Per capita income and health outcome convergence in Economic Community of West African States

Abstract

Whether trade policy agreements within Africa leads to income and also health outcome convergence is unknown. The role of governance quality in this regard is also not commonly explored. Using data from the Economic Community of West African States (ECOWAS) this study provides empirical evidence whether countries within the trade bloc of the ECOWAS exhibit convergence in per capita income and health with focus on the role of governance quality. Data were obtained from the World Development Indicators and World Governance Indicators provided by the World Bank. Estimates are presented using the Generalized Method of Moments and the Pooled Least Squares. The results showed existence of 𝛽 convergence in per capita income and health with faster rates in income relative to health. There were also indications of σ-convergence in health outcome except for life expectancy. σ-convergence results however, showed divergence in per capita income. The results suggest strong influence of governance quality in attaining convergence not only for per capita income but also health outcome. Findings for convergence, strongly suggest that economic policy agreements in developing economies such as those of the ECOWAS engender sustainable development in income and health. Policy focus on improving economic performance in Africa should pursue actions that encourage trade bloc operations within the region. Efforts should also be targeted at improving the quality of governance.