ارتباط بین عمیق تر شدن مالی، درجه باز بودن تجاری و توسعه اقتصادی: علیت شواهد از کشورهای جنوب صحرای آفریقا

This contribution tests for causality between financial deepening, trade openness, and economic development for 16 sub-Saharan African countries. The Hsiao-Granger method is used to add to the existing empirical evidence. Only limited support is found for the popular hypothesis of finance-led growth. In general, the evidence indicates that financial deepening and trade openness have swayed economic development rather marginally. In particular, the investigated countries have failed to benefit from financial deepening. Development strategies prioritizing financial or trade sector development hence cannot be supported.

In the last decades, many developing economies have adopted development strategies that prioritize the modernization of their financial systems. The countries of sub-Saharan Africa (henceforth SSA) are no exception. Since the end of the 1980s, these countries have been interested in fostering financial development, for example, by reducing governmental intervention in national financial sectors or by privatizing banks. Such policies have been expected to promote growth through, inter alia, a higher mobilization of savings or a rise in domestic and foreign investments (e.g., Reinhart & Tokatlidis, 2003). However, the effectiveness of such policies requires a convenient causal relationship between financial and real sectors.

Drawing on conflicting considerations about the links between financial deepening, economic development, and trade openness, we tested for causality for 16 SSA countries. Inter alia, we used a principal component analysis to obtain a broad indicator of financial deepening. We employed unit root and cointegration tests to analyze the properties of the investigated time series and to identify possible long-run relationships between them. We used Hsiao’s version of testing for Granger causality within VAR/VECM frameworks due to its methodological advantages over standard causality tests. Our empirical results show that (1) finance, growth, and openness do not share significant long-run relationships for most of the sample. (2) We detect only limited support for causal interactions of financial depth and economic development. In particular, there is only sparse support for the hypothesis of finance-led growth. For most countries we detect either a demand-following or an insignificant relationship between finance and growth. We thus provide support for more skeptical views on the finance-growth nexus that does not identify universally valid finance-growth links. (3) While there is ample evidence of a nexus between finance and openness, we are not able to identify any predominant relationship for the investigated SSA countries. There is also only limited evidence to suggest that either financial deepening has promoted economic development indirectly via influencing trade openness or that openness has enhanced growth as a by-product of its impact on financial development. In the light of our results, we (4) question policies that prioritize financial and/or trade sector development. Financial deepening and (to a weaker extent) trade openness do not appear to have been crucial preconditions of economic development in SSA. Instead, we advocate a more balanced policy approach that also takes into account other fundamental development factors, for example political or macroeconomic stability, or institutional quality. A general approach toward strengthening of these factors may also help to reduce deficiencies in financial systems, so countries in SSA may benefit from financial deepening in the future. Such an approach should also help countries in SSA to gain more from trade openness.