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Does trade openness improve or worsen public governance in sub-Saharan Africa?

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  • Gandjon Fankem, Gislain Stéphane
  • Feyom, Cédric

Abstract

The literature on the effect of trade openness on public governance shows contrasting results. Using a renewed empirical strategy, we contribute to the understanding of this indeterminacy by studying the influence of trade openness on public governance in Sub-Saharan Africa. We also examine how this effect varies with structural characteristics that may be subject to reforms. In this respect, we use an original measure of trade openness. We consider public governance and its three dimensions, namely economic governance, political governance, and institutional governance. Overall, we find that trade openness improves public governance, political governance, and economic governance. On the other hand, it worsens institutional governance. Moreover, these effects of trade openness on the dimensions of public governance depend on the defined levels of technology transfer, foreign direct investment, and natural resources. Our results are robust to different openness and governance indicators, alternative specifications, study periods, endogeneity, and cross-sectional dependence. Above all, they highlight the interest of dissociating public governance to understand the contrast observed in the empirical literature.

Suggested Citation

  • Gandjon Fankem, Gislain Stéphane & Feyom, Cédric, 2024. "Does trade openness improve or worsen public governance in sub-Saharan Africa?," International Economics, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:inteco:v:178:y:2024:i:c:s2110701724000258
    DOI: 10.1016/j.inteco.2024.100502
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    More about this item

    Keywords

    Trade openness; Public governance; Institutions; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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