West African Monetary Union and Colonial Economic Ties

This paper examines the effects inherited economic and monetary colonial ties exert on the monetary unification of the Economic Community of West African States. Specifically, the study substituted in a Structural Vector Auto Regression framework domestic supply shocks with import supply price shocks from the former colonial economies (France, Portugal, and the UK), the regional economy, and the global economy to assess their effects on member countries’ monetary convergence variables. Empirical results provide evidence that convergence variables respond more symmetrically to supply price shocks from the former colonial economies and the global economy than from the regional economy. The predominance of pairs of former French colonies with symmetric responses to supply shocks can be attributed to the Communauté Financière Africaine franc effect. Besides, symmetric convergence variables’ responses by countries of different colonial heritages can be due to the proximity effect. The variables’ impulse responses to a unit of regional price shock cluster member countries with comparable paths into subgroups. However, the wide gaps between the magnitudes of their responses reveal the absence of inflation, fiscal policy, and monetary convergences. Finally, inherited colonial economic and monetary ties are not conducive to the monetary unification of the region. Unione monetaria dell’Africa dell’ovest e legami economici coloniali Questo articolo esamina gli effetti che i legami economici e monetari ereditati dalle ex-colonie esercitano sull’unificazione degli stati della Comunità Economica dell’Africa occidentale. Precisamente lo studio, nell’ambito di un modello SVAR (Structual Vector Autoregressive Regression), sostituisce gli shock di offerta interna con gli shock dei prezzi delle importazioni dagli ex-paesi colonizzatori (Francia, Portogallo e Regno Unito), dei prezzi dell’economia regionale e con quelli dell’economia globale al fine di valutare i loro effetti sugli indicatori di convergenza monetaria dei paesi membri. (per leggere tutto il riassunto scaricare il file Pdf)