Does Regional Integration within Developing Countries Really Diverge? The Southern Africa Development Community Experience on the Period 1995-2019

Abstract

This paper tests the real convergence within Southern Africa Development Community (SADC). Given that economic theory suggests that economic integration within developing countries gives rise to regional divergence, the main aim of this study is, thus, to verify whether this theory is valid for the SADC. To test this premise, we analyse real per capita income dispersion within the region and proceed to the estimation of a β-convergence model on a sample of eleven countries of the region on the period 1995-2019. Our results are irrevocable: there is no proof of catch-up within this zone during this period. This shows that the gains and costs of the integration are unequally shared among members states.