The Causal Effect of International Trade on Poverty in West Africa

Abstract

The study examined the relationship between trade and migration and poverty and income inequality in the West African sub-region. The study included all the 16 countries within the West African bloc. The study adopted approaches such as pooled OLS, Fixed Effect models, PPML, two-stage least square instrumental variable estimator and PPML-2SLS. The study explored the correlation between international trade and poverty and also evaluated the effect of international trade on poverty and inequality in West Africa. The result indicated that there was negative correlation between international trade and poverty. In addition, it was observed regional trade flows reduce headcount poverty in the sub-region. The recommends that there should be liberalization in the subregion as that results in reduction in poverty. It will be worth exploring the link between trade and illegal migration on macroeconomic indicators of countries in the sub-region

Keywords: Povert, Income Inequality, International trade, Migration, Dummy Variable

DOI: 10.7176/JESD/13-8-10

Publication date: April 30^th 2022