Comparative Analysis of the Interlinks between Globalization, Governance and Development in African Economic Communities

Abstract

This paper examines the complex causal relationship between globalization, governance and development in African countries using a comparative approach. The sample comprises 51 countries in five groups over the period 1996–2018. The cointegration analysis shows that there is a long-run relationship between globalization, governance and human development in Africa as a whole sample. However, at regional level, such a relationship does not exist in the Economic Community of Central African States (ECCAS) bloc. In the long run, globalization and governance affect positively human development in all samples. The findings indicate also that there was unidirectional causality from globalization and governance to development at the continental level. At the regional level, there is unidirectional causality from globalization to development in East African Community (EAC) and Southern African Development Community (SADC). In these regions, there is also a bidirectional causality between governance and development. In the ECCAS, the causality runs from governance to development and from development to globalization in the Economic Community of West African States (ECOWAS). The results support no evidence of causality between the variables in North Africa (Arab Maghreb Union, AMU). Finally, the overall globalization index does not Granger-cause governance. The main implication of our study is that improving governance and development is a very challenging issue, and the impact of globalization should not be neglected.