Internationale Zeitschrift für Wirtschafts- und Managementwissenschaften

Effects of the Quality of Public Policies and Institutions on Labour Productivity in ECOWAS

Abstract

Dimitri Sanga, Ehouman Williams Venance Ahouakan and N'goran Assigno Frejus Adje

Like East and Central African sub-regions, West Africa performs modestly both in terms of productivity and governance. Low labour productivity in West Africa as well as the resulting lack of competitiveness, poverty and insecurity, increases the probability for this sub-region to not achieve the SDGs by 2030. It is therefore necessary to find ways to improve this. This study is part of this perspective. Beyond the traditional determinants of labour productivity, such as, physical capital stock, human capital and technical progress, it examines whether the quality of public policies and the institutional environment are likely to explain the performances recorded in terms of productivity in ECOWAS countries. Relying upon a neoclassical framework of reference, an econometric analysis is used for this purpose. The results confirm that improvement in the quality of public policies and institutions are overall associated with higher levels of productivity in these countries. However, some specificity is observed at the sectorial levels. Furthermore, the econometric analysis highlights a positive effect of investment and human capital on this productivity. The study recommends that the ECOWAS member states should improve their institutional quality and public policies. This could enable them to derive greater benefit from the implementation of the African Continental Free Trade Area agreement (ACFTA).