preferential trade agreements and quality of government in sub-saharan africa

126 Pages·2016·1.69 MB·English

TThhee UUnniivveerrssiittyy ooff SSoouutthheerrnn MMiissssiissssiippppii
TThhee AAqquuiillaa DDiiggiittaall CCoommmmuunniittyy
Dissertations
Spring 5-1-2016
PPrreeffeerreennttiiaall TTrraaddee AAggrreeeemmeennttss aanndd QQuuaalliittyy ooff GGoovveerrnnmmeenntt iinn SSuubb--
SSaahhaarraann AAffrriiccaa
Sharon Camara
University of Southern Mississippi
Follow this and additional works at: https://aquila.usm.edu/dissertations
Part of the African Studies Commons, Growth and Development Commons, International Economics
Commons, and the Regional Economics Commons
RReeccoommmmeennddeedd CCiittaattiioonn
Camara, Sharon, "Preferential Trade Agreements and Quality of Government in Sub-Saharan Africa"
(2016). Dissertations. 255.
https://aquila.usm.edu/dissertations/255
This Dissertation is brought to you for free and open access by The Aquila Digital Community. It has been accepted
for inclusion in Dissertations by an authorized administrator of The Aquila Digital Community. For more
information, please contact [email protected].
The University of Southern Mississippi

PREFERENTIAL TRADE AGREEMENTS AND QUALITY OF
GOVERNMENT IN SUB-SAHARAN AFRICA

by
Sharon McKenna Camara

Abstract of a Dissertation
Submitted to the Graduate School
of the University of Southern Mississippi
in Partial Fulfilment of the Requirements
For the Degree of Doctor of Philosophy

May 2016
ABSTRACT
PREFERENTIAL TRADE AGREEMENTS AND QUALITY OF
GOVERNMENT IN SUB-SAHARAN AFRICA
by Sharon McKenna Camara
May 2016
Objectives. Sub-Saharan African (SSA) nations have made concerted attempts at
economic integration and openness with use of preferential trade agreements (PTAs)
beginning in the latter half of the 1990s. These changes could result in increases in trade
and growth. The World Bank’s Good Governance indicators are designed to assess the
quality of institutions in a given country. The objective is to assess the impact of PTAs
and Good Governance indicators on trade in SSA nations. Methods. Data on trade was
generated based on exports defined by the International Monetary Fund’s (IMF)
Direction of Trade statistics, and both OLS and Tobit regression analysis was conducted
to assess the impact of PTAs and Good Governance compared on growth. Results. The
data demonstrates that PTAs have a negative impact on trade and that good governance
does positively influence trade. Conclusion. This study shows that PTAs are a deterrent
to trade, which bears further analysis of how to encourage growth in SSA countries, and
demonstrates that governance is an important factors in SSA trade. Further infrastructure
development as recommended by the International Trade Centre (2012) may provide new
opportunities for growth.
ii
COPYRIGHT BY
SHARON MCKENNA CAMARA
2016
PREFERENTIAL TRADE AGREEMENTS AND QUALITY OF
GOVERNMENT IN SUB-SAHARAN AFRICA
by
Sharon McKenna Camara
A Dissertation
Submitted to the Graduate School
and the Department of Political Science, International
Development, and International Affairs
at The University of Southern Mississippi
in Partial Fulfillment of the Requirements
for the Degree of Doctor of Philosophy
Approved:
________________________________________________
Dr. Shahdad Naghshpour, Committee Chair
Professor, Political Science, International Development, and International Affairs
________________________________________________
Dr. Joseph J. St. Marie, Committee Member
Associate Professor, Political Science, International Development, and International
Affairs

________________________________________________
Dr. Robert Pauly, Committee Member
Associate Professor, Political Science, International Development, and International
Affairs

________________________________________________
Dr. David Butler, Committee Member
Professor, Political Science, International Development, and International Affairs

________________________________________________
Dr. Karen S. Coats
Dean of the Graduate School
May 2016
ACKNOWLEDGMENTS
Appreciation is given to the following members of my committee and advisors
who have supported me throughout my time at Southern Miss. Appreciation is given to
my chair and advisor, Shahdad Naghshpour, Ph.D., my prior advisor, Edward Sayre,
Ph.D., members of my committee, J.J. St. Marie, Ph.D., David Butler, Ph.D., and Robert
Pauly, Ph.D. I am also exceedingly grateful to the support and advice of Jennie Raymond,
Ph.D. and Carl Hudson, Ph.D.
iii
TABLE OF CONTENTS

ABSTRACT………………………………………………………………………………ii
ACKNOWLEDGMENTS…………...…………………………………………..…….…iii
LIST OF TABLES………………...…………………………………………..………….iv
LIST OF ILLUSTRATIONS……...…………………………………………..…………..v
CHAPTER
I. INTRODUCTION………….…...………………..……….………………1
Hypotheses
II. LITERATURE REVIEW………………………….……………………...9
III. METHODS…………….……………………………..………………….43
Gravity Model
Hypotheses
Variables
Methodology
IV. ANALYSIS……………………………………..………………………..62
V. CONCLUSION………………………………….……………………...101
Contributions of this Research
Limitations of this Research
Implications for Future Research

REFERENCES…………………………………………………………………………109
iv
LIST OF TABLES
Table
2.1. Members of Selected Sub-Saharan African Regional Trade Agreements…….…20
2.2. Comparison of Gravity Model Studies……………………………………..……23
2.3. Prisoner’s Dilemma Matrix Hughes (2007)…………...…………………………26
3.1. Total Exports to Sub-Saharan Africa and to World by Country, 2001-2005……52
3.2. GDP for Selected Countries, 1980, 1990, 2000, 2010 with percent growth 1980 to
2010………………………………………………………………………………55
3.3. Descriptive statistics 2010…………….......……………………………………..59
3.4. Countries included in the analysis……………………...………………………..61
4.1. Lowest and highest growth SSA countries, 1980 to 2010...…………………..…73
4.2. Descriptive Statistics of the Dependent and Independent Variables for Trade
Analysis, 2010……………………………………………………………………77
4.3. Impact of SSA Preferential Trading Agreements (PTA) on International Trade,
2010 and 2000, OLS Regression…………………………..…………………….78
4.4. Analysis of multicollinearity…………….……………………………………….80
4.5. Impact of SSA Preferential Trading Agreements (PTA) on International Trade,
1990 and 1980, OLS analysis………………………………………………...….83
4.6. Impact of SSA Preferential Trading Agreements (PTA) on International Trade,
2010 and 2000 – TOBIT ANALYSIS……...……………………………………86
4.7. Impact of SSA Preferential Trading Agreements (PTA) on International Trade,
1990 and 1980. TOBIT ANALYSIS……………...……………………………..88
4.8. Impact of government quality on International Trade (average of six Government
Quality Indicators), 2010 and 2000, OLS Analysis……………………………..90
4.9. Impact of government quality on International Trade (average of six Government
Quality Indicators), 2010 and 2000. TOBIT Analysis…………………………..91
v
4.10. Impact of government quality on International Trade six Government Quality
Indicators), 2010 and 2000. OLS Analysis……………………………………...94
4.11. Impact of government quality on International Trade six Government Quality
Indicators), 2010 and 2000. TOBIT Analysis….………………………………..96
4.12. Impact of preferential trade agreements (PTA) and government quality on
International Trade (average of six Government Quality Indicators), 2010 and
2000. OLS Analysis……………………...………………………………………99
4.13. Impact of Sub-Saharan Africa (SSA) preferential trade agreements (PTAs) and
government quality on International Trade (average of six Government Quality
Indicators), 2010 and 2000. TOBIT Analysis……………………………………..102

vi
LIST OF ILLUSTRATIONS
Figure
2.1. Non-cooperative Nash Equilibrium……………………………………..…….…27
2.2. SSA Countries with no tariffs……..……………………………………………..28
2.3. Trade negotiations – both countries have tariffs……...………………………….29
2.4. Trade negotiations with Unrecorded Trade………...……………………………31
2.5. SSA trade negotiations – one country has tariffs, the other does not……………33
2.6. Trade negotiations with Unrecorded Trade…………………….………………..34
Chart
4.1. Average GDP vs Growth, SSA Countries, 2001 to 2005 (removed outlier
Equatorial Guinea with 7000% growth)………………..………………………..72
4.2. Average GDP per person and percent growth from 1980 to 2010 (removed outlier
Equatorial Guinea with 7000% growth)…………………,,,…………………….74

vii