Urbanization and Economic Growth in West Africa: A Panel Data Approach

Abstract

This paper attempts to investigate the relationship between urbanization and economic growth in West Africa using as motivation the role that urbanization plays in economic growth via the provision of employment opportunities to rural migrated labour, and creation of markets in most developing countries. Using a panel regression approach on West African countries’ data from 1950 to 2005, the paper found that all the variables except one in the parsimonious, fixed effect model are significant at 10 per cent while the urbanization variable is significant at 5% level. This finding confirms a priori expectation of positive signs consistent with the neoclassical modernisation theory and confirms that economic performance in West Africa can be enhanced through sound urban development policies that support economic openness.