Increasing Supply of Tradable Goods in the Common Market for Eastern and Southern Africa (COMESA)
Keywords:Governance indicators, foreign direct investment, institutional quality, production, business
The author investigated the nature of institutional quality in the Common
Market for Eastern and Southern Africa (COMESA) on the basis of voice
and accountability political stability, government effectiveness, regulatory
quality, rule of law and control of corruption. The author further
investigated the existence of a link between institutional quality and factors
of production. The results show that capital, entrepreneurship and foreign
direct investment are the major determinants of production of tradable
goods in COMESA. In exception of Mauritius and Namibia (currently no
longer a member) the rest of COMESA member states have very poor
institutional quality. This affects their ability to attract foreign direct
investment hence production of tradable goods. Voice and accountability,
government effectiveness, rule of law and political stability play a major
role in increasing production of tradable goods in COMESA. Foreign direct
investment is affected by voice and accountability, rule of law and political
stability than any other factors. Availability of raw material is affected by
government effectiveness, regulatory quality, political stability, voice and
accountability and control of corruption. Capital is very sensitive to issues
of voice and accountability and control of corruption and regulatory quality.
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