA
BEN
NGA
TGO
SEN
SLE
SLE
NER
GMB
NGA
BEN
SLE
BEN
LBR
NGA
SEN
BEN
SLE
SLE
SLE SLE
NER
NGA
GHA
CIV
LBR
SEN
NGA
SEN
SEN
SLE
NGA
CIV
CIV CIV
NER
NER
SLESEN
BEN GHA
SEN
SLE
NER
GHA CIV
GHA
LBR GHA
NERSEN
GHA
CIV
LBR
SEN
CIV
GHA
GHA
SEN CIV
CIV
CIV
CIV
GHA
GHA
SEN
LBR
LBR
LBR LBR
CIV
CIV
LBR
LBR
LBR
GHA
LBR
LBR
CIV
CIV
SEN
CIV
LBR
SEN
CIV
CIV CIV
CIV
LBR
CIV
CIV
CIV CIV
GHA
SEN
CIV
LBR
CIV CIV
GHA
SEN
GHA
GHASEN
SENSEN
SEN
0
5
10
15
neq5
Lowess smoothing, bandwidth = 0.8
ECOWAS
.98
INCOME GAP vs NUMBER EQUIVALENT - COUNTRY MEANS
.96
MLI
BFA
GNB
NER
CPV
TGO
.94
GMB
SLE
BEN
NGA
LBR
GHA
SEN
.92
ygap mean
GIN
CIV
2
3
4
neq5 mean
5
6
Lowess smoothing, bandwidth = 0.8
17
Figure 4.2b: Relation between Income Gap and Number Equivalent in SADC
SADC
1
INCOME GAP vs. NUMBER EQUIVALENT
.8
.7
ygap
.9
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
TZA
TZA
TZA
ZMB
ZMB
ZMB
MWI
AGO
MWI
MWI
ZAR
TZA
TZA
TZA
MDG
TZA
MDG
MDG
TZA
AGO
TZA
ZAR
TZA
ZWE
AGO
ZMB
ZMB
MWI
TZA
ZMB
TZA
TZA
ZAR
ZWEMDG
MWI
MWI
TZA
TZA
TZA
MWI
MWI
MDG
MWI
MDG
MWI
ZMB
TZA
MWI
MWI
ZAR
MWI
ZMB
ZMB
MWI
MDG
MWI
MDG
TZA
AGO
MWI
MDG
MWI
MDG
MWI
ZWE
MWI
MWI
ZAR
MWI
MWI
ZAR
MWI
ZAR
AGO
TZA
MWI
MWI
MWI
MDG
ZAR
AGO
TZA
ZAR
TZA
ZAR
ZAR
AGO
MWI
MWI
MWI
ZAR
MWI
ZMB
MWI
TZA
MWI
ZMB
MWI
MDG
MDG
ZMB
MWI
ZMB
TZA
MDG
TZA
TZA
TZA
ZMB
LSO
MDG
TZA
TZA
TZA
ZWE
TZA
TZA
MOZ
TZA
TZA
TZA
TZA
BWA
MDG
TZA
AGO
LSO
ZAR
MDG
ZMB
MOZ
LSO
MOZ
LSO
MOZ
MOZ
MOZ
MOZ
MOZ
LSO
ZWE
MOZ
AGO
LSO
ZMB
LSO
MOZ
AGO
MOZ
MOZ
AGO
BWA
ZAR
MDG
MOZ
LSO ZWE
ZMB
LSO
ZWE
ZMB
LSO
LSO
ZAR
MDG
AGO
LSO
ZAR
LSO
LSO
MOZ
ZAR
ZMB
LSO
LSO
MOZ
MOZ
MOZ
LSO
ZAR
LSO
ZWE
ZMB
ZAR
LSO
LSO
ZAR
ZAR
ZWE
LSO
LSO
LSO
ZWE
LSO
LSO
ZWE
ZMB
LSO
LSO
MDG
ZWE
LSO
ZWE
MOZ
LSO
MOZ
MDG
ZAR
MDG
LSO
LSO
ZAR
BWA
LSO
AGO
MDG
LSO
ZWE
ZWE
ZMB
ZWE
ZWE
ZWE
MDG
MOZ
ZAR
ZWE
MOZ
ZWE
ZWE
MOZ
ZWE
ZMB
BWA
ZAR
MOZ
MDG
ZWE
ZWE
MDG
SWZ
ZMB
ZMB
ZWE
ZWE
ZAR
ZMB
ZAR
MOZ
ZMB
ZWE
SWZ
ZWE
ZMB
ZWE
ZWE
ZWE
ZWE
MDG
SWZ
ZWE
ZMB
ZWE
MDG
ZMB
BWA
MDG
MDG
MDG
ZWE
ZWE
BWA
BWA
MDG
MDGMDG
MDG
MOZ
ZWE
BWA
ZMBZWE
BWA
ZWE
MOZ
ZWE
ZWE
BWA
ZWE
ZWE
MDG
BWAMOZ
MOZ
SWZ
MOZ
BWA
MDG
MOZ
MDG
SWZ
MOZ
SWZ
AGO
MOZ
BWA
MOZ
SWZ
AGO
AGO
MOZ
ZAF ZAF
SWZ
NAM
AGO
NAM
MOZ
SWZ
AGO
ZAF
AGO
AGO
NAM
AGO
SWZ
BWA
MOZ
BWA
BWA
SWZ
AGO
MOZ
MOZMOZ
AGO
BWA
AGO
SWZ
MOZ
AGO
BWA
SWZ
AGO AGO
BWA
SWZ
SWZ
BWA
SWZ
BWA
SWZ
SWZ
SWZ
NAM
BWA
NAM
BWA
BWA
NAM
BWA
BWA
SWZ
BWA
BWA
ZAF ZAF
ZAF
SWZ
BWA
SWZ NAM
SWZ
SWZ
BWA
SWZ
BWA
NAM
NAM
ZAF
NAM
SWZ
NAM
SWZ
BWA
NAM
NAM
NAM
SWZ
NAMZAF
SWZ
SWZ
SWZ
NAM
ZAF
ZAF
ZAF
ZAF
SWZ
NAM
ZAF
ZAF
ZAFZAF
ZAF
ZAF
MUS
MUS
MUS
ZAF ZAF
MUS
MUS
ZAF
MUS
ZAF
MUS
ZAF
MUS
ZAF
ZAF
ZAF ZAF
MUS
MUS
MUS
MUS
MUS
MUS
MUS
ZAF
MUS
ZAF
MUS
ZAF
MUS
ZAF
MUS
ZAF
MUS
MUS
MUS
ZAF
ZAF ZAF
ZAF
ZAF ZAF
ZAF
ZAFZAF
MUSMUS ZAF
MUS MUS
ZAF
MUS
MUS
MUS
MUS
ZAF
.6
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
0
10
20
neq5
30
40
Lowess smoothing, bandwidth = 0.8
SADC
1
INCOME GAP vs NUMBER EQUIVALENT - COUNTRY MEANS
MWIZAR
TZA
ZMB
LSO
AGO
MDG
MOZ
ZWE
ygap mean
.9
BWA
SWZ
.8
NAM
ZAF
.7
MUS
0
5
10
neq5 mean
15
20
Lowess smoothing, bandwidth = 0.9
18
Figure 4.2b: (continued): Relation between Income Gap and Number Equivalent in SADC
SADC (excluding South Africa)
1
INCOME GAP vs. NUMBER EQUIVALENT
.8
MUS
MUS
MUS MUS
MUS
MUS
MUS
MUSMUS
MUSMUS
MUS
MUS
MUS
MUSMUS
MUS
MUS
MUS MUS
.7
ygap
.9
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
ZAR
TZA
ZAR
TZA
TZA
ZMB
MWI
ZMB
ZMB
TZA
TZA
TZA
ZAR
MWI
MWI
AGO
AGO
MDG
TZA
TZA
MDG
TZA
MDG
TZA
TZA
AGO
AGO
ZWE
TZA
ZAR
AGO
AGO
ZMB
TZA
MWI
ZMB
TZA
TZA
ZMB
ZWE
ZAR
TZA
TZA
MWI
MWI
MWI
MDG
MDG
MWI
MWI
TZA
TZA
MWI
ZAR
MWI
MDG
MWI
TZA
MWI
ZMB
MDG
MWI
MDG
MWI
ZMB
ZMB
MWI
MDG
MWI
TZA
MDG
MWI
ZWE
MWI
MDG
MWI
MWI
ZAR
TZA
MWI
MWI
AGO
ZAR
MWI
MWI
AGO
ZAR
MWI
MWI
MWI
TZA
AGO
MDG
MWI
AGO
ZAR
ZAR
TZA
AGO
MDG
TZA
MWI
ZAR
ZAR
MWI
MWI
MWI
AGO
MWI
ZAR
MWI
TZA
ZMB
MDG
MDG
MDG
MWI
MWI
ZMB
ZMB
MWI
MDG
TZA
ZMB
ZMB
ZMB
AGO
TZA
TZA
TZA
TZA
MDG
LSO
ZWE
TZA
TZA
TZA
TZA
TZA
TZA
MOZ
TZA
TZA
MDG
BWA
TZA
MDG
ZAR
LSO
AGO
MOZ
ZMB
MOZ
LSO
MOZ
MOZ
MOZ
MOZ
MOZ
LSO
LSO
MOZ
ZWE
MOZ
AGO
LSO
ZMB
LSO
LSO
AGO
MOZ
MOZ
AGO
MOZ
BWA
MDG
ZAR
LSO
MOZ
AGO
ZWE
LSO
LSO
ZMB
MDG
ZAR
LSO
LSO
ZMB
LSO
ZAR
LSO
ZMB
ZAR
MOZ
LSO
MOZ
LSO
LSO
MOZ
ZWE
LSO
ZAR
LSO
ZAR
MOZ
ZWE
ZAR
ZMB
LSO
LSO
ZWE
ZAR
ZAR
LSO
ZWE
LSO
LSO
LSO
ZWE
LSO
LSO
ZWE
MDG
LSO
LSO
ZMB
ZWE
LSO
MOZ
MDG
MOZ
LSO
MDG
ZAR
LSO
LSO
ZAR
BWA
AGO
LSO
MDG
ZWE
LSO
ZWE
ZWE
ZWE
ZMB
MDG
ZWE
ZWE
ZAR
MOZ
ZMB
ZWE
MOZ
ZWE
MOZ
ZWE
ZARZWE
BWAZMBMDG
MOZ
ZWE
MDG
ZWE
ZMB
SWZ
ZWE
ZMB
ZMB
ZAR
ZWE
ZMB
MOZ
ZAR
SWZ
ZWE
ZWE
ZMB
ZWE
ZWE
MDG
ZWE
SWZ
ZMB
ZWE
MDG
ZWE
MDG
MDG
BWA
ZMB
MDG
ZWE
BWA
BWA
ZWE
MDG
MDG
MOZ
ZWE MDG
BWAZMB
BWA
MOZ
ZWE
MDG
ZWE
ZWE
BWA
ZWE
MDG
ZWE
ZWE
MDG
MOZ
BWA
MOZ
BWA SWZ
MDG
MOZ
MDG
MOZ
SWZ
MOZ
AGO
SWZ
MOZ
BWA
MOZ
AGO
AGO
MOZ
SWZ
NAM
NAM
AGO
MOZ
AGO
MOZ
SWZ
AGO
NAM
AGO
AGO
SWZ
BWASWZ
MOZ
BWA
MOZ
SWZ
BWA
MOZ MOZ
AGO
AGO
BWA
MOZAGO
SWZ
AGO AGO AGO
BWA
SWZ
SWZ
SWZ
BWA
SWZ
BWA
BWA
SWZ
BWA
SWZ
SWZ
SWZ
NAM
NAM
BWA
BWA
NAM
BWA
BWA
BWA
BWA
BWA
BWA
NAM
SWZ
SWZ
BWA
SWZ
SWZ
SWZ
SWZ
BWA
NAM
BWA
NAM
NAM
SWZ
SWZ
NAM
NAM
NAM
NAM
SWZBWA
SWZ
SWZ
SWZ
NAM
NAM
SWZ
.6
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUSMUSMUS
MUS
MUS
20
15
10
neq5
5
0
NAM
Lowess smoothing, bandwidth = 0.8
SADC (excluding South Africa)
1
INCOME GAP vs NUMBER EQUIVALENT - COUNTRY MEANS
MWI
ZMB
AGO
ZAR
TZA
LSO
MDG
MOZ
ZWE
ygap mean
.9
BWA
SWZ
.8
NAM
.7
MUS
2
4
6
neq5 mean
8
10
Lowess smoothing, bandwidth = 0.9
19
Figure 4.3a: Relation between Income Gap and Government Deficit in ECOWAS
ECOWAS
.98
INCOME GAP vs. GOVERNMENT DEFICIT (% GDP)
.94
.88
.9
.92
ygap
.96
CPV
SLE
SLE
NER
NER
SLE
NER
NER
NER
NER
NER
NER
GIN
GIN
GIN
GIN
GIN
GIN
GIN
GIN
GNB
SLE
GIN
NER
TGO
NER
GNB
TGO
GIN
GIN
GIN
TGO
GIN
NER
GIN
GIN
GIN
GIN
GIN
GIN
GIN
TGO
NER
GIN
NER
GIN
TGO
GIN
GIN
TGO
GIN
GIN
TGO
GIN
NER
MLI
NER
CPV
MLI
CPV
CPV
MLI
TGO
MLI
MLI
MLI
MLI
MLI
NER
MLI
CPV
CPV
BFA
MLI
BFA
BFA
MLI
MLI
BFA
CPV
MLI
SLE
BFA
GMB
GMB
LBR
CPV GNB
BFA
MLI
MLI
TGO
BFA
BFA
BFA
BFA
LBR
GMB
MLI
TGO
MLI
GMB
GNB
GMB
BFA
GNB
GNB
BFA
GNB
GNB
LBR
BFA
BFA
BFA
BFA
BFA
MLI
TGO
GNB GNB
GNB
MLI
CPV
TGO
GNB
MLI
BFA
GNB
TGO
BFA
SLE
BFA
SLETGO
LBR
MLI
LBR
GMB
GMB
MLI
SLE
GMB
LBR
GMB
LBR
GNB
GMB
LBR
GMB
MLI
GMB
GMB
TGO
BFA
GMB
MLI
MLI
LBR
TGO
CPV
GNB
NER
BFA
GNB
GNB
MLI
LBR
MLI
NER
TGO
GNB NER NER
NGA
MLI
SLE
LBR
CPV
NER BFA
NER
LBR
NER
NER
GMB
NGA
LBR
GNB CPV
NER
SLE
SLE
SLE
NER
SLE
GHA
SLE
TGO
BEN
BFA
BFA NGA
GHA
CIV
BEN
BEN
BEN
NGA
GHA
GHA
GHA
LBR
TGO
GNB
GHA
GHA
GHA
GNB
CPV
NGA
BEN
BEN
CPV
GHA
BEN
NGA
BEN
GHA
CPV
SLE
GHA NGA
NGA
NGA
SEN
GHA
CIV
CIV
GHA
NGA
SEN
GHA
CPV
CPV
GNB
CPV
GMB
NGA
CIV
SEN
CPV
GNB
SEN
BEN
SEN
GNB
CPV
CPV
CIV
NGA
CPV
CPV
NGA
CIV
SEN
BEN
NGA
GNB
CPV
CPV
GHA
BEN
CPV
GNB
CPV
LBR
SLE
BEN
NGA
BEN
BEN
TGO
NGA
CPV
BEN
SLE
CIV
BEN
GMB
GNB
SLE
SEN
GHA
GMB
NGA
BEN
TGO
SLE
NER
LBR
SEN
TGO
GHA BEN
SLE
SEN
BEN
CIV
TGO
SLE
BEN
BEN
TGO BEN
LBR
CIV
BEN
SLE
GMB
GMB
LBR
GMB
SLE
TGO
SLE
SEN
GMB
BEN
SEN
TGO
GNB
BEN
SEN
SEN
GMBGHA
SEN
NGA
NGA
BEN
SEN
SLE
NER
NER
GHA
LBR
BEN
GHA
GNB
LBR
CIVSLE
GNB
GHA
SLE
SEN
SLE
GMB
TGO
GMB
LBR
SEN
TGO GMB
GMB
NGA
TGO
SEN
CIV
NGA
NGA
NGA
SEN
SLE
GMB
NGA
LBR
NGA
GHA
CIV SEN
LBR
SLENGA
SEN
NGA
SENSEN
NGA
NGACIV
NGA
CIV GHA
SEN CIV
SEN
GHA
GHA
SEN
LBR
SEN
GHA
CIV
GHA
LBR
SEN
LBR
LBR
CIV
CIV
CIV
CIV
CIV
CIV
CIV
CIV
CIV CIV
CIVCIV
-60
-40
-20
govdef
0
TGO
LBR
20
Lowess smoothing, bandwidth = 0.8
ECOWAS
.98
INCOME GAP vs GOVERNMENT DEFICIT - COUNTRY MEANS
GIN
BFA
GNB
CPV
NER
TGO
GMB
.94
SLE
BEN
NGA
LBR
GHA
SEN
.92
ygap mean
.96
MLI
CIV
-20
-15
-10
-5
govdef mean
0
5
Lowess smoothing, bandwidth = 0.8
20
Figure 4.3a (continued): Relation between Income Gap and Government Deficit in
ECOWAS
ECOWAS
.97
INCOME GAP vs GOVERNMENT DEFICIT - TIME MEANS
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
.96
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
.95
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
.94
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
.93
ygap mean
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
BEN
G
C
M
LBR
N
TG
SLE
SEN
BFA
IPV
ER
G
M
H
N
V
LI
IO
B
A
NB
-10
-8
-6
govdef mean
-4
-2
Lowess smoothing, bandwidth = 0.8
21
Figure 4.3b: Relation between Income Gap and Government Deficit in SADC
SADC
1
INCOME GAP vs. GOVERNMENT DEFICIT (% GDP)
.8
.6
.7
ygap
.9
LSO
-60
ZARZAR
ZAR
ZAR
ZAR
ZAR
ZAR
TZA
TZA
TZA
TZA
TZA
TZA
ZAR
MWI
TZA
ZMB
TZA
TZA
ZMB
ZAR
TZA
TZA
MWI
MWI
TZA
MWI
MWI
ZAR
MWI
TZA
MDG
ZMB
MWI
MWI
MDG
ZMB
MWI
MWI
MDG
ZMB
ZAR
TZA
MDG
MWI
ZMB
ZAR
MDG
TZA
MWI
ZAR
MWI
MWI
ZAR
TZA
MWI
MWI
MDG
TZA
ZAR
TZA
MDG
ZAR
MWI
TZA
MDG
ZAR
ZAR
MWI
MWI
ZAR
ZAR
MWI MWI
ZAR
MWI
TZA
ZMB
MWI
MWI
MDG
ZMB
MDG
ZMB
MWI
ZMB
ZMB
TZA
TZA
TZA
ZMB
MDG
ZMB
LSO
MOZ
TZA
TZA
TZA
TZA
ZAR
TZA
BWA
ZMB
MDG
MDG
MOZ
ZMB
ZAR
MOZ
MOZ
LSO
MOZ
MOZ
MOZ
MOZ
MOZ
MOZ
MOZ
MOZ
LSO
LSO
ZMB
BWA
ZAR
MDG
LSO
MOZ
LSO
ZMB
ZWE
LSO
MDG
LSO
ZAR
ZMB
ZMB
LSO
LSO
ZAR
LSO
MDG
LSO
ZMB
LSO
ZAR
MOZ
MOZ
LSO
MOZ
ZWE
ZAR
ZMB
ZWE
ZAR
LSO
LSO
ZWE
LSO
LSO
ZWE
ZWE
LSO
LSO
LSO
MDG
ZWE
LSO
ZMB
ZWE
LSO
MOZ
MDG
MDG
LSO
BWA MOZ
LSO
LSO
ZWE
MDG
ZWE
ZWE
ZMB
ZWE
ZWE
MDG
ZMBLSO
ZMB
ZWE
MOZ
ZWE
ZWE
BWA
ZWE
ZMB
MOZ
ZWE
ZWE
MDG
ZMB
MDG
MDG
ZMB MOZ
ZMB
ZWE
MOZ
ZWE
MDG
ZWE
BWA
ZWE
BWA
MDG
MDG
MOZ
BWA
BWA
ZWE
MOZ
ZWE
ZWE
ZWE
ZWE
ZWE BWA
BWA
MOZ
BWA
SWZ
MOZ
SWZ
BWA
SWZ
SWZ
MOZ
SWZ
BWA
SWZ
MOZ
MOZ
BWA
SWZ
BWA
SWZ
BWA
SWZ
SWZ
SWZ
SWZ
SWZ
BWA
SWZ
SWZ
SWZ
BWA
BWA
BWA
BWA
SWZ
BWA
BWA
BWA
ZAFBWA
SWZ
BWA
SWZ
SWZ
SWZ
SWZ
SWZ
BWA
ZAF
SWZ
SWZ
SWZ SWZ
ZAF SWZ SWZ
SWZ
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF MUS MUS
MUS
ZAF
ZAF
MUS
ZAF
ZAF
ZAF
ZAF
ZAF
MUSMUSZAF
MUS
MUS MUS
MUS
MUS
ZAF
ZAF
MUS
ZAF
MUS
ZAF
MUS
ZAF
MUS
MUS
MUS
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
ZAF
MUS
ZAF
ZAF
ZAF
MUS
ZAF
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
MUS
-40
-20
0
20
40
govdef
Lowess smoothing, bandwidth = 0.8
SADC
1
INCOME GAP vs GOVERNMENT DEFICIT - COUNTRY MEANS
MWI
TZA
LSO
ZMB
MOZ
ZAR
MDG
ZWE
ygap mean
.9
BWA
.8
SWZ
ZAF
.7
MUS
-25
-20
-15
-10
govdef mean
-5
0
Lowess smoothing, bandwidth = 0.8
22
Figure 4.3b (continued): Relation between Income Gap and Government Deficit in SADC
SADC
.92
INCOME GAP vs GOVERNMENT DEFICIT - TIME MEANS
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
GZ
S
B
DO
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
GZ
S
B
DO
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
GZ
S
B
DO
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
.9
GZ
S
B
DO
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
GZ
S
B
DO
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
GZ
S
B
DO
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
.89
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
.88
ygap mean
.91
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
OZ
G
S
DB
WI
U
O
AM
SWZ
AG
ZAF
LSO
ZAR
BWA
M
N
ZWE
ZM
TZA
-15
-5
-10
0
govdef mean
Lowess smoothing, bandwidth = 0.8
23
Figure 4.4a: Relation between Economic and Political Freedoms in ECOWAS
ECOWAS
6
ECONOMIC FREEDOM vs. POLITICAL FREEDOM
4
ef
5
CIV
CIV
TGO
NER
NER GMB
TGO
GMB
GMB
BEN BEN
GMB
MLI
NER
MLI
MLI NGA
BEN NGA
MLI MLI
NER
SLE NER
NER
GHA
TGO TGO
GIN
GIN
CIV
GIN
CIV
SLE
CIV
GIN
GIN
CIV
GIN
GIN
TGO
TGO
TGO
CIV
TGO
MLI
NER
SLE
CIV
GMB
NGA
SLE
TGO
CIV
CIV
BEN
CIV
TGO
GNB
MLI
NER
TGO
GHA GHA
CIV
BFA
NGA
NGA
SLE
SEN
BFA
SLE
GNB
BFA
SLE
SLE
GNB
NER
BFA
SEN
GNB
GHA
NER
SEN
NGA
SEN
NER
NGA
SEN
BFA
GMB
SEN
SLE
BFA
GMB
NER
BFA
GMB
BFA
NGA
GHA
SLE
NER
SLE
NER
SEN
GNB
MLI
GHA
GHA
MLI
MLI
GHA
SEN NER
SEN
GHA
SLE
NGA
SLE
SEN
NER MLI
SEN
SLE
NGA NGA
NGA NGA GNB
NGA
SLE
SLE NGA
NGA
GNB
GHA GHA
GHA GHA
GNB
GNB
GHA GHA GHA
GHA
GHA
GHA
GHA
CPV
BEN
MLI
BEN CPV
CPV
BEN
MLI
BEN
MLI
BEN
CPV
BEN
CPV
CPV
CPV
BEN CPV
CPV
NGA
NGA
GHA
2
3
NGA SLE NGA
NGA NGA
NGA
GHA
MLI
GHA
SEN
BEN
MLI
SEN
BEN
MLI
GHA
BEN
BEN
MLI
MLI
8
6
4
prcl
2
0
Lowess smoothing, bandwidth = 0.8
ECOWAS
ECONOMIC vs POLITICAL FREEDOM - COUNTRY MEANS
5.5
GIN
CIV
BFA
5
MLI
NER
4.5
SLE
4
NGA
GHA
GNB
3.5
ef mean
TGO
GMB
SEN CPV
BEN
2
2.5
3
prcl mean
3.5
4
4.5
Lowess smoothing, bandwidth = 0.8
24
Figure 4.4a (continued): Relation between Economic and Political Freedoms in ECOWAS
ECOWAS
5
4
4.5
ef
5.5
6
ECONOMIC vs POLITICAL FREEDOM
2
6
4
prcl
LOW
HIGH
FULL
Lowess smoothing, bandwidth = 0.8
25
Figure 4.4b: Relation between Economic and Political Freedoms in SADC
SADC
8
ECONOMIC FREEDOM vs. POLITICAL FREEDOM
6
ZMB
ZMB
ef
ZAF
ZAF
4
ZAF
ZAR
MWI
MWI
MWI
ZAR ZAR
MWI
ZAR
ZAR ZAR
ZAR
ZAR
ZAR
ZAR
ZWE
ZMB
ZMB
ZMB
TZA
ZWE
ZWE
MDG
ZMB
ZMB
2
ZAR
SWZ
SWZ
SWZ SWZ
SWZ
SWZ SWZ
ZAF ZWE
SWZ SWZ
SWZ TZA
ZAF TZA
ZAR ZAF
ZWE
ZWE
TZA
ZWE
ZAR ZWE
MWI
ZWE ZWE
TZA
ZAR ZMB
ZMB
ZAR
ZWE ZWE
MDG MDG
ZMB
TZA
MDG
MDG
ZAR
TZA ZAR
TZA
ZAR
TZA ZMB ZMB
ZWE
ZWE
ZAR
AGO ZMB
AGO
BWA MUS
BWA MUS
BWA
MUS
MUS MUS
ZAF
ZAF
ZMB
TZA
ZAF
ZMB
NAM
NAM
TZA
NAM
ZAF
TZA
ZAF
TZA MDG NAM
NAM BWA
ZAF
MUS
NAM MUS
BWA
MDG
MUS
BWA
MDG
TZA
MDG
MOZ
MDG
TZA MOZ
MWI
MWI
MWI MOZ
BWA NAM BWA
MWI MWI
NAM
LSO MOZ
MDG MWI
ZAF MDG
MWI
BWA
BWA
MWI
LSO
LSO
BWA
LSO
MOZ
LSO
ZWE
MUS
MUS
LSO MOZ MWI
MUS MWI
MUS MUS
LSO MOZ
ZMB
MWI
MOZ
MOZ MDG
MDG
MDG
0
2
4
prcl
6
8
Lowess smoothing, bandwidth = 0.9
SADC
ECONOMIC vs POLITICAL FREEDOM - COUNTRY MEANS
6
SWZ
NAM
BWA MUS
4
MOZ
MWI
ZWE
TZA
LSO
ZMB MDG
3
ZAR
AGO
2
ef mean
5
ZAF
1
2
3
4
5
6
prcl mean
Lowess smoothing, bandwidth = 0.8
26
Figure 4.4b (continued): Relation between Economic and Political Freedoms in SADC
SADC
5
4
3
ef
6
7
ECONOMIC vs POLITICAL FREEDOM
2
3
5
4
prcl
LOW
HIGH
6
FULL
27
Figure 5.1a Conditional volatility of EMP Cape Verde vs ECOWAS
Source: Lopes and Santos (2010)
Figure 5.1b Conditional volatility of EMP Mozambique vs. SADC
Source: Lopes and Santos (2010)
28
Figure 5.2a Conditional mean of EMP Cape Verde vs ECOWAS
Source: Lopes and Santos (2010)
Figure 5. 2b Conditional mean of EMP Mozambique vs. SADC
Source: Lopes and Santos (2010)
29
APPENDIX 1
Data Description
Variable Type
Description
Source
ypc
neq 1,2,3,4,5
inflation1
govdef
open1
reer
emp
Income Gap to Frontier (Country and U.S. GDP per
capita, constant 2000 USD) – see text for definition
GDP per capita (constant 2000 USD)
Number Equivalent Index (1,2,3,4,5 digit SITC rev2 )
Inflation, consumer prices (annual %)
Government Surplus/Deficit (% GDP)
Exports plus Import (% of GDP)
Real Effective Exchange Rate (% change)
Exchange Market Pressure (% change)
World Bank &
Own calculations
World Bank
OECD
World Bank
World Bank
World Bank
IMF - IFS
Own calculations
pr
cl
ef
constage
Index of Political Rights
Index of Civil Liberties
Index of Economic Freedom
Constitutional Age
demage
Age of Democracy
demtot
dictrans
Number of other Democracies in System
Number of Prior Transitions to Dictatorship
Controls
Economic
k
ltotal
Gross capital formation (constant 2000 USD)
Labour Force, total
World Bank
World Bank
Geographic
land
landagri
landarbl
disteur
Land (sq. km)
Agricultural land (% of land area)
Arable land (% of land area)
Minimum distance to the European Union
World Bank
World Bank
World Bank
CEPII
Demographic
poptotal
popdens
popurban
life
Population, total
Population density (people per
Urban dwellers (% Population)
Life expectancy at birth, total (years)
World Bank
World Bank
World Bank
World Bank
Dummies
Economic
landlock
oil
capcont
legaleng
cpv
gha
mus
moz
sen
zaf
Landlocked countries
Net Oil Exporter
Capital Controls
British Legal Origin
Cape Verde
Ghana
Mauritius
Mozambique
Senegal
South Africa
Policy
Institutions
Variable
ygap
Freedom House
Freedom House
Fraser Institute
Polity
Eichengreen &
Leblang (2006)
Polity
Polity
United Nations
United Nations
IMF - EAER
Polity
IFS Country Codes
IFS Country Codes
IFS Country Codes
IFS Country Codes
IFS Country Codes
IFS Country Codes
30
The acronyms of the different variables used in the regressions are given above. The data are
annual and cover the period 1960-2004 but some variables have shorter spans (e.g. data on
political and civil liberties, economic freedom) as these only became available later. Capital
controls are measured in the manner of the Annual Report on Exchange Arrangements and
Exchange Restrictions of IMF, which seeks to capture whether there are explicit legal
restrictions on capital transitions (supplemented with historical sources introduced by
Eichengreen and Leblang, 2006). For data on the real effective exchange rate, the International
Financial Statistics gives an index based on 2005=100, where an increase reflects an
appreciation. A real effective exchange rate index represents a nominal effective exchange rate
index adjusted for relative movements in national price or cost indicators of the home country
and selected countries. A nominal effective exchange rate index, meanwhile, represents the ratio
(expressed on the base 2005=100) of an index of a currency’s period- average exchange rate to a
weighted geometric average of exchange rates for the currencies of selected countries.
Table A1.1 reports summary statistics for the ECOWAS and SADC averages of all the
variables and Table A1.2 reports correlations for both samples of the final model variables.
31
Table A1.1 - Summary Statistics (all variables)
ECOWAS
Variable
ygap
ypc
ypcgrowth
neq5
inflation1
govdef
open1
reer
averageempusd
pr
cl
prcl
ef
constage
demage
demtot
dictrans
k
ltotal
disteur
landagri
land
landarbl
poptotal
popdens
popurban
life
Obs.
675
612
597
637
574
450
592
144
106
490
490
490
295
596
660
660
626
415
375
675
660
660
660
675
660
576
240
Mean
0.95
356.70
0.23
3.83
12.83
-5.70
59.01
-0.04
0
2.87
3.23
3.05
4.81
13.11
0.72
64.72
0.39
4.35e+08
4.97e+06
4889.93
42.49
335343.33
12.39
1.01e+07
42.83
0.11
47.50
ygap
ypc
ypcgrowth
neq5
inflation1
govdef
open1
reer
averageempusd
pr
cl
prcl
ef
constage
demage
demtot
dictrans
k
ltotal
disteur
landagri
land
landarbl
poptotal
popdens
popurban
life
630
507
493
554
495
370
502
129
106
441
441
441
316
509
600
600
572
466
350
630
616
616
616
630
616
497
237
0.9
945.54
1.13
6.47
109.59
-7.37
80.63
-0.02
0.01
3.38
3.41
3.4
4.91
13.06
1.76
65.02
0.15
2.03E+09
5.60E+06
8253.78
50.26
688990
9.62
1.02E+07
55.93
0.14
50.9
Median
0.95
284.39
0.66
3.46
6.89
-4.65
54.58
-0.01
0
2.00
3.00
2.50
5.05
7.00
0.00
54.50
0.00
3.00e+08
2.66e+06
5020.85
41.81
192530.00
9.43
4.49e+06
35.96
0.10
46.90
Std. Dev.
0.02
217.94
7.32
2.09
20.09
9.19
26.57
0.26
0.04
1.78
1.34
1.50
0.90
19.98
2.16
26.48
0.73
5.04e+08
8.95e+06
302.59
17.32
415989.64
9.89
2.06e+07
31.32
0.08
7.75
Minimum
0.86
56.47
-50.49
1.00
-34.40
-57.26
6.32
-1.88
-0.13
1.00
1.00
1.00
2.31
0.00
0.00
36.00
0.00
4.90e+06
88445.88
4244.89
13.04
4030.00
1.34
196351.00
2.49
0.00
32.28
Maximum
0.99
1266.81
90.47
15.12
178.70
27.17
140.86
0.79
0.21
7.00
7.00
7.00
6.34
105.00
14.00
110.00
3.00
3.60e+09
5.00e+07
5283.33
81.40
1.27e+06
46.15
1.38e+08
157.07
0.39
69.84
0.08
1040.85
5.69
5.75
1114.9
10.29
40.54
0.2
0.04
1.85
1.56
1.65
1.10
16.35
5.53
26.72
0.36
4.85E+09
5.69E+06
978.51
20.09
596625.63
11.76
1.14E+07
121.74
0.13
8.69
0.6
81.01
-27.14
1
-9.62
-54.09
14.33
-0.91
-0.08
1
1
1
2.39
0
0
35
0
2.26E+06
170025.2
6257.08
9.68
2030
0.61
326000
0.75
0
33.19
0.99
4264.32
23.75
36.09
23773.13
32.68
198.91
1
0.18
7
7
7
7.35
81
37
110
1
2.79E+10
2.28E+07
9571.16
87.97
2.27E+06
49.26
5.69E+07
607.58
0.78
71.97
SADC
0.94
459.1
1.07
4.96
12.14
-6.15
68.23
-0.02
0.00
3
3
3
4.84
8
0
55.5
0
4.35E+08
4.28E+06
8491.14
46.94
662465
6.77
6.74E+06
18.2
0.13
49.25
32
Table A1.2 - Correlations (final model variables only)
lnygap
lnneq5
inflation1
govdef
lnopen1
lnprcl
lnef
constage
demage
demtot
dictrans
lnk
lnpopdens
lnygap
lnneq5
inflation1 govdef
lnopen1
lnprcl
lnef
constage demage
demtot
dictrans
lnk
lnpopdens
1
-0.126
0.08
-0.128
-0.396
-0.242
-0.264
-0.225
-0.189
0.244
0.042
-0.392
0.107
1
-0.012
-0.043
-0.027
0.18
0.296
0.176
0.073
0.064
0.003
0.335
0.144
1
-0.011
-0.016
-0.042
-0.09
-0.038
-0.013
0.044
-0.018
-0.035
-0.013
1
0.212
0.321
0.246
0.143
0.162
-0.183
-0.084
-0.104
1
0.362
0.022
0.376
0.26
0.202
0.096
0.24
1
0.148
0.282
0.282
-0.046
0.221
0.074
1
0.008
-0.01
-0.121
0.427
-0.046
1
0.241
0.123
0.246
1
0.243
0.19
1
-0.029
1
1
-0.017
0.035
0.069
0.102
0.009
-0.148
-0.04
0.15
-0.129
1
0.24
0.266
0.031
0.283
33
Figure A1.a: Description of ECOWAS
ECOWAS
INCOME GAP (reverse scale)
0
.05
1-ygap
.1
.15
(1960-2004, read from left to right)
BEN
BFA
CIV
CPV
GHA
GIN
GMB
GNB
LBR
MLI
NER
NGA
SEN
SLE
TGO
NER
NGA
SEN
SLE
TGO
NGA
SEN
SLE
TGO
ECOWAS
NUMBER EQUIVALENT
0
5
neq5
10
15
(1960-2004, read from left to right)
BEN
BFA
CIV
CPV
GHA
GIN
GMB
GNB
LBR
MLI
ECOWAS
INFLATION (consumer prices, annual %, log)
2
0
-2
-4
inflation1
4
6
1960-2004, read from left to right
BEN
BFA
CIV
CPV
GHA
GIN
GMB GNB
LBR
MLI
NER
34
Figure A1a (continued): Description of ECOWAS
ECOWAS
GOVERMENT DEFICIT (% GDP)
-60
-40
-20
govdef
0
20
1960-2004, read from left to right
BEN
BFA
CIV
CPV
GHA
GIN
GMB GNB
LBR
MLI
NER
NGA
SEN
SLE
TGO
NER
NGA
SEN
SLE
TGO
SEN
SLE
TGO
ECOWAS
150
OPENNESS (X+M/GDP)
0
50
open1
100
1960-2004, read from left to right
BEN
BFA
CIV
CPV
GHA
GIN
GMB GNB
LBR
MLI
ECOWAS
COMPOSITE INDEX OF POLITICAL AND CIVIL FREEDOMS
4
2
0
prcl
6
8
1960-2004, read from left to right
BEN
BFA
CIV
CPV
GHA
GIN
GMB GNB
LBR
MLI
NER
NGA
35
Figure A1a (continued): Description of ECOWAS
ECOWAS
INDEX OF ECONOMIC FREEDOM
0
2
ef
4
6
1960-2004, read from left to right
BEN
BFA
CIV
CPV
GHA
GIN
GMB
GNB
LBR
MLI
NER
NGA
SEN
SLE
TGO
NER
NGA
SEN
SLE
TGO
ECOWAS
LIFE EXPECTANCY AT BIRTH
40
20
0
life
60
80
1960-2004, read from left to right
BEN
BFA
CIV
CPV
GHA
GIN
GMB GNB
LBR
MLI
36
Figure A1.b: Description of SADC
SADC
INCOME GAP (reverse scale)
0
.1
.2
1-ygap
.3
.4
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
TZA
ZAF
ZAR
ZMB
ZWE
TZA
ZAF
ZAR
ZMB
ZWE
ZAF
ZAR
ZMB
ZWE
SADC
NUMBER EQUIVALENT
20
0
10
neq5
30
40
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
SADC
INFLATION (consumer prices, annual %, log)
-5
0
lninflation1
5
10
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
TZA
37
Figure A1.b (continued): Description of SADC
SADC
GOVERNMENT DEFICIT (% GDP)
-60
-40
-20
govdef
0
20
40
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
TZA
ZAF
ZAR
ZMB
ZWE
TZA
ZAF
ZAR
ZMB
ZWE
TZA
ZAF
ZAR
ZMB
ZWE
SADC
DEGREE OF OPENNESS (X+M/GDP)
100
0
50
open1
150
200
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
SADC
POLITICAL FREEDOM INDEX
4
2
0
prcl
6
8
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
38
Figure A1.b (continued): Description of SADC
SADC
ECONOMIC FREEDOM INDEX
ef
0
2
4
6
8
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
TZA
ZAF
ZAR
ZMB
ZWE
TZA
ZAF
ZAR
ZMB
ZWE
SADC
LIFE EXPECTANCY AT BIRTH
40
20
0
life
60
80
(1960-2004, read from left to right)
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
NAM
SWZ
39
APPENDIX 2
Figure A2.1a: Comparison of High and Low Regimes in ECOWAS
ECOWAS
-4
-2
0
ypcgrowth
2
4
GDP PER CAPITA GROWTH - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA GIN GMB GNB
LBR
HIGH
MLI NER
NGA
SEN
SLE
TGO
SEN
SLE
TGO
SLE
TGO
LOW
ECOWAS
4
0
2
neq5
6
8
NUMBER EQUIVALENT - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA GIN GMB GNB
LBR
HIGH
MLI NER
NGA
LOW
ECOWAS
30
20
10
0
inflation1
40
50
INFLATION - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA GIN
GMB
HIGH
GNB
LBR
MLI NER
NGA
SEN
LOW
40
Figure A2.1a (continued): Comparison of High and Low Regimes in ECOWAS
ECOWAS
-20
-10
govdef
0
10
GOVERNMENT DEFICIT - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA GIN GMB GNB
LBR
MLI
NER NGA SEN
SLE
TGO
regime
HIGH
LOW
ECOWAS
0
50
open1
100
150
OPENNESS - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA
GIN GMB GNB
LBR
HIGH
MLI
NER
NGA
SEN
SLE
TGO
LOW
ECOWAS
0
2
prcl
4
6
POLITICAL FREEDOM - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA GIN GMB GNB
HIGH
LBR
MLI NER NGA SEN
SLE
TGO
LOW
41
Figure A2.1a (continued): Comparison of High and Low Regimes in ECOWAS
ECOWAS
0
2
ef
4
6
ECONOMIC FREEDOM - LOW vs HIGH REGIME
BEN
BFA
CIV
CPV
GHA
GIN
GMB
HIGH
GNB
MLI
NER
NGA
SEN
SLE
TGO
LOW
42
Figure A2.1b: Comparison of High and Low Regimes in SADC
SADC
-10
0
ypcgrowth
10
20
GDP PER CAPITA GROWTH - HIGH vs. LOW REGIME
AGO BWA
LSO
MDG
MOZ MUSMWINAM
SWZZAF ZAR
HIGH
ZMB ZWE
LOW
SADC
10
5
0
AGO
BWA
LSO
MDG
MOZ
MUS MWI NAM SWZ TZA ZAF
HIGH
ZAR
ZMB
ZWE
ZMB
ZWE
LOW
SADC
2
4
6
INFLATION - HIGH vs. LOW REGIME
0
neq5
15
20
NUMBER EQUIVALENT - HIGH vs. LOW REGIME
AGO BWA
LSO
MDG
MOZ
MUS
MWI
HIGH
NAM SWZ
TZA
ZAF
ZAR
HIGH
43
Figure A2.1b (continued): Comparison of High and Low Regimes in SADC
SADC
-25
-20
-15
govdef
-10
-5
0
GOVERNMENT DEFICIT - HIGH vs. LOW REGIME
BWA
LSO
MDG
MOZ
MUS
HIGH
MWI
TZA
ZAF
ZAR
ZMB
ZWE
LOW
SADC
0
50
open1
100
150
OPENNESS - HIGH vs. LOW REGIME
AGO
BWA
LSO
MDG
MOZ
MUS MWI NAM SWZ
HIGH
ZAF
ZAR
ZMB
ZWE
LOW
SADC
0
2
prcl
4
6
POLITICAL FREEDOM - HIGH vs. LOW REGIME
AGO BWA
LSO
MDG
MOZ
MUS
HIGH
MWI
NAM SWZ
TZA
ZAF
ZAR
ZMB
ZWE
LOW
44
Figure A2.1b (continued): Comparison of High and Low Regimes in SADC
SADC
4
2
0
ef
6
8
ECONOMIC FREEDOM - HIGH vs. LOW REGIME
AGO
BWA
LSO
MDG
MOZ
MUS
MWI
HIGH
NAM
SWZ
TZA
ZAF
ZAR
ZMB
ZWE
LOW
45
OLS and 2SLS Estimation Results
Table A2.1a: Determinants of Diversification in ECOWAS
Variable Type
Policy
Variables
lnygap
govdef
Institutions
lnprcl
lnef
demage
OLS
Pooled
lnneq5
OLS
Random Effects
lnneq5
OLS
Between Effects
lnneq5
OLS
Fixed Effects
lnneq5
-0.263***
(-3.550)
-0.0109***
(-2.971)
0.0484
(0.908)
0.264**
(2.217)
-0.0353*
(-1.945)
-0.241***
(-2.812)
-0.0106***
(-2.677)
0.0651
(1.203)
0.380***
(3.418)
-0.0482**
(-2.367)
-0.793***
(-3.626)
-0.214**
(-2.711)
0.208***
(4.100)
0.176***
(2.678)
0.0875
(1.069)
0.516**
(2.282)
-0.0483***
(-3.787)
-0.00773*
(-2.029)
demtot
Control
lnpopdens
lnltotal
lndisteur
Dummies
landlock
cpv
gha
sen
legaleng
Constant
Model Diagnostics
1.164**
(2.333)
7.313***
(6.185)
0.811***
(3.717)
0.609***
(4.280)
-1.200***
(-20.55)
1.267***
(8.722)
-0.123**
(-1.984)
-61.19***
(-5.967)
7.262***
(3.515)
0.766**
(2.115)
0.760***
(4.196)
-1.225***
(-13.54)
1.292***
(5.502)
-60.95***
(-3.426)
-0.861***
(-3.362)
4.423***
(5.035)
Observations
223
223
592
R-squared
0.853
0.635
Adjusted R-squared
0.844
0.574
F test
318.2
10.44
Prob > F
0
0.00236
Number of countries
14
15
R-squared within model
0.151
R-squared between
0.954
model
R-squared overall model
0.848
Wald Chi2
973.2
Prob > W
0
Robust t-statistics in parentheses (except for the case of between effects) *** p<0.01, ** p<0.05, * p<0.1
-15.48**
(-2.168)
228
0.171
0.149
30.54
9.52e-07
14
46
Table A2.1a (continued): Determinants of Diversification in ECOWAS
Variable Type
Variables
Policy
lnygap
Institutions
lnprcl
lnef
demage
2SLS
Random Effects
lnneq5
2SLS
Between Effects
lnneq5
2SLS
Fixed Effects
lnneq5
-0.138
(-1.599)
0.149**
(2.473)
0.374***
(3.226)
-0.0342**
(-1.991)
-0.945***
(-3.910)
-0.358**
(-2.501)
0.130**
(2.216)
0.351***
(2.852)
-0.0334*
(-1.816)
-0.00852***
(-2.929)
demtot
Control
lnpopdens
0.210**
(2.409)
lnltotal
lndisteur
Dummies
landlock
cpv
gha
sen
Constant
Model Diagnostics
1.463***
(4.074)
7.244***
(4.097)
0.750**
(2.345)
0.599**
(2.536)
-1.290***
(-7.445)
1.275***
(5.474)
-61.34***
(-4.051)
-1.409***
(-5.242)
5.183***
(5.256)
Observations
200
315
R-squared
Adjusted R-squared
0.721
Number of countries
13
14
R-squared within model
0.153
0.0278
R-squared between model
0.966
0.764
R-squared overall model
0.860
0.328
F test
0
0.000370
Prob > F
0.721
t-statistics in parentheses (robust in the case of fixed effects) *** p<0.01, ** p<0.05, * p<0.1
183
0.227
0.138
13
0
0.138
47
Table A2.1b Determinants of Diversification in SADC
Variable Type
Policy
Variables
lnygap
lnopen1
Institutions
lnef
OLS
Pooled
lnneq5
-0.132***
(-2.839)
-0.468***
(-7.422)
0.803***
(5.081)
dictrans
Physical
OLS
Random Effects
lnneq5
OLS
Between Effects
lnneq5
OLS
Fixed Effects
lnneq5
-0.315
(-1.626)
0.886***
(4.988)
-0.328***
(-3.793)
2.278***
(3.327)
0.619***
(4.274)
0.471***
(4.570)
0.148*
(1.839)
-4.949***
(-3.108)
4.155**
(2.635)
lnk
lnpopdens
lnltotal
landlock
mdg
moz
tza
zaf
zwe
Constant
0.633***
(5.062)
-0.275**
(-1.997)
0.584***
(7.243)
1.197***
(9.883)
0.854***
(9.927)
2.619***
(4.926)
0.972*
(1.847)
-0.805*
(-1.912)
1.557**
(2.364)
0.963***
(2.668)
0.0189
(0.0657)
-7.705***
(-3.539)
254
290
217
Model Diagnostics Observations
Number of countries
14
14
R-squared
0.641
0.789
Adjusted R-squared
0.630
0.696
R-squared within model
0.0964
R-squared between model
0.672
R-squared overall model
0.555
F test
67.08
8.439
Prob > F
0
0.00410
Wald Chi2
49.57
Prob > W
1.70e-09
Robust t-statistics in parentheses (except for the case of between effects) *** p<0.01, ** p<0.05, * p<0.1
-48.18**
(-2.538)
237
13
0.142
0.127
10.31
0.00122
48
Table A2.1b (continued): Determinants of Diversification in SADC
Variable Type
Variables
Policy
lnygap
Institutions
lnef
constage
Physical
2SLS
Random Effects
lnneq5
2SLS
Between Effects
lnneq5
2SLS
Fixed Effects
lnneq5
-0.380***
(-3.976)
0.936***
(5.791)
0.00611***
(3.427)
-0.242*
(-2.164)
2.505***
(3.831)
0.401***
(5.909)
0.512***
(9.075)
-0.508*
(-2.273)
0.628**
(2.897)
-9.092***
(-5.444)
-0.310**
(-2.091)
1.196***
(6.992)
0.00602**
(2.006)
-4.974***
(-3.415)
4.415***
(3.587)
lnpopdens
lnltotal
moz
zwe
Constant
0.753**
(2.603)
-4.563***
(-5.020)
156
156
Model Diagnostics Observations
Number of countries
12
12
R-squared
Adjusted R-squared
0.899
R-squared within model
0.258
0.148
R-squared between model
0.850
0.945
R-squared overall model
0.734
0.663
F test
19.62
20.63
Prob > F
0
0.00102
t-statistics in parentheses (robust in the case of fixed effects) *** p<0.01, ** p<0.05, * p<0.1
156
12
0.350
0.270
35.51
0
49
Table A2.2a: Determinants of Convergence in ECOWAS
Variable Type
Policy
Variables
lnneq5
OLS
Pooled
lnygap
OLS
Random Effects
lnygap
-0.157***
(-5.848)
inflation1
OLS
Between Effects
lnygap
-0.340***
(-3.680)
-0.0435***
(-3.658)
govdef
-0.00222*
(-1.932)
-0.0498***
-0.00222*
lnopen1
Institutions
lnprcl
-0.0764***
(-2.827)
lnef
demage
demtot
dictrans
Control
-0.0696***
(-10.44)
0.00897***
(22.17)
0.148***
(5.416)
-0.0833**
(-2.166)
-0.309***
(-5.831)
-0.0504***
(-6.215)
0.192***
(6.243)
0.00828***
(15.00)
-0.414**
(-2.475)
-0.166**
(-2.460)
-0.0216**
(-3.153)
-0.00162**
(-2.610)
lnk
-0.0830***
(-3.922)
-3.145**
(-2.720)
4.296***
(3.737)
lnpopdens
lnltotal
landlock
Dummies
oil
0.0997***
(2.932)
-0.610***
(-18.17)
cpv
gha
sen
legaleng
Constant
Model Diagnostics
OLS
Fixed Effects
lnygap
-0.351***
(-6.363)
-0.379***
(-10.07)
-0.212***
(-6.335)
3.880***
(65.32)
0.209***
(3.945)
-0.497***
(-7.637)
-0.219***
(-4.714)
-0.452***
(-9.250)
-0.359***
(-7.010)
-0.133***
(-3.417)
4.177***
(44.93)
-0.564***
(-4.766)
4.975***
(30.59)
Observations
441
181
444
R-squared
0.732
0.811
Adjusted R-squared
0.725
0.759
F test
154.7
15.73
Prob > F
0
0.000271
Number of countries
13
15
R-squared within model
0.739
R-squared between model
0.920
R-squared overall model
0.849
Wald Chi2
785.3
Prob > W
0
Robust t-statistics in parentheses (except for the case of between effects) *** p<0.01, ** p<0.05, * p<0.1
-45.71***
(-3.491)
140
0.917
0.912
64.62
9.04e-06
11
50
Table A2.2a (continued): Determinants of Convergence in ECOWAS
Variable Type
Variables
lnneq5
Policy
2SLS
Random Effects
lnygap
2SLS
Between Effects
lnygap
0.790***
(5.400)
-0.326***
(-3.613)
lnopen1
lnprcl
Institutions
2SLS
Fixed Effects
lnygap
-0.0728***
(-4.100)
-0.234***
(-4.391)
lnef
-0.178***
(-4.876)
demage
demtot
lnk
Control
0.00622***
(6.262)
-0.197***
(-6.001)
-0.0868**
(-2.702)
0.0150***
(3.338)
lnpopdens
lnltotal
landlock
Dummies
oil
cpv
sen
Constant
0.606***
(6.985)
-0.401***
(-3.704)
-0.537***
(-4.387)
-0.494***
(-4.256)
6.577***
(11.71)
-0.00242***
(-4.113)
-0.0901***
(-5.150)
-3.222***
(-5.026)
4.506***
(7.162)
-0.530***
(-4.506)
3.507***
(9.792)
Observations
208
313
R-squared
Adjusted R-squared
0.762
Number of countries
10
14
R-squared within model
0.371
0.566
R-squared between model
0.913
0.835
R-squared overall model
0.613
0.654
F test
28.90
11.42
Prob > F
0
0
t-statistics in parentheses (robust in the case of fixed effects) *** p<0.01, ** p<0.05, * p<0.1
Model Diagnostics
118
0.939
0.930
10
215.7
0
51
Table A2.2b: Determinants of Convergence in SADC
Variable Type
Policy
Variables
lnneq5
OLS
Pooled
lnygap
OLS
Random Effects
lnygap
-0.222***
(-6.120)
-0.0351
(-1.193)
open1
OLS
Between Effects
lnygap
-0.532**
(-2.327)
lninflation1
Institutions
lnprcl
0.0327**
(2.304)
-0.166**
(-2.545)
-0.0549*
(-1.704)
lnef
demage
-1.940***
(-3.707)
-0.0553**
(-2.479)
-0.00638*
(-1.678)
demtot
dictrans
Physical
lnk
lnpopdens
lnltotal
oil
moz
mus
zaf
Constant
OLS
Fixed Effects
lnygap
0.00759***
(5.016)
0.262***
(5.978)
-0.138***
(-3.798)
0.165***
(9.680)
0.401***
(18.00)
0.239**
(2.392)
-0.302***
(-4.752)
-1.707***
(-15.81)
-1.247***
(-11.66)
0.642
(0.949)
0.184***
(3.649)
-0.286***
(-9.104)
-0.349***
(-5.390)
0.510***
(7.454)
-1.014***
(-6.400)
-1.098***
(-4.958)
2.281**
(2.221)
-1.235**
(-2.740)
9.321***
(7.609)
265
253
254
Model Diagnostics Observations
Number of countries
13
14
R-squared
0.898
0.845
Adjusted R-squared
0.894
0.776
R-squared within model
0.471
R-squared between model
0.917
R-squared overall model
0.891
F test
640.6
12.26
Prob > F
0
0.00109
Wald Chi2
362.8
Prob > W
0
Robust t-statistics in parentheses (except for the case of between effects) *** p<0.01, ** p<0.05, * p<0.1
10.31***
(8.000)
278
12
0.657
0.652
13.21
0.000576
52
Table A2.2b (continued): Determinants of Convergence in SADC
Variable Type
Variables
Policy
inflation1
Institutions
lnprcl
2SLS
Random Effects
lnygap
2SLS
Between Effects
lnygap
2SLS
Fixed Effects
lnygap
-0.356***
(-3.216)
-0.600
(-1.633)
-5.893***
(-3.645)
-1.389*
(-2.280)
-0.101
(-1.098)
lnef
demage
demtot
Physical
lnk
lnltotal
Constant
-0.591***
(-6.474)
-0.591***
(-6.474)
-0.591***
(-6.474)
0.561***
(6.187)
8.115***
(4.910)
-0.120***
(-3.065)
-0.372***
(-4.585)
-0.372***
(-4.585)
-0.372***
(-4.585)
0.730***
(5.226)
16.42***
(4.400)
190
178
Model Diagnostics Observations
Number of countries
12
12
R-squared
Adjusted R-squared
0.690
R-squared within model
0.191
0.0726
R-squared between model
0.919
0.775
R-squared overall model
0.809
0.235
F test
24.09
10.11
Prob > F
0
0.00426
t-statistics in parentheses (robust in the case of fixed effects) *** p<0.01, ** p<0.05, * p<0.1
190
12
0.358
0.299
22.96
0
53