Is Agricultural Production Spillover the Rationale behind CAADP Framework? Spatial Panel Model Approach

Copyright © 2013 John Ulimwengu, Prabuddha Sanyal. This is an open access article distributed under the Creative Commons At-tribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is prop-erly cited. The creation of a union is often rationalized on grounds of moving the equilibrium toward the first best solution when-ever independent policies generate spillovers. This arises as a common agenda can significantly reduce the scope of free-riding behavior among member countries. In addition, cross-border externalities arising out of higher levels of market integration entails countries to agree on policy coordination. The present study explores the extent and magni-tude of agricultural production spillover that might validate the adoption of a common agriculture agenda among Afri-can countries. Overall, our results suggest the presence of positive and significant agricultural production spillover. No evidence of beggar-thy-neighbor or negative spillover policies was found; on average, each country received 2.5 per-cent growth as a result of spillover. Our results also suggest that convergence dynamics is much stronger when spillover is accounted for, which provides a rationale for a common agenda such as CAADP