INSTITUTIONAL QUALITY AND ECONOMIC RESILIENCE: PANACEA FOR POTENTIAL LONG-TERM ECONOMIC GROWTH IN WEST AFRICA

Abstract

High and sustained economic growth can be achieved through strong institutions and the development of resilient economies. This exploratory study used data from World Development and Governance Indicators to attempt the construction of a macroeconomic stability index and economic resilience index for West African countries following the work of Briguglio et al (2009). It further used the indices constructed to examine the effect of resilience on growth and the modifying effect of institutional quality in this relationship. It found that from the index developed, there was a low level of resilience among West African countries with the highest at 46.4%. Institutional quality was found to positively and significantly influence the effect of resilience on economic growth in countries within the region and thus recommends strengthening the institutional framework for countries in the region through the ECOWAS community strategy. Also being armed with the knowledge of each member states' economic resilience level will help set the agenda for investment decisions that will engender economic prosperity.