Assessing the Impact of Ease of Doing Business and Corruption on Economic Growth for Africa Free Trade Zone (AFTZ) Member States

Bonga, Wellington G. and Mahuni, Kenneth (2018): Assessing the Impact of Ease of Doing Business and Corruption on Economic Growth for Africa Free Trade Zone (AFTZ) Member States.

Abstract

A positive economic growth is one crucial macroeconomic objective of every nation. Many countries have formed regional as well as international trading blocs in an attempt to enhance economic growth and maximise welfare of each member state, the AFTZ member states are not an exception. This paper seeks to investigate the impact of ease of doing business and corruption on economic growth of AFTZ member states. The study employed a panel data analysis for the period 2010-2016, using Stata Statistical Software. The study findings for the bloc, indicated that corruption, trading across borders, getting credit, registration of property, dealing with construction permits, and starting business have a significant impact on the bloc’s economic growth; with insolvency resolving and investor protection of concern as well. Paying attention to country effects test, with the quest for efficient results, the study further divided the AFTZ bloc into 3 groups using average GDP as the determining variable. The usual 3 panel models were run for each group, with efficiency noted from the reported adjusted R-squared and overall R-squared. The study recommends each member state to pay particular attention to the identified affecting variables for improved economic growth. The onus to improve economic wellbeing of each state does not lie on the bloc only but on individual efforts as well, since individual differences prevail. All this will enable the broader efficacy and vision of AFTZ to be realised.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Growth, Ease of Doing Business, Doing Business Indicators, Corruption, AFTZ, Panel Data Analysis
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; F - International Economics > F1 - Trade > F15 - Economic Integration; F - International Economics > F1 - Trade > F18 - Trade and Environment; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission; F - International Economics > F6 - Economic Impacts of Globalization > F63 - Economic Development; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N17 - Africa ; Oceania; N - Economic History > N4 - Government, War, Law, International Relations, and Regulation > N47 - Africa ; Oceania; N - Economic History > N9 - Regional and Urban History > N97 - Africa ; Oceania; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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