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Trade Intensity, Fiscal Integration and Income Inequality in ECOWAS

Author

Listed:
  • Dout Hamitande

    (LEAMA, University of Lomé, 01BP1515, Lomé, Togo)

  • Kebalo Léleng

    (University of Québec Trois-Rivières, Trois-Rivières, Canada)

Abstract

This paper analyzes the income inequality effect of economic integration in ECOWAS by decomposing economic integration into two dimensions: trade and fiscal integration approximated respectively by trade intensity and fiscal convergence. For robustness purposes, we use different metrics for each dimension. We also consider the introduction in the region of the growth and convergence pact in the analysis of fiscal integration effect on income inequality. The analysis covers the period 1990–2018. For the empirical evidence, the generalized method of moment is used. The results obtained are robust and reveal that improving regional economic integration has a reducing effect on income inequality. Taken individually, trade integration and fiscal integration contribute to reducing income inequality. However, taken together, the reducing effect of economic integration on income inequality is more pronounced. Besides, the results indicate that fiscal integration has more contributed to the reduction of income inequality since the introduction of the first fiscal convergence pact in the region in 2000 than before. For reducing income inequality, our analysis recommends to ECOWAS countries to take steps to remove barriers to regional trade on the one hand, and on the other hand, to converge together on the fiscal front.

Suggested Citation

  • Dout Hamitande & Kebalo Léleng, 2021. "Trade Intensity, Fiscal Integration and Income Inequality in ECOWAS," Statistics, Politics and Policy, De Gruyter, vol. 12(2), pages 375-394, December.
    • Handle: RePEc:bpj:statpp:v:12:y:2021:i:2:p:375-394:n:5
    DOI: 10.1515/spp-2021-0008
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    More about this item

    Keywords

    economic integration; trade integration; fiscal integration; income inequality; growth and convergence pact; ECOWAS;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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