The determinants of the global competitiveness of the economy: a dynamic panel approach applied to the WAEMU country

This article examines the determinants of the overall competitiveness of the WAEMU economy from a dynamic panel approach over the period 2011–2017. The estimate by the method of generalized moments in system (GMM) Reveled that the delayed competitiveness of a period nancial development, GDP per head, internal absorption and taxes on foreign trade affects positively and signicantly the overall competitiveness of the WAEMU countries while economic openness, the rate of ination and the quality of institutions have contributed negative and signicant. It emerges from this work that an improvement in the overall competitiveness of the Union's economy imperatively requires accelerating the process of development of quality, the nancial system as well as protecting local industries from external pressure to through a more adequate commercial policy taking into account the constraints linked to commercial agreements.


Introduction
In a context of economic opening marked by increased competition, the most complex challenge facing most countries is that of making their economies more competitive. This is due to the fact that economic opening is only bene cial for economies which are able to impose themselves both on the domestic and external market. (Verner, 2015). This challenge is particularly important for the member countries of the West African Economic and Monetary Union (WAEMU) which for several decades have suffered from a lack of competitiveness on a regional and international scale (Dumont and Mesple-Somps, 2000).
The notion of competitiveness refers to the ability of an economy to deploy an activity and generate an income, the activity being subject to competition. Two types of competitiveness can be systematically distinguished, which moreover can be related to one another. The rst type is based on prices. In this case, the economic entity is able to respond to the competition by adjusting its prices. It is important to clarify that price competitiveness does not account for all the drivers of an economy's competitiveness since it does not explain how an economy can successfully maintain its competitiveness better and longer beyond the price factor. Besides price competitiveness, there is a second type of competitiveness which involves other structural factors such as the adequacy of the products offered to consumers' tastes, the constraint linked to production capacity, innovation, overall productivity, product quality, pro tability and investment in public infrastructure. This second category of competitiveness is called structural competitiveness or non-price competitiveness. It indicates the ability of an economic entity to stand out from the competition by means other than price. The structural competitiveness of the economy highlights two fundamental points. The rst point highlights the ability to attract activities and the capacity of the economy to face competition and the second points out that a competitive economy makes it possible to provide populations with better living conditions (Scott, 1995).
By considering these two types of competitiveness in a more global approach, it is possible to translate that a globally competitive economy is able to face price competition both on the domestic and foreign market and also to ensuring better living conditions for its populations.
While the gains linked to international competitiveness seem enormous in the improvement of living conditions, the WAEMU countries have the poorest populations in the world, and present inglorious situations in terms of international competitiveness. On this subject, over the period 2000-2018, the average GDP per capita of the Zone increased by 1.47% against 2.6% for Africa South of the Sahara (SSA), 3.66% for the zone Euro, 3.89% for Latin America and the Caribbean and 5.48% for East Asia and the Paci c (World Bank, 2020). Regarding the Global Competitiveness Index (GCI), it was on average 3.57 in the WAEMU over the period 2011 -201 5 against 3.58 for Sub -Saharan Africa, 3.87 for North Africa, 3.97 for Latin America and the Caribbean 4.29 for Southeast Asia and 4.45 for BRICS countries (FEM, 2015). From these comparisons, it is clear that WAEMU remains the Zone less competitive during this period and consequently, one whose populations had the lowest incomes per capita. This position was maintained since 2019, according to Mehouachi (2019), no WAEMU country is ranked in the top 50 of the most competitive countries in the world.
In this context of low competitiveness, it is important to know the determinants of the overall competitiveness of the WAEMU economy. The objective of the article is to identify the determinants of the global competitiveness of the WAEMU economy, starting from a dynamic panel approach. To do this, it analyzes all aspects of competitiveness through the GCI composite indicator. GCI presented to the rest of the article, are t an indicator allows as to take into account more factors relating to business performance, other important factors such as the quality of institutions and the standard of living of population. The choice of the dynamic approach is guided by the assumption that competitiveness is not inherited but built over time. Consequently, the competitiveness recorded in the previous period has an effect on the level of competitiveness in the following period.

Theoretical review
In the economic literature, the concept of competitiveness is frequently used in the context of economic performance analyzes. Although several studies analyze it empirically or discuss its merits from the point of view of improving the living conditions of populations, it must be recognized that there is no consensus on its de nition or on the precise methods to be used to measure it. In the theoretical literature, two types of competitiveness are distinguished, namely price competitiveness and non-price competitiveness also quali ed as structural competitiveness.
The price concept refers to the productive capacity of the company, that is to say, its ability to have high productivity with low production costs. For Porter (1990), it is more optimal to study competitiveness in the microeconomic sense rather than the national level. It should also be noted that price competitiveness is the component of competitiveness most frequently analyzed in the economic literature. Thus, it re ects the ability of the national economy to compete by offering lower prices than those of its competitors. According to Rousse (1992), this approach to competitiveness is important because it makes it possible in particular to apprehend the effects of changes in price and the exchange rate, but it does not take into account all the drivers of the potential competitiveness of an economy. Price competitiveness, despite its fairly simple statistical measurement, does not explain how an economy can successfully maintain its competitiveness better and longer beyond the price factor.
The main criticism brought to the analysis of a nation's competitiveness by showing prices concerns its interpretation. Indeed, there often appears a complexity in the interpretation of price competitiveness. When it deteriorates, it could translate into higher production costs or an improvement in the quality of exported products. But by making the Egyptohèse that the rise in prices is dependent on an improvement in the quality of the exported products, that is favorable to a reinforcement of the structural competitiveness since the exports are of better qualities.). On this subject, Krugman (1988) maintains that there is a real difference between competitiveness in the sense of an enterprise and that measured on the scale of a country because the competitiveness of a nation is not simply determined. By the ability to sell more, but above all by its ability to record a gain in overall productivity of the economy.
Faced with the criticisms that have been made in relation to the analysis of price competitiveness, the proponents of non-price competitiveness have advocated the analysis of structural competitiveness which, in turn, involves other structural factors such as product adequacy offered to consumer tastes, the constraint linked to production capacity, level of industrialization, innovation, product quality, pro tability, spending on public infrastructure as well as all other endogenous factors likely to improve the competitive position of an economy both on the domestic and external market, the purpose of which is to improve the living conditions of populations. In order to take into account all aspects of competitiveness, the World Bank has proposed to analyze the competitiveness of nations in its global component using an indicator known as the Global Competitiveness Index (ICG). Global competitiveness takes into account all the drivers of competitiveness (price and structural).

Empirical debates
In the empirical literature, debates on the concept of competitiveness have crystallized around its measurement indicators as well as its determinants.
Indeed, we had to wait for the work of Aschauer (1989a and1989b) to watch a replay of the contribution of spending public economic performance. The author thus estimated a production function extended to public capital to highlight the speci c contribution of public infrastructure to improving the overall competitiveness of the economy. His work has laid the groundwork for an explosion of new endogenous growth models that now see investment in public infrastructure as a self-sustaining gain factor in productivity and long-term competitiveness. Among these developments, the reference work is that of Barro (1990). Its model highlights the role of public infrastructure in general and transport infrastructure in particular in the competitiveness of the economy. In this chain, it emerged that the transport infrastructures intervene as well in the sphere of production as in that of marketing. When infrastructure is poor or ineffective, this results in higher direct transport costs and longer delivery times, which signi cantly increases trade costs and therefore reduces competitiveness. Consequently, an improvement in public spending on infrastructure contributes to reducing transport costs and therefore contributes to improving the volume of trade in the country (Limao and Venables, 1999).
On the same trajectory analysis, Kopp (2007), reached the conclusion that the road infrastructure may have positive effects on macroeconomic productivity of nations. The author's analysis covered thirteen (13) Western European countries. The xed effects estimate of the contribution of the national road networks gives a signi cant coe cient of 0.71. He explains that the countries in which companies are large consumers of road transport services are more likely to bene t from investment in transport infrastructure.
In general, studies that have examined the contribution of public infrastructure spending in general to the competitiveness of the economy have succeeded in establishing a positive impact of these on overall productivity of the economy. The synthesis of work shows that over a long period, the elasticities are between 0.23 and 0.71 (Munnelle, 1990a ;Eeisner, 1991 ;Ford and Poret, 1991).
In another, Camagni (2002) discusses how more depth of two subordinates aspects of the concept of competitiveness. Thus, he rst attaches himself to the very notion of territorial competitiveness in order to test its theoretical solidity. The concept of competitiveness, considered at the national level, was indeed strongly criticized by Krugman (1994), causing in particular the perplexity of the regional economists.
However, explains Camagni (2002), the foundations of these criticisms have never been examined systematically for more limited entities. Brie y, passing on to other developments, we note that for Krugman (1994), and economists do not dispute it on this point, the e ciency of sectors not exposed to international competition represents an essential element for the prosperity of a nation, more than competitiveness in foreign markets. However, it appears that the merits of this argument must be closely related to the size of the country (region) considered and its openness to trade. Depending on the circumstances, the two notions of internal productivity and external competitiveness may thus appear much more similar.
The role of the institutional environment in the competitiveness of a nation has also been studied. In this regard, Ulman (2013) uses Pearson's correlation test and simple regression to determine and analyze the nature of the relationship between competitiveness and corruption. Using global competitiveness indicators, he nds that corruption signi cantly in uences competitiveness. He analyzed the relationship between these variables by considering the level of development of the countries. He nds a strong negative relationship between competitiveness and corruption in developed countries. This relationship remains in developing countries but it is very weak compared to developed countries ; while it is even twodimensional in middle-income countries. Lafay (1995) focused on the competitiveness of the European economy and explained how the high costs of raw materials have led to the decline of European competitiveness. For him, it is not the implementation of the single market that has most hampered European competitiveness in recent decades but rather the high cost of raw materials which is closely linked to the cost of transport. The author tells us that the high cost of e transportation greatly affects the production cost of enterprises which in turn negatively affects competitiveness. As for Mody and Reinfeld (1995), its have been more speci c when they analyzed the factors determining the competitiveness of Hong Kong economies, Singapore and Taiwan with a set of factors of cost indicators and environmental quality. With the main objective of analyzing the contribution of infrastructure to the competitiveness of the economies of these areas, the authors came to the conclusion that an improvement in investment in public infrastructure and in the quality of the environment, produces a reduction in supply costs, lower delivery times, accelerate production cycles and increase competitiveness.
In SSA, the economic literature on the determinants of competitiveness remains fairly limited and most of the existing studies have been limited to the evaluation of the effects of certain economic factors such as the exchange rate, the xity of the F.CFA and the transport infrastructure on the price competitiveness of nations.
Indeed, Bogetic et al. (2007) worked on the Ivory Coast case, noting that the overvaluation of the F.CFA had negative effects on the competitiveness of Ivorian agriculture. Outside the CFA zone, competitiveness has also been studied in some SSA countries. In this regard, Adeoti (2005), for instance, highlighted the positive role of information technology in the competitiveness of the manufacturing industry in Nigeria.
As regards the role of public infrastructure in the competitiveness of economic, Dumont and Mesplesomps (2000) analyzed the extent to which an increase in public infrastructure, including road infrastructure allows for better business performance of the Senegalese economy and that of its competitiveness. In their conclusions, the authors established that a policy of expanding public infrastructure in general has direct effects on domestic prices and the wage rate and therefore on the commercial performance of the country's economy. This conclusion shows how the poor quality of transport infrastructure in general affects the e ciency of production, domestic prices and wages in lowincome countries.
In another register, the analyzes of Agbor and Taiwo (2014) explored the effects of road infrastructure on the competitiveness of economies. They worked on the fundamental determinants of the competitiveness of SSA countries with the speci c case of the WAEMU zone and the Economic and Monetary Community of Central Africa (CAEMC) zone. The analysis made using panel data compared the level of competitiveness of the two areas. Based on their analysis, the authors were able to establish a positive correlation between investments in road infrastructure and international competitiveness in the two areas.

Empirical model
In analyzing the compétitivit é economic model that is often used is that of Porter (1990). In his model, four groups of factors influence the competitiveness of the economy. The first refers to the allocation of the country in infrastructure publics, in skilled labor as well as all the other factors likely to improve economic productivity.
The second concerns demand conditions and specifies how the nature of the local market for goods and services is decisive for the competitiveness of a nation. The third factor emphasizes the absence or presence in the Page 7/20 country of internationally competitive suppliers or other complementary industries. The fourth element relates to the strategy of firms, their structures and the rivalry they face.
However, in Porter's (1990) approach, these variables are considered to be exogenous. Thus, the empirical model retained in this article is that of Kopp (2007) which is an extension of the model of Barro (1990). This model is part of endogenous growth by considering public spending as a self-sustaining gain factor in the productivity of private factors and in the overall productivity of the economy. The choice of this model is guided by the fact that Kopp (2007), assessing the impact of spending on infrastructures public on competitive, derived an equation overall productivity gain. However, Krugman (1994) had already ruled that overall productivity is an indicator of the overall competitiveness of the economy in the medium and long term.
With regard to the choice of the dynamic panel, it is essentially determined by the fact that past competitiveness could have positive effects on future competitiveness. As Porter (1990) admitted, competitiveness is not inherited but built over time. Thus, taking into account all these aspects, the empirical dynamic panel model that is used in this article takes the following form :

Estimation method
For the estimation of the model, we use the Generalized Moments Method (GMM) to identify the determinants of the overall competitiveness of the WAEMU. The choice of this method is linked to the fact that the number of individuals in the model exceeds that of the period. This method provides solutions to problems of simultaneity bias and controls the specific effects. In addition, it solves the endogeneity problem of one or more explanatory variables, in particular the presence of the lagged dependent variable.
There are, however, two variants of the GMM estimator. The first is the first difference estimator of Arellano and Bond (1991) which consists in taking for each period the first difference in the equation to estimate and eliminating the individual effects and then in instrumenting the explanatory variables of the equation in first difference by their values in level delayed by one or more periods. The second version is the system estimator of Blundell and Bond (1998). This estimator is an improved version of the first. The system estimator of Blundell and Bond (1998). This method consists in making a combination of the first difference equation with the level equations in which the variables are instrumented by their first differences. Therefore, the GMM in the system is more efficient than the GMM in the first difference.
Thus, in the estimation of our model, we use GMM as a one-step system in order to be able to take advantage of the advantages it offers, notably the absence of concurrency and autocorrelation bias. Before proceeding to the estimation, we carry out tests in order to provide the efficiency of our results. Thus, we perform the preliminary model specification tests, the unit root test, the global significance test, the Sargan / Hansen overidentification test, and the Arellano and Bond error autocorrelation test. should be noted that each indicator is established according to the focus of the study. In general, each indicator used to assess the competitiveness of the economy depends on the facts highlighted in the de nition of the concept. In this regard, Sigue (2018) states that each type of indicator is valid only for a particular aspect of the analysis. In the literature, several indicators including the real effective exchange rate, the weighted export and import index, the net export index proposed by Latruffe (2010) and the overall productivity of Krugman (1994) can be used to capture the level of competitiveness of nations.

Variables And
Regarding the real effective exchange rate, authors like Mulder et al. (2004) and Ball et al. (2006) and Bceao (2013) recommended its use in the case of countries with different currencies. This indicator is not used in this article because it only re ects the price aspects of competitiveness. Also, in the WAEMU space, the currency is common to the member countries.
As for the weighted export and import index, it is proposed by the OECD. In the measurement of the international economic competitiveness of France, Durand et al. (1987) started from import and export competitiveness to establish the overall competitiveness index. An analysis of this indicator shows that it is based solely on import and export prices. Presumably, it would be more optimal to use it to measure price competitiveness which only re ects one aspect of overall competitiveness.
As for Latruffe's export index (2010), it is limited to measuring external trade performance which is a result of overall competitiveness. However, the relationship between commercial performance and competitiveness is not re ective. Otherwise, a competitive economy is a successful economy, but a successful economy is not necessarily competitive. Therefore, this indicator does not instantly explain the overall competitiveness measured in this article.
On overall productivity, Krugman (1994) bases his argument by stating that what matters most is overall productivity because it determines the real per capita income in the medium and long term of a national economy. As a result, overall productivity is a good indicator of economic competitiveness. It is always tempting to assume that the ability to export a good is determined by the presence of an absolute productivity advantage. The higher the productivity, the more competitive this economy is. The major problem of measuring the global competitiveness of African countries by overall productivity is linked to the unavailability and low quality of data. Therefore, this indicator is not used in this article.
In this article, the World Bank GCI is used. This indicator identi es the drivers of overall productivity necessary for sustained and sustainable economic growth. The GCI is structured around twelve (12) pillars, namely institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, e cient product markets, labor market e ciency, nancial market development, technological development, market size, business sophistication and innovation. In order to be able to take into account the level of development of the countries, the twelve (12) pillars of competitiveness are classi ed in three classes. The rst class with the rst three pillars is that of basic parameters; the second class which groups together the following six pillars is that of sources of e ciency and the third class which groups together the last two pillars is that of sources of innovation and sophistication.
The World Bank determines the GCI by giving weights to the different pillars to take into account the level of development of each country. The calculation is based on successive aggregations of scores starting from the indicators until reaching the GCI score (FEM, 2015). The value of the GCI is between 1 and 7 where the lowest level of competitiveness indicates and 7 the highest level. It is a comprehensive indicator of competitiveness in the sense that it takes into account all sectors and the well-being of the population.

Explanatory variables
In the economic literature, several variables are likely to affect the overall competitiveness of the economy. The most used in the analyzes are the following: GDP per capita (GDPH) : This is a variable that re ects the level of economic development in the country. Its growth is synonymous with the national economy ensuring an e cient sphere of production and marketing. The expected sign is positive.
In ation (INFL) : The effect of in ation is a controversial issue. Some studies claim that in ation has a positive impact on growth ( Dornbusch et al., 1996 ), while other studies suggest that this effect is characterized by a non-linear relationship ( Fischer, 1993;Kremer et al., 2009). The expected sign is ambiguous. The expected sign is ambiguous.
Tax on foreign trade (WSBI) : It represents all the tax levied by the E State on foreign trade. In general, taxation is made on imported products. Thus, its increase leads to a decrease in imports of UEMOA from the rest of the world since the products become more expensive. The expected sign is positive.
Economic openness (OUEC) : it captures the intensity of commercial interactions with the rest of the world. The sum ratio of exports and imports to GDP is used to measure it. Its sign is ambiguous because if exports can act positively on competitiveness, imports are on the other hand can have negative effects.
Financial Development (DEFI) : It is important to emphasize that several indicators are used in the literature to measure nancial development. These indicators can be grouped into two categories. Firstly, there are the indicators relating to the size and e ciency of banking activity and secondly, there are the indicators relating to the functioning of the nancial markets. Due to the low level of development of the nancial market in developing countries in general, it is more advisable to use the rst category. Like King and Levine (1993), credit to the private sector as a percentage of (GDP) is used as an indicator of nancial development in this work. In addition to these variables, a set of control variables, frequently used in the analysis of economic performance, is included in the estimates.

Ratio of foreign direct investment (RIDE) : It is obtained by comparing foreign direct investment to GDP.
This variable captures the pressure of internal demand on exports. When it is high, this translates into high absorption, which assures companies of economies of scale. According to Henry (1994), the macroeconomic analysis considers that there is a complementary relationship between export and the foreign investment ratio. Therefore, the expected sign is therefore positive.
Internal absorption (ABIN) : it represents the ratio between domestic demand and GDP. It captures the pressure of internal demand. Strong absorption is in principle a sign of the existence of a potential market and should allow companies to achieve economies of scale. The expected sign is therefore positive. Kaufmann, et al. (2010). These six indicators are citizen responsibility, political stability and freedom from violence, government e ciency, regulatory quality, the rule of law and the control of corruption. Our indicator is measured on a scale of -2.5 to 2.5 where the highest value translates into a better quality of the institutions. Good institutions are likely to generate a more competitive economy from which a positive sign is heard.

Source of data
The data used in this article are annual and come exclusively from the World Bank database except the GCI obtained from the GEF and the quality of the institutions coming from the World Governance Indicator (WGI) database. The data cover the period from 201 1 to 2017, i.e. seven (07) years. The choice of this period essentially guided by the availability of data on the explained variables (GCI). Table 1 presents the descriptive characteristics of the data making up the analysis sample. The observation in Table 1 generally highlights a quasi-homogeneity according to the countries of the economic and nancial aggregates according to the countries over the period 2011-2017. This low variability, however, masks some peaks irregularitys. In terms of per capita income, the Ivory Coast (1,539.25 USD) and Senegal (1,434.30 USD) are doing better with income than the rest of the countries of the Union. Regarding nancial development, only Guinea Bissau stands out, the rest of the countries have a homogeneous level. One point that should be emphasized is the general weakness of the quality of the institutions of the EMEA countries. This could be related to political instability, problems soci o-policies and the level high of corruption of years these countries. Regarding the competitiveness overall, it is low fa ç general is in the Union. Its comments more informations feels probably a behavior very irregular for the economy of the Union. For example, low absorption and high degree of openness attest to the strong dependence of the UEMOA economy to external factors, naturals (climate) and those within the context of the global economy.

Estimation result
Before presenting the results of the estimation of the determinants of the overall competitiveness of the WAEMU economy, we rst present the results of the basic tests.
The result of the model speci cation test gave a sher statistic of F (12, 86) = 4.97 and P-value = F = 0.0003. At the 5% threshold, this empirical evidence makes it possible to reject the null hypothesis of the absence of individual effects. Then, there is homogeneity of the coe cients of the model and this translates that the data support the selected panel structure. In addition, Pesaran's (2004) interindividual dependence test concluded that autocorrelation was present at the 1% threshold. This result made it possible to carry out the stationarity test of the series using the second generation test of Pesaran (2007). Table 2 presents the results of the stationarity test. Source : author's calculation from World Bank (2020) and GEF (2017) data.
It is apparent from Table 4 that the ' index of global competitiveness, on nancial development, the per capita GDP, the economic opening, the tax on foreign trade and the domestic absorption are stationary in level while the in ations variables foreign direct investment ratio and quality of institutions are stationary in primary difference.

E ciency of the GMM estimator in dynamic panel
First, the instrument used in our regression is valid because the Sargan test and the Hansen test did not reject the hypothesis of validity of the lagged variable of employment in level as an instrument. In addition, there is no rst and second order autocorrelation of rst difference errors because the rst AR (1) and second order AR (2) autocorrelation test of Arellano and Bond validated assumption of no autocorrelation of errors. The tests Sargan Hansen and lead to the conclusion that the 5% we do not reject the null hypothesis of on identifying patterns. Thus, it is possible to conclude that the models are very dynamic. For the sake of eliminating the presence of heteroskedasticity, we estimate the model by the GMM method in a one-step system using the robust option, since it makes it possible to correct the students statistics of heteroskedasticity. Therefore, we can conclude that all of our results are robust. Note : All variables are in logs. Sargan ' s test is associated with the null presence of instrument hypothesis; the AR (1) and AR (2) tests are associated with the hypothesis of absence of autocorrelation of order 1 and 2; *** signi cant at 1%; ** signi cant at 5%; * signi cant at 10%.
As can be seen, the results are generally satisfactory. Indeed, in the UEMOA, delayed competitiveness of a period, the development nancier, the GDP per capita, domestic absorption and tax trade outside affects positively and signi cantly the competitiveness overall in the countries of WAEMU while economic openness, the rate of in ation and the quality of institutions contribute negatively and signi cantly to its formation.
The positive effect of the previous level of competitiveness is by no means counterintuitive because one could expect that a more competitive economy would be able to attract more investment, more productivity and therefore more competitiveness. The competitiveness is in itself a sign of vitality of an economy and therefore a more competitive economy is to guarantee a return on that investment less competitive economy. This result is similar to the conclusion of Herciu (2013). For this author, an « initial endowment solid » in competitiveness allows savings generate of resources to ensure the nancing of growth later.
With regard to nancial development, it has a statistically signi cant positive effect on overall competitiveness. This result consistent with our expectations, could expliquence by the fact that changes in the nancial system would be a channel of mobilization are resources for more pro table investments and stimulating technological innovation by identifying and the nancing of development projects with the best returns and long lifespans. This result corroborates the nding of Ibrahim and Alagidede (2018) and Sigue and Barry (2020) which recognized the importance of developing nancial economic performance of Africa south of the Sahara (SSA) and the WAEMU. For the latest authors, nancial development positively and signi cantly in uences the external performance of the WAEMU countries, especially in the long term. The authors establish that in the short term there is heterogeneity between countries in the effect of nancial development on the external performance of different countries. They explain that in developing countries in general and in the WAEMU space in particular, the imperfection of the nancial markets reduces the interactions between savings and investment and, by consequence, the external performance of the economies of the Union.
Concerning the GDP per capita, its signi cance translates that an improvement of the living conditions of the populations is a capital factor of a positive dynamics of the global competitiveness of the economy as well on the domestic market as abroad. Thus, an improvement in per capita income constitutes a source of economic prosperity through the principle of effective demand. According to Yerbanga (2017), the signi cance of per capita income in explaining the overall performance of the economy would translate the existence of opportunities for economic agents on the regional market.
Regarding economic opening, beyond its econometric signi cance, economically admits a negative effect on the overall competitiveness of the WAEMU economy. This result contrary to our expectations, re ected a strong open economies of the Union to international market would be a hindrance to the improvement of its competitiveness. This state of affairs could be explained by the fact that the opening up of the economies of the Union exposes national companies to fairly stiff competition led by multinational rms more armed than them. From this fact, they do not come to enjoy the local market to reach maturity phase and disappear soon enough. This point of view is supported theoretically by the infant industries argument put forward by List (1904) to justify the need to protect economies at some stage of their development. This result con rms those of the work of Agbor and Taiwo (2014) who also nd this negative effect of openness to international trade on the competitiveness of the countries of the franc zone.
The tax on foreign trade applied by the WAEMU countries has a positive and signi cant effect on their overall competitiveness. This result is explained by the fact that the tax on foreign trade is an instrument of commercial policy. Therefore, to reduce the impact of competition in domestic markets, the countries could impose taxes on certain imported products. The objective being to encourage and assure the domestic production which will be used for export. Such a policy ensures the « survival » of local industries. In principle, membership to the Unions Economic and rati cation of certain trade agreements International forced the countries apply common taxation and negotiated multilaterally but however, speci c measures referred to as contingency measures may be applied by the countries members the Union.
Regarding in ation, the results of the estimate show that it positively and signi cantly affects the overall competitiveness of the WAEMU economy. While we expected a negative effect of in ation on competitiveness, the results reveal rather a counterintuitive sign. The explanation for this result is based on the problem of the optimal level of in ation that can be tolerated in an economy. On this subject, was most famous controversy about in ation is that relating to the relevance of the Phillips curve, which suggests the possibility of getting an extra economic growth to lead to a decline in unemployment in return for relatively high in ation. This question has often divided the research community. Indeed, while some are in favor of low in ation, others believe that moderate in ation is likely to positively in uence the performance of the economy. In particular, Khan and Senhadji (2000) believe that an in ation level of around 11 to 12% would not be detrimental to developing economies. In Africa in particular, Combey and Nubukpo (2010) estimate the optimal rate of in ation for UEMOA countries at 8%, one of the convergence criteria of which is the obligation for member states to maintain their levels of in ation below 3%. Thus, the positive effect of in ation on the competitiveness obtained would be justi ed by the fact that in ation is below the optimal threshold at which its perverse effect on the economy will begin to be felt.
Another signi cant variable is the quality of the institutions. Indeed, our estimate revealed that the quality of institutions is a limiting factor competitivity overall economies of the WAEMU. The sign obtained is negative and statistically signi cant. This result is identical to that obtained by Agbor and Taiwo (2014). It makes it possible to say that the WAEMU countries must speed up the process of improving their institutions in order to improve their level of competitiveness. This is all the more important because quality institutes allow all development factors to fully play their scores. At this, Yahyaoui and Rahmani (2009) have shown by example that there is a relationship between nancial development, the quality of institutions and the economic growth. For them, a system as nancial presupposes a sound institutional framework outlined by a low level of corruption, a more e cient judicial system, and better bureaucracy.
As a result, it is possible to emphasize the idea that good governance presents itself as a determinant of nancial development.
The results of the estimates also reveal a signi cance of the internal absorption at the threshold of 10%. This result shows that the Union has a potential market allowing local businesses to achieve economies of scale. However, the low signi cance could translate that on their own's markets households, the countries of the WAEMU still unable to win and this is partly dependent on foreign competition imposed on them.
One result which appears to be attractive is the insigni cance of the foreign direct investment ratio.
Indeed, the coe cient of the ratio of foreign direct investments is low and not signi cant. This situation could be explained by the location of foreign direct investment (FDI). Indeed, FDI is mainly oriented towards the mineral and petroleum sectors which are most often transported to industrialized countries for processing.

Conclusion
In this work, it was a question of identifying the main determinants of the global competitiveness of the WAEMU economy from a dynamic panel approach. We have shown through the existing theoretical literature that the concept of competitiveness has been the subject of several studies although there is it no consensus on its de nition or on the speci c methods to be used to measure it. Thus, two types of competitiveness are distinguished, namely price competitiveness and non-price competitiveness. In this article, it was a question of taking into account these two types of competitiveness through an indicator of global competitiveness.
After carrying out a GMM estimation in the system, we came to the conclusion that the delayed competitiveness of a period, the nancial development, the GDP per capita, the internal absorption and the tax on the foreign trade affect positively and signi cantly the overall competitiveness of WAEMU countries while economic openness, the rate of in ation and the quality of institutions have a negative and signi cant contribution.
These results lead to clear economic policy implications. The United States members must necessarily accelerate the process of developing the quality of the institutions to take advantage of all the bene ts of the nancial system. The countries of the Union must also ensure the protection of local industries from external pressure through a more adequate trade policy taking into account the constraints linked to trade agreements.