TITLE:
Is Agricultural Production Spillover the Rationale behind CAADP Framework? Spatial Panel Model Approach
AUTHORS:
John Ulimwengu, Prabuddha Sanyal
KEYWORDS:
CAADP; Agricultural Growth; Spatial Panel Model; Spillover; Convergence
JOURNAL NAME:
Modern Economy,
Vol.4 No.5,
May
31,
2013
ABSTRACT:
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
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.