Is Agricultural Production Spillover the Rationale behind CAADP Framework? Spatial Panel Model Approach

John Ulimwengu, Prabuddha Sanyal
2013 Modern Economy  
The creation of a union is often rationalized on grounds of moving the equilibrium toward the first best solution whenever independent policies generate spillovers. This arises as a common agenda can significantly reduce the scope of free-riding behavior among member countries. In addition, cross-border externalities arising out of higher levels of market integration entails countries to agree on policy coordination. The present study explores the extent and magnitude of agricultural production
more » ... spillover that might validate the adoption of a common agriculture agenda among African countries. Overall, our results suggest the presence of positive and significant agricultural production spillover. No evidence of beggar-thy-neighbor or negative spillover policies was found; on average, each country received 2.5 percent growth as a result of spillover. Our results also suggest that convergence dynamics is much stronger when spillover is accounted for, which provides a rationale for a common agenda such as CAADP.
doi:10.4236/me.2013.45041 fatcat:2acnnbiuivfk3izdfe7bc2zgby