JOURNAL OF BUSINESS DIVERSITY

Lucas Critique, Time Inconsistency, and Economic Integration in Africa

Author(s): Oladele Omosegbon

Citation: Oladele Omosegbon, (2017) "Lucas Critique, Time Inconsistency, and Economic Integration in Africa," Journal of Business Diversity, Vol.17, Iss. 3, pp. 68-72

Article Type: Research paper

Publisher: North American Business Press

Abstract:

As far as the African Union, AU, is concerned, the continent should move, inexorably, towards a peaceful, prosperous, and integrated continent. The paper faults the [intellectual] minds on which the movement, behavior and decision of the continent toward a united continent has been built. We draw on the Lucas Critique as an explanation for the gap between the predictions of models and policy implementation success in Africa. Agent’s preferences do change over time: the optimality behaviors on which economic integration were constructed are now violated. Political pressures arising from proto nationalism and external colonial ties often sway member countries to take measures that are different from those agreed upon earlier. A policy rule as opposed to discretion in critical aspects of integration is supported.