Economic Growth, Good Governance and Agricultural Development in the West African Economic and Monetary Union (WAEMU) Countries: Analysis of the Impact of Official Development Assistance

The main objective of this research was to analyze the effects of official development assistance (ODA) on economic growth and agricultural development in WAEMU countries, with the exception of Guinea-Bissau. The study focused on a twenty-year period from 2000 to 2020. To achieve this objective, we use very recent econometric methods, including panel data cointegration. We estimated our model using the Pooled Mean Group (PMG) method. The results from our estimations show that ODA negatively influences economic growth while its impact is positive on agricultural development in WAEMU countries in the long term. Also, political stability and control of corruption positively impact agricultural development. On the other hand, the interaction of ODA in a context of governance on GDP per capita is not significant. Thus, the relationship between official development assistance and economic growth must be supported by good governance. In light of our results, the resulting policy implications for improving the use of official development assistance flows in these countries are as follows: (i) Promote the quality of governance, which is a condition for the effectiveness of official development assistance in developing countries (improve transparency and management of flows received by creating aid monitoring committees in the national assemblies of each country, reduce corruption); (ii) Invest in profitable sectors such as agriculture through the use of agricultural technologies and by training farmers in advanced cultivation techniques; (iii) Strengthen human capital by training competent national experts capable of implementing policies adapted to the realities of the area; (iv) Strengthen trade openness policies to facilitate trade within WAEMU countries.