Africa Institute for Research in Economics and Social Sciences is organizing a seminar on Thursday, January 25th, 2024 at 12:30 p.m at the Rabat Campus of Mohammed VI Polytechnic University (B-A1-01) on ''DiD with as few as two cross-sectional units -- An application to the impact of democracy on growth''.

Our guest speaker for this event is Emmanuel Tsyawo, Assistant Professor at FGSES.

ABSTRACT

The effect of democracy on economic growth remains a largely unresolved issue as empirical findings tend to be substantially heterogeneous in the constitution of the pooled panel. Contrary to the prevailing approach, this paper takes an interest in country-specific effects on as few as one country (Benin) using as few as one control (Togo). Under weak identification and sampling assumptions, we develop a consistent and asymptotically normal Difference-in-Differences estimator of average treatment effects by exploiting temporal variation under fixed $N$, large $T$ asymptotics. The estimator is further complemented with a test of identification when at least two suitable controls are available. We find that Benin's experience of democracy (relative to an undemocratised Benin) accounts for a 4.4\% larger annual GDP on average since 1991.