Comparative Analysis of AGOA and EBA Impacts: Evidence from West Africa 131
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and 2014–16); (b) “improved” (countries with average annual 1995– 2008 GDP growth below the top tercile but 2014–16 growth greater than the top tercile); (c) “slipping” (countries with average annual 1995–2008 GDP growth exceeding the bottom tercile but 2014–16 growth below the bottom tercile); and (d) “stuck in the middle” (countries with 2014–16 average annual GDP growth exceeding the bottom tercile but lower than the top tercile in both periods). The Cotonou Agreement is a treaty between the EU and the African, Caribbean and Pacific Group of States (ACP), under which a new scheme called the Economic Partnership Agreements (EPAs) took effect in 2008. This EPA provides reciprocal trade agreements whereby the EU provides duty-free access to its markets for ACP exports, and the ACP countries provide duty-free access to their own markets for EU exports. We did not include the entire universe of trading partners because of the computational limits given the estimation method used. BACI is the French acronym of “Base pour l’Analyse du Commerce International.” A critical issue is endogeneity. AGOA and EBA coverage (product and country eligibility) is endogenous, given reliance on economic or governance performance that can be affected by trade. We tried instrumenting for this with the United Nations Development Programme’s Human Development Index and the World Bank’s Worldwide Governance Indicators on corruption, but we could not reach any conclusion because of the multicollinearity of these instruments with many of the independent variables. We cannot estimate the EBA’s effect in the panel specification of equation (3.1) because of multicollinearity between the EBA variable and the fixed effects included in the panel estimation. The G-20 Compact with Africa was launched in 2017 to promote private investment in Africa, including in infrastructure. Its primary objective is to increase attractiveness of private investment through substantial improvements in the macro, business, and financing frameworks (“About the Compact with Africa,” G-20 Compact with Africa website: https://www.compactwithafrica.org/content/compact withafrica/home.html). Martin, Mayer, and Thoenig (2008) show that countries with a lot of economic interaction with their neighbors are less likely to engage in an armed conflict.
References Anderson, J. E., and E. van Wincoop. 2003. “Gravity with Gravitas: A Solution to the Border Puzzle.” American Economic Review 93 (1): 170–92.
