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Toward the African Continental Free Trade Area: The Effects of Economic Integration and Democracy on Real Misalignments across Exchange Rate Regimes

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dc.contributor.authorOwoundi Fouda, Ferdinand
dc.contributor.authorAvom, Desire
dc.contributor.authorKuete, Flora Yselle
dc.date.accessioned2021-02-18T14:46:27Z
dc.date.available2021-02-18T14:46:27Z
dc.date.issued2021-02
dc.description.abstractThis paper evaluates the role of economic integration and democracy in rationalizing differences in real exchange rate misalignments across exchange rate regimes in Africa. To this end, the paper derives competing indexes of misalignment using modern cointegration techniques while accounting for cross-sectional dependence. The findings indicate that fixed regimes per se are not prone to more misalignments, as institutional quality and economic links with foreign partners critically matter in explaining the observed discrepancies. Furthermore, when distinguishing between African and international partners in investment agreements, the extent of misalignment differs according to the level of democracy, as democratic countries can afford intermediate regimes, while for weak democracies, fixed regimes are required to curb disequilibria. Finally, membership in a regional economic community significantly reduces the magnitude of misalignments. The results imply that the quality of institutions, more than the type of the exchange rate regime, is called into question and should be the focus of efforts ahead of successful implementation of the African Continental Free Trade Area.en
dc.identifierhttp://documents.worldbank.org/curated/en/451191613569046516/Toward-the-African-Continental-Free-Trade-Area-The-Effects-of-Economic-Integration-and-Democracy-on-Real-Misalignments-across-Exchange-Rate-Regimes
dc.identifier.doi10.1596/1813-9450-9548
dc.identifier.urihttps://hdl.handle.net/10986/35144
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 9548
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectACFTA
dc.subjectFREE TRADE AGREEMENT
dc.subjectREGIONAL INTEGRATION
dc.subjectEXCHANGE RATE REGIME
dc.subjectDEMOCRACY
dc.subjectINVESTMENT AGREEMENT
dc.subjectTRADE AND INVESTMENT
dc.subjectAFRICAN CONTINENTAL FREE TRADE AGREEMENT
dc.titleToward the African Continental Free Trade Areaen
dc.title.subtitleThe Effects of Economic Integration and Democracy on Real Misalignments across Exchange Rate Regimesen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleToward the African Continental Free Trade Area: The Effects of Economic Integration and Democracy on Real Misalignments Across Exchange Rate Regimes
okr.date.disclosure2021-02-17
okr.date.doiregistration2025-04-10T11:58:40.457758Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/451191613569046516/Toward-the-African-Continental-Free-Trade-Area-The-Effects-of-Economic-Integration-and-Democracy-on-Real-Misalignments-across-Exchange-Rate-Regimes
okr.guid451191613569046516
okr.identifier.doi10.1596/1813-9450-9548
okr.identifier.externaldocumentum090224b0882d9790_1_0
okr.identifier.internaldocumentum32839983
okr.identifier.reportWPS9548
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/451191613569046516/pdf/Toward-the-African-Continental-Free-Trade-Area-The-Effects-of-Economic-Integration-and-Democracy-on-Real-Misalignments-across-Exchange-Rate-Regimes.pdfen
okr.region.administrativeAfrica
okr.region.geographicalSub-Saharan Africa
okr.statistics.combined1565
okr.statistics.dr451191613569046516
okr.statistics.drstats828
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicInternational Economics and Trade::International Trade and Trade Rules
okr.topicInternational Economics and Trade::Trade and Multilateral Issues
okr.topicInternational Economics and Trade::Trade and Regional Integration
okr.unitMacroeconomics, Trade and Investment Global Practice
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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