Felix Fofana N’Zue, Economic Policy Analysis Unit, ECOWAS
The objective of this study is to contribute to the understanding of the relationship between economic freedom and economic performance as it applies to ECOWAS countries. It used the Heritage Foundation measure of economic freedom and analysed the impact of change in economic freedom on economy-wide, agricultural, industrial and service sectors’ performances.
A dynamic panel data estimation approach was used. Results suggested that change in economic freedom was positively related to economy-wide performance, inclusive of agricultural and service sectors’ in the ECOWAS countries. Change in economic freedom often preceded agricultural sector’s enhanced performance but not the other way round. However, change in economic freedom has been detrimental to the industrial sector’s performance.
Keywords: Economic freedom, Economic performance, Panel data, causality
JEL classification : O10, O40, C23