This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the authors and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the authors and are published to elicit comments and to further debate. This paper analyzes the impact of political instability in Côte d'Ivoire on WAEMU trade over 1990-2007, applying panel econometric techniques to a gravity model of trade within WAEMU and between WAEMU and the rest of the world. The paper finds that intra-regional trade represents a small share of total WAEMU trade and that Côte d'Ivoire accounts for around half of that total, highlighting the importance of this country for the region. The political instability in Côte d'Ivoire has led to an increase in transaction costs, making it relatively more costly for member countries to trade with each other than with the rest of world. Instability has also resulted in a diversion of trade away from Côte d'Ivoire in favor of other countries equipped with ports and in a reduction of WAEMU overall potential trade. For Côte d'Ivoire alone, lost trade is estimated at around 40 percent of its potential trade with the WAEMU in the absence of instability. With a normalization in Côte d'Ivoire, enhanced security and further integration would be essential to achieve higher levels of trade and growth in the WAEMU region.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.