De Jure Versus De Facto Trade Openness and Growth Dynamics in Economic Community of West African States (ECOWAS): Do Institutions Matter?”

Trade reforms abound across West Africa, yet their growth pay-off remains stubbornly uneven. Do institutions determine whether policy openness translates into real integration and higher incomes in ECOWAS? This study addresses that question by distinguishing de jure (policy-based) from de facto (flow-based) trade openness and testing the moderating role of institutional quality. Using a balanced panel of fifteen ECOWAS economies over 2000–2022, we assemble secondary annual data from WDI, UNCTAD and the Fraser Institute. Methodologically, we estimate pooled OLS, select Random Effects via a Hausman test, and implement Pooled Mean Group (PMG) estimators to separate short-run from long-run effects. De jure openness, proxied by the mean tariff rate, is positively and significantly associated with economic growth in the long run (PMG), whereas de facto openness (trade/GDP) is insignificantly related to growth. Institutional quality (control of corruption) exerts a direct positive effect and strengthens the impact of both de jure and de facto openness in interaction models. Foreign direct investment and exchange rate appreciation are also positively associated with income in the Random Effects specification. The study contributes theoretically by integrating an institutional-augmented endogenous growth lens to explain why policy commitments yield divergent outcomes, and practically by showing that durable gains from AfCFTA and ECOWAS schemes hinge on credible governance and trade-facilitation reforms. Policymakers should prioritise institutional strengthening and stable macroeconomic settings to convert legal liberalisation into sustained, inclusive growth.

Keywords

De facto trade openness; De jure trade openness

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De Jure Versus De Facto Trade Openness and Growth Dynamics in Economic Community of West African States (ECOWAS): Do Institutions Matter?”

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