Measuring Capital Flight in West African Economic and Monetary Union Countries: The Role of Governance
International Journal of Economics and Management Studies |
© 2021 by SSRG - IJEMS Journal |
Volume 8 Issue 9 |
Year of Publication : 2021 |
Authors : Kuamvi Sodji |
How to Cite?
Kuamvi Sodji, "Measuring Capital Flight in West African Economic and Monetary Union Countries: The Role of Governance," SSRG International Journal of Economics and Management Studies, vol. 8, no. 9, pp. 7-21, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I9P102
Abstract:
This paper presents an updated methodology for estimating capital flight using the residual method in countries of the West African Monetary Union zone. The results indicate that four countries have experienced significant real capital flight over the last four decades (1970-2016), reaching $58655.28 million (Côte d'Ivoire, Niger, Burkina Faso, and Senegal). To this end, given the importance of governance in the zone, the paper extends the debate on its role in capital flight over the period 1996-2016. Governance is clustered by principal components analysis, and the results suggest that political stability, voice, and accountability reduce capital flight while their collective effect through political governance is not significant in the long run. Overall, the fight against trade distortions is very important in WAEMU, and the most effective weapon, in the long run, is the improvement of political governance through the priority of the Washington Consensus.
Keywords:
Capital flight, Governance, Residual method, WAEMU.
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