Institutions and Economic Growth in the MENA Countries: An Empirical Investigation by Using Panel data model

Becherair, Amrane (2014): Institutions and Economic Growth in the MENA Countries: An Empirical Investigation by Using Panel data model.

Abstract

This paper will investigate the impact of institution on economic growth rates in MENA nations, Using panel data model over the period 1995-2012. Within the framework of the neoclassical growth model, this study integrates a broad set of institutional variables such. Security of property rights, governance, political freedom and size of government are the indicators used in the study, facilitating identification of the most important institutions that account for the observed variations in economic growth rates among nations. We find that, The sign and significance of all of the variables are qualitatively similar to the results obtained by MRW (1992). We also find The human capital is highly significant at 99% with initial income and Investment Share in MENA countries. The Results indicate that the dummy variable for oil exporters is positive and significant, indicating that other things being equal, oil exporters would be expected to have higher economic growth rates in MENA Countries. Basic OLS results, as well as a variety of additional evidence, suggest that (a) security of property rights, is the most significant institutions that explain the variations in economic growth rates, (b) The significant and negative sign on the government consumption, indicating that smaller governments are "better" in MENA countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: MENA Countries – Economic Growth – Institutions- Panel Data Model
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C87 - Econometric Software; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

References

[1]Acemoglu .D, Robinson .J, The Role of Institutions in Growth and Development, Review of Economics and Institutions, Vol. 1 – No. 2, fall 2010.

[2]Acemoglu.D, Johnson .S, Robinson J. A., Institutions As A Fundamental Cause Of Long-Run Growth, Handbook Of Economic Growth, Volume Ia. Edited By Philippe Aghion And Steven N. Durlauf , Elsevier B.V 2005.

[3]Bertram C. I. Okpokwasili, Institutions and Development: Are Some More Critical Than Others? -A Cross-Section Empirical Analysis of 54 Countries, journal of business and public affairs , volume 1, Issue 2 ,2007, pp:08-24.

[4]Bartlett. W, Nevenka c, K. I. Jurlin, Aleksandra Nojkovic, Vesna Popovski, Institutional Quality and Growth in EU Neighbourhood Countries, Wp5/11 Search Working Paper, Institutional quality and growth, January 2013.

[5]Douglass C. North, Institutions, Journal of Economic Perspectives- Volume5, Number1 -Winter 1991-Pages 97-112.

[6]Douglass C. North, Institutions, Institutional Change and Economic Performance, Cambridge University Press, 1990, pp: 01-05.

[7]De-Xing Guan, Growth Theory Needs an Institutional Structure, December 2008 (revised May 2009).

[8]Glaeser .E.L, La Porta. R, Silanes. F.L.D, shleifer A., Do Institutions Cause Growth? , journal of economic growth, 9,271-303, 2004.

[9]Gwartney. J, Lawson .R & Hall .J, Economic Freedom of the World 2013 Annual Report, Fraser Institute ©2013 • www.fraserinstitute.org • www.freetheworld.com.

[10]Hakura. D, Growth in the Middle East and North Africa, IMF/AMF High-Level Seminar on Institutions and Economic Growth in the Arab Countries, Abu Dhabi, United Arab Emirates December 19-20, 2006.

[11]Janvier D. Nkurunziza and Robert H. Bates, Political Institutions and Economic Growth in Africa, CID Working Paper No. 98 March 2003.

[12]Janine .A, Growth and Institutions: The World Bank Research Observer, vol. 15, no. 1 (February 2000), pp. 99–135.

[13]Ménard .C and Shirley M. M., the Contribution of Douglass North to New Institutional Economics, Cambridge University Press: Cambridge. DRAFT for editors June 21, 2011.

[14]McMahon .F, Institutions and Economic, Political, and Civil Liberty in the Arab World, Economic Freedom of the World 2014,PP;07-29.

[15]Subramanian. A, the Evolution of Institutions in India and its Relationship with Economic Growth, Johns Hopkins University, April 2007.

[16]Sanjeev K. S, Quality of Institutions and Economic Growth in Developing Economies, Electronic copy available at: http://ssrn.com/abstract=2176542.

[17]Tarik M. Y, Development, Growth and Policy Reform in the Middle East and North Africa since 1950, Journal of Economic Perspectives-Volume 18, Number 3-Summer 2004-P:91-116.

[18]Valeriani .E, Peluso .S, Reggio .E, the Impact of Institutional Quality on Economic Growth and Development: An Empirical Study, Journal of Knowledge Management, Economics and Information Technology, Issue 6 October 2011.

[19]Vijayaraghavan. M, AWard.W, Institutions and Economic Growth: Empirical Evidence from a Cross-National Analysis, Center of international trade, working paper 001302, PP: 02-25.

[20]World Bank list of economies (July 2013).