Published on April 2021 | Institutional Economics

Economic Freedom and Human Development in ECOWAS: Does Political-Institutional Strength Play a Role?

In this article, we examined the role political-institution strength plays in the relationship between economic freedom and human development, using the 15 ECOWAS countries and two sub-samples (Francophone and Anglophone countries) within the region. We used the Pooled Mean Group ARDL estimations to examine the long and short-term dynamic relationships. Before conducting the Pooled Mean Group estimations, we conducted the multicollinearity, heterogeneity, and cross-sectional dependence tests. Our findings show that political-institutional strength in ECOWAS and Francophone ECOWAS countries played a very significant moderating role on the effect of economic freedom on human development in the long run. The case is however different in Anglophone ECOWAS countries because the impact of the interactive terms is insignificant. Also, our findings show that the interaction of political-institutional strength and economic freedom has no significant impact in the short run in ECOWAS.