Abstract
This study analyzes the relationship between financial development and economic growth on the one hand and the link between employment level and economic growth on the other hand in the context of financial liberalization. Also the question of the role of the institutional factors in the facilitation of the credit granting in the eight (08) countries of the WAEMU is approached. In doing so, strategies based on conventional fixed effects methods, with correction of Driscoll-Kraay (1998), Pooled Mean Group (PMG) of Pesaran et al. (1995, 1999) and spatial autoregressive models (SAC) are used to estimate the different equations over the period 1990-2015. The results suggest that financial development is positively associated with economic growth in WAEMU countries while an improvement in the level of employment stifles economic development. The results show that there is a positive and significant correlation between quality of democratic institutions and economic growth whatever the indicators of financial development considered except the money supply. The study recommends a strengthening of the financial development with a possible greater regularity.
Highlights
Studies on the relationship between financial development and economic growth continue to interest economists both theoretically and empirically
These are the factors relating to the socio-political crises in Ivory Coast, Guinea-Bissau and Burkina Faso combined with the difficulties of public finances, the evolution of oil prices and raw materials exported by the Member States of West African Economic and Monetary Union (WAEMU) and climatic hazards that may affect the results of agricultural campaigns
The index of democracy (DEM) ranges from (-10) for the least democratic regimes to (+10) for the most democratic regimes. (QDI) is a variable measuring the quality of democratic institutions whose index value is between (-10) and (+10): the higher the index, the higher the democratic institutions which are of good quality
Summary
Studies on the relationship between financial development and economic growth continue to interest economists both theoretically and empirically. OF THE BANKING SECTOR IN WAEMU The West African Economic and Monetary Union (WAEMU) brings together the former French colonies of West Africa, namely Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal and Togo, and Guinea Bissau, which was a Portuguese colony. The analysis of the internal and external economic environment highlights vulnerabilities that could hinder the achievement of regional economic prospects and degrade the situation of banks These are the factors relating to the socio-political crises in Ivory Coast, Guinea-Bissau and Burkina Faso combined with the difficulties of public finances, the evolution of oil prices and raw materials exported by the Member States of WAEMU and climatic hazards that may affect the results of agricultural campaigns. The banking system in the area has evolved since 2000 in an environment characterized by the slowdown in regional economic activity, due in part to the negative effects of the socio-political context in some countries of the Union
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