Regional Economic Integration and Its Impact on Income Distribution and the Poverty Level: The Case of the WAEMU Zone

Claire E. W. Yameogo; Joseph A. Omojolaibi

doi:10.2478/quageo-2022-0014

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Regional Economic Integration and Its Impact on Income Distribution and the Poverty Level: The Case of the WAEMU Zone

Quaestiones Geographicae

Volume 41 (2022): Issue 2 (June 2022)

By: Claire E. W. Yameogo and Joseph A. Omojolaibi

Open Access

|Jun 2022

Figures & Tables

GDP per capita.
Source: authors’ computation.

Regional economic integration index.
Source: authors’ computation.

Poverty headcount rate.
Source: authors’ computation.

Table 1

Definition and data sources.

Variable name	Symbol	Definition	Unit	Source
Poverty	POV	It is a situation where someone lacks the necessary resource he/she needs.	%	World Development Indicators and POVCALNET
Income inequality	GINI	It measures the distribution of wellbeing.	Index	World Development Indicators and Standardized World Income Inequality Database (Solt 2019).
Remittances	REM	It is the sum of money sent by migrants to their families at home or for saving.	%	World Development Indicators
Control of corruption	CC	It is the extent to which public officers use public power/resource for private gain. A higher value indicates a high level of corruption.	Index	Worldwide Governance Indicators
Gross domestic product per capita	GDP	It is the gross domestic product divided by population.	Constant 2010 US$	World Development Indicators
Population growth	POP	It is the annual growth rate of the population.	%	World Development Indicators
Regional economic integration	REI	It is measured with trade liberalisation (% of GDP), foreign direct investment (% of GDP), migration flow (%) and inflation rate (%, CPI).	Index	World Development Indicators, UNCTAD statistics database, United Nations Population Division

[i] Source: authors’ compilations.

Table 2

Descriptive statistics.

Variables	POV	GINI	REI	REM	GDP	CC	POP
Mean	53.612	22.059	0.000	3.689	779.831	−0.663	2.840
Median	54.468	24.288	−0.062	2.559	648.281	−0.676	2.798
Maximum	92.847	49.900	5.408	10.711	1,692.545	0.176	3.907
Minimum	10.029	−28.100	−4.583	0.226	322.778	−1.563	1.912
Std. Dev.	16.818	18.421	1.224	2.823	351.196	0.381	0.449
Skewness	−0.193	−0.064	0.254	0.959	0.601	0.074	0.558
Kurtosis	2.882	1.311	5.810	2.712	2.128	2.541	3.073
Jarque-Bera	1.355	23.911^***	67.976^***	31.370^***	18.363^***	1.935	10.411^***
Probability	0.508	0.000	0.000	0.000	0.000	0.380	0.005

Note:

*** indicates significance at 1% level.

Source: authors’ compilations.

Table 3

Correlation results

	POV	GINI	REI	REM	GDP	CC	POP
POV	1.000
GINI	−0.256	1.000
REI	−0.214	0.239	1.000
REM	−0.070	−0.175	0.222	1.000
GDP	−0.486	0.204	0.147	0.038	1.000
CC	−0.023	0.181	−0.021	−0.028	0.287	1.000
POP	0.210	−0.141	0.297	−0.183	−0.381	0.210	1.000

[i] Source: authors’ compilations.

Table 4

VIF results.

Variables	VIF	1/VIF
POP	2.14	0.467
REI	1.75	0.572
GDP	1.68	0.595
CC	1.48	0.676
GINI	1.37	0.727
REM	1.34	0.747
Mean VIF	1.63

[i] Source: author's compilations.

[ii] VIF – Variance Inflation Factor.

Table 5

Cross-sectional dependence results.

	Breusch-Pagan LM	Pesaran scaled LM	Pesaran CD
lnPOV	85.085^***	7.628^***	0.760
GINI	66.641^***	5.163^***	−0.270
REI	144.761^***	15.602^***	8.739^***
lnREM	223.665^***	26.146^***	2.875^***
lnGDP	276.497^***	33.206^***	12.214^***
CC	116.811^***	11.867^***	−0.423
POP	278.034^***	33.412^***	−0.801

Note:

*** indicates significance at 1% level.

Source: authors’ compilations.

Table 6

Panel unit root test results.

Variables	CIPS		CADF
Variables	Level	First difference	Level	First difference
lnPOV	−3.417^***	−5.345^***	−3.017^**	−3.970^***
GINI	−4.849^***	−6.420^***	−3.129^***	−4.710^***
REI	−2.959^**	−5.540^***	−2.446	−4.277^***
lnREM	−1.727	−3.885^***	−1.948	−3.322^***
lnGDP	−2.142	−4.587^***	−2.547	−3.856^***
CC	−2.174	−4.565^***	−2.031	−3.417^***
POP	−4.263^***	−4.937^***	−5.180^***	−5.568^***
Critical values	1%: −3.1 5%: −2.86 10%: −2.73		1%: −3.100 5%: −2.860 10%: −2.730

[i] Note:

[ii] ^*** and ^** indicate significance at 1%, and 5% levels, respectively. A constant and a trend are included in the tests. The results are reported at lag 1 except for population growth that used 2 lags.

[iii] Source: authors’ compilations.

Table 7

Westerlund panel cointegration test results.

Statistics	Value	Z-value	P value	Robust P value
Income distribution equation
Gt	−30.138	−83.323	0.000	0.000
Ga	−7.610	3.576	1.000	0.380
Pt	−42.230	−34.492	0.000	0.000
Pa	−7.164	2.670	0.996	0.460
Poverty equation
Gt	−4.010	−2.560	0.005	0.010
Ga	−2.350	5.513	1.000	1.000
Pt	−10.378	−2.035	0.021	0.020
Pa	−1.986	4.639	1.000	0.980

[i] Note: A constant and a trend are used with 0 lag and 0 lead.

[ii] Source: authors’ compilations.

Table 8

PMG estimation results.

Variables	GINI index		Poverty headcount
Variables	Coefficient	Std. err.	Coefficient	Std. err.
Short run
ECT	−0.760^***	0.131	0.0697	0.0971
ΔlnPOV(−1)	–	–	0.510^***	0.0369
ΔREI	−0.176	0.137	0.162	0.121
ΔEI(−1)			−0.129	0.0993
ΔGINI	–	–	−0.0191	0.0354
ΔGINI(−1)	–	–	0.0138	0.0174
ΔlnREM	−0.470	0.487	−0.263	0.171
ΔlnREM(−1)	–	–	0.338	0.222
ΔlnGDP	45.44^**	20.92	−1.456	1.114
ΔCC	1.509^**	0.695	0.0910	0.194
ΔPOP	9.780	8.824	−0.880	0.702
ΔPOP (−1)	–	–	0.931	1.396
Constant	9.221^**	4.700	0.128	0.108
Long run
REI	0.0684^*	0.0367	−0.0761^***	0.0224
GINI	–	–	−0.0475^***	0.0111
lnREM	−0.0308	0.059	0.172^***	0.0439
lnGDP	0.138	0.211	0.549^***	0.204
CC	−0.0804	0.154	0.126^**	0.0643
POP	0.753^***	0.132	1.136^***	0.213
Number of observation	192		184

[i] Note:

[ii] ^***, ^** and ^* indicate significance at 1%, 5%, and 10% levels, respectively. The optimum lag length is selected through SIC criterion. Income distribution lag length is (1 0 0 1 0 0), and those for poverty is (2 2 2 2 0 0 2).

[iii] Source: authors’ compilations.

Table 9

Time-series analysis results based on the DOLS method.

Countries	Benin		Burkina Faso		Côte d’Ivoire		Guinea-Bissau		Mali		Niger		Senegal		Togo
Countries	GINI	POV	GINI	POV	GINI	POV	GINI	POV	GINI	POV	GINI	POV	GINI	POV	GINI	POV
REI	21.72^*** (0.404)	−0.410^*** (0.0778)	13.70^*** (0.504)	−0.0439 (0.0610)	37.51^*** (0.218)	8.256^*** (0.0426)	−27.39^*** (1.284)	−1.738^*** (0.0427)	−20.88^*** (0.639)	3.868^*** (0.0848)	−4.117^*** (0.331)	−0.0763^*** (0.0125)	−6.574^*** (0.773)	4.694^*** (0.0930)	0.889^*** (0.0629)	0.0473^*** (0.00293)
GINI	–	0.434^*** (0.0261)	–	0.0161 (0.0101)	–	−0.0378^** (0.0158)	–	0.0118^*** (0.00398)	–	−0.0750^*** (0.00875)	–	0.210^*** (0.00354)	–	0.961^*** (0.0101)	–	−0.0615^*** (0.00318)
lnREM	3.935^*** (0.574)	0.430^*** (0.131)	−25.24^*** (0.729)	0.490^*** (0.0755)	−11.50^*** (1.060)	−9.812^*** (0.217)	47.94^*** (1.891)	3.426^*** (0.0643)	524.8^*** (0.886)	−2.416^*** (0.128)	−18.06^*** (1.013)	0.452^*** (0.0384)	−16.40^*** (0.710)	−14.39^*** (0.0851)	−0.405^*** (0.130)	0.246^*** (0.00541)
lnGDP	−336.6^*** (4.239)	−5.705^*** (0.952)	11.89^*** (2.466)	−1.061^*** (0.258)	96.68^*** (2.409)	4.606^*** (0.470)	180.7^*** (11.51)	−0.817^* (0.429)	−1,490^*** (3.473)	−0.0993 (0.507)	13.76^** (6.074)	−1.598^*** (0.248)	82.09^*** (3.111)	−3.765^*** (0.383)	16.14^*** (1.195)	0.421^*** (0.0520)
CC	82.29^*** (1.202)	−1.150^*** (0.235)	−1.217 (2.310)	1.367^*** (0.243)	16.78^*** (0.995)	4.571^*** (0.192)	110.2^*** (6.415)	5.054^*** (0.214)	451.2^*** (2.953)	−1.850^*** (0.383)	42.24^*** (3.598)	−3.687^*** (0.138)	12.12^*** (0.726)	−8.876^*** (0.0846)	9.481^*** (0.951)	0.00849 (0.0399)
POP	−152.2^*** (1.578)	9.313^*** (0.306)	−186.1^*** (7.143)	5.575^*** (0.770)	−106.6^*** (0.722)	−12.98^*** (0.138)	56.74^*** (5.049)	3.464^*** (0.181)	−566.3^*** (1.891)	2.314^*** (0.252)	51.68^*** (6.414)	2.547^*** (0.244)	1.946^* (1.087)	20.10^*** (0.133)	6.701^*** (0.332)	1.271^*** (0.0142)

[i] Note:

[ii] ^***, ^** and ^* indicate significance at 1%, 5%, and 10% levels, respectively. () indicates standard errors of the variables.

[iii] Source: authors’ compilations.

Table 10

Heterogeneous panel causality test results.

	lnPOV	GINI	REI	lnREM	lnGDP	CC	POP
lnPOV		−0.5599 (0.5756)	2.0470^** (0.0407)	0.4123 (0.6801)	1.1441 (0.2526)	−0.3039 (0.7612)	0.6270 (0.5307)
GINI	0.6428 (0.5204)		−0.4899 (0.6242)	0.8665 (0.3862)	0.3513 (0.7254)	−0.6080 (0.5432)	−0.1381 (0.8902)
REI	3.1594^*** (0.0016)	2.7527^*** (0.0059)		3.8692^*** (0.0000)	0.5314 (0.5951)	−0.5156 (0.6061)	0.9304 (0.3522)
lnREM	2.7370^*** (0.0062)	0.9483 (0.3430)	2.2553^** (0.0241)		2.6512^*** (0.0080)	3.2922^*** (0.0010)	−0.1016 (0.9191)
lnGDP	2.3861^** (0.0170)	0.9317^*** (0.0000)	2.5827^*** (0.0098)	2.8435^*** (0.0045)		−0.1012 (0.9033)	2.7147^*** (0.0066)
CC	−0.5047 (0.6138)	2.9592^*** (0.0031)	1.6822^* (0.0925)	2.2788^** (0.0227)	1.8482^* (0.0646)		1.2308 (0.2184)
POP	6.2131^*** (0.0000)	3.6573^*** (0.0003)	2.7282^*** (0.0064)	4.6874^*** (0.0000)	2.7159^*** (0.0066)	2.2000^** (0.0278)

[i] Note:

[ii] ^***, ^** and ^* show significance at the 1%, 5%, and 10% levels, respectively. Optimum lag length is selected through SIC criterion.

[iii] Source: authors’ compilations.

Table 11

Principal component analysis details.

Number	Value	Difference	Proportion	Cumulative value	Cumulative proportion
Panel A: Eigen values of the observed matrix
1	1.491	0.490	0.373	1.491	0.373
2	1.001	0.171	0.250	2.492	0.623
3	0.831	0.153	0.208	3.323	0.831
4	0.677	–	0.169	4.000	1.000
Panel B: Eigenvectors (loadings)
Variable	PC1	PC2	PC3	PC4
REI1	0.558	0.448	0.173	−0.677
REI2	0.550	0.398	−0.404	0.613
REI3	0.483	−0.416	0.708	0.304
REI4	−0.391	0.684	0.552	0.272
Panel C: Ordinary correlations
	REI1	REI2	REI3	REI4
REI1	1.000
REI2	0.297	1.000
REI3	0.178	0.119	1.000
REI4	−0.064	−0.121	−0.186	1.000

[i] Source: authors’ compilations.

References

Authors

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Articles in this issue

DOI: https://doi.org/10.2478/quageo-2022-0014 | Journal eISSN: 2081-6383 | Journal ISSN: 2082-2103 (formerly 0137-477X)

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Language: English

Page range: 21 - 35

Submitted on: Sep 12, 2021

Published on: Jun 24, 2022

Published by: Adam Mickiewicz University

In partnership with: Paradigm Publishing Services

Keywords:

economic integration,

poverty,

income inequality,

remittances,

WAEMU,

PMG

JEL:

F15,

D31,

I32

Related subjects:

Geosciences,

Geography

© 2022 Claire E. W. Yameogo, Joseph A. Omojolaibi, published by Adam Mickiewicz University
This work is licensed under the Creative Commons Attribution 4.0 License.

Volume 41 (2022): Issue 2 (June 2022)

Regional Economic Integration and Its Impact on Income Distribution and the Poverty Level: The Case of the WAEMU Zone

Figures & Tables

Fig. 1

Fig. 2

Fig. 3

Table 1

Table 2

Table 3

Table 4

Table 5

Table 6

Table 7

Table 8

Table 9

Table 10

Table 11

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