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Does the G20 compact with Africa foster economic growth: Evidence from synthetic differences

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  • Fleuriet, Vincent
  • Vertier, Paul

Abstract

The G20 Compact with Africa (CwA) is a platform initiated in 2017 by the German Presidency of the G20. It aims at fostering economic activity through higher investment, for countries implementing a package of reforms relating to macroeconomic framework, financial sector and business environment. In this paper, we test whether this initiative managed to foster economic activity between 2017 and 2021 in the 12 African countries that entered the CwA over this period. We show that the CwA is likely to have induced an increase of 5pp in the growth rate of GDP per capita on average for the period, driven by an increase in exports, public consumption and FDI inflows. These estimates are broadly robust to placebo tests.

Suggested Citation

  • Fleuriet, Vincent & Vertier, Paul, 2024. "Does the G20 compact with Africa foster economic growth: Evidence from synthetic differences," Economics Letters, Elsevier, vol. 236(C).
    • Handle: RePEc:eee:ecolet:v:236:y:2024:i:c:s0165176524000533
    DOI: 10.1016/j.econlet.2024.111570
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    References listed on IDEAS

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    1. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    2. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    3. Damian Clarke & Daniel Paila~nir & Susan Athey & Guido Imbens, 2023. "Synthetic Difference In Differences Estimation," Papers 2301.11859, arXiv.org, revised Feb 2023.
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    1. Dragomirescu-Gaina, Catalin & Fassas, Athanasios P. & Philippas, Dionisis, 2024. "A Chinese clout on energy exports some countries cannot shake off," Energy Economics, Elsevier, vol. 134(C).

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    More about this item

    Keywords

    Investment; Growth; Africa;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania

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