Exchange rate regimes and economic performance: Does CFA zone membership benefit their economies?

This paper aims to evaluate the importance and impact of CFA zone membership by distinguishing between the effects of being in monetary union from those which arose from anchoring the CFA franc. Using de jure and de facto regime classification schemes and a sample of 35 SSA countries over the 1985-2009 period, our results show that the CFA zone membership has been beneficial in terms of inflation, while it has not resulted in a significant effect on growth. Finally, we evidence that greater fiscal discipline can be associated with peg regimes in SSA, but not necessarily with monetary union.