The Determinants of Economic Growth in the MENA Region

Contributions to Economic Analysis, 2006

The overall growth performance of the MENA region over the period 1960-2000 has been both mixed and characterized by a higher degree of volatility compared to the other regions in the world. In comparing the growth pattern of the MENA region within an international perspective, we have found that: capital is less efficient; trade openness less beneficial to growth and the impact of adverse external shocks more pronounced. In addition, Total Factor Productivity Growth (TFPG) in the MENA region, was not an important source of growth in comparison to the other regions owing to among other things, the lower quality of its institutions, modest stock of human capital and its educational system that focused on preparing students for public sector employment. Within the MENA region, non-oil and diversified economies have fared much better than the oil-exporting countries both in terms of output growth and TFPG. Finally, the degree of exposure to internal and external shocks, the extent of economic diversification and international competitiveness were found to be important factors explaining variations in growth performance within the MENA region.

2004

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper analyzes the weak growth performance in the Middle East and North Africa (MENA) region during 1980-2000 using an empirical model of long-run growth. The relative importance of the factors affecting growth is shown to vary across 16 MENA countries. In GCC countries, where oil revenues are significant, large governments appear to have been a key factor stifling private-sector growth and impeding diversification. In other MENA countries poor institutional quality has held back growth. Political instability is also shown to have played a role. While the MENA region's growth differential with east Asia is explained well in the 1980s, this is less so in the 1990s.

2012

2019

Using system panel GMM dynamic panel on a sample of nineteen MENA countries over the period 1990 – 2014, the study estimates the effect of financial stability on economic growth. Using the principal component analysis to create a composite index of financial stability consisting of a banking crisis dummy variable, the ratio of credit to government and state-owned enterprises to GDP, and the ratio of domestic credit to private sector as a percent of GDP, the estimation results show financial stability in the MENA region is important for boosting economic growth in the region. Furthermore, when dividing the sample between oil and non-oil exporters, the results suggests no statistically significant difference between the two groups in terms of the impact of financial stability on economic growth. Our results are robust to the use of different fixed effects and random effects estimation methodologies.

World Development, 2007

This paper reconsiders the A versus K debate, namely, which factor is the leading contributor to economic growth? productivity gains (A) or factor accumulation (K). The growth accounting analysis is conducted for ten MENA countries over the period 1960-1998. The longrun share of capital in national income is estimated using cointegration (country-specific) and panel data (region-specific) methods. As has been shown for many developing economies, we find that for most of the countries the share is much higher than the conventional share of 0.3-0.4. The growth accounting exercise conducted with the incorporation of human capital reveals that for the MENA region the contribution of productivity gains to economic growth is negligible and frequently even detrimental. Thus, we conclude that it is factor (both physical and human) accumulation that drives the economic performance of MENA economies.

2010

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

International Journal of Engineering and Management Research

To survive in present volatile economic conditions is a herculean task. Global economic circumstances, socio political conditions play important role in growth and development of economies. Evaluating economies in prevailing condition requires effective approach and judicious analysis. All the major economies, developing and underdeveloped economies are performing below to their potential and are tilted to the downslide. MENA economy is struggling due to war disturbance and continuously performing below to its expectation and its overall growth touched the historic low. Its economy slowed down drastically and its GDP is below to world GDP. It’s fiscal and current deficits worsened and rose above 3 percent of the GDP, its oil exporters, public finance, public expenditure and job market, Banking system and FDI declined and facing high fiscal adjustments. In some parameters MENA economy is better than world set standards and in many it is far below. The carried out study is secondary d...

The Quarterly Review of Economics and Finance, 2019

This study focus on the debate related to the sources of economic growth to show whether it arises from technological progress, physical or human capital accumulation in a selected Middle Eastern and North African (MENA) countries for the 1970-2014 period. With the assumption of a Harrod-neutral technological progress and panel cointegration analysis, the results give evidence to suggest that capital accumulation contributes more than productivity growth to economic growth in six MENA countries. Estimation outcomes also show that technological progress dominates sources of growth for more than half of the MENA countries. Most of these countries however do not accumulate economic growth from their human capital except for resources-rich and labor-importing MENA countries.

1994

This paper examines from an international perspective the growth experience of a group of 'non-oil' economies in the Middle East and North Africa region - Syria, Jordan, Egypt, Tunisia and Morocco - over the period 1966-85. The empirical framework focuses on four central variables: per-capita income, investment, school enrollment and population growth. An estimate is made of the relationship these variables have with each other as well as with other variables in a cross-section of nearly ninety countries, and the question is asked whether the regional group of countries conform to an international pattern. The main regional features uncovered are: (l) exceptionally high fertility rates compared to other countries at a similar stage of development, which may or not have imposed a heavy drag on economic growth; (2) a bias in national savings away from physical capital accumulation and, in the Mashreq, toward human capital accumulation; (3) a very low initial income level in ...

2012