Effects of information asymmetry and political governance on Total factor productivity in the WAEMU

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Résumé

Improving total productivity (TFP) is a major challenge within the West African Economic and Monetary Union (WAEMU). Despite research on the determi-nants of TFP in sub-Saharan Africa and other regions, certain factors that ex-plain TFP, such as information asymmetry and governance, warrant attention in the WAEMU context. This paper analyzes the effects of information asym-metry and political governance on TFP within WAEMU. Using the Fully Modi-fied Ordinary Least Squares estimator proposed by Pedroni (1996, 2000) on ag-gregate data from WAEMU countries covering the period 2003-2023, we show that information asymmetry has a direct negative effect and an indirect negative long-term effect on TFP. We also show that political governance factors, such as government stability, control of corruption, democratic accountability, socio-economic conditions, investment profile, internal conflicts, external conflicts, and military in politics, have significant direct long-term effects on TFP in this region. We therefore suggest improving information management and the qual-ity of political governance in the WAEMU.
Keywords
information asymmetry, political governance, TFP, WAEMU

Mots-clés

information asymmetry, political governance, TFP, WAEMU