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Can Banks Lead the Economic Recovery of the Arab Spring?

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  • Mahmoud Haddad

    (University of Tennessee-Martin, Martin)

  • Sam Hakim

Abstract

We analyze the role of banks in Bahrain, Egypt, Libya, Tunisia, and Yemen, pre-and post-revolution, and find that the volume of credit they offered to the private sector was neutral to real economic growth. Supported by a recent IMF study that ranks banking regulation and supervision “poor” or “below- average” in four out of the five countries under study, we attribute the limited effectiveness of their banks to government intervention in credit allocation and pricing. Our results cast doubt on the banks’ ability to lead an economic recovery, and suggest that monetary policy alone will not be successful within the first three years.

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  • Mahmoud Haddad & Sam Hakim, 2015. "Can Banks Lead the Economic Recovery of the Arab Spring?," Working Papers 965, Economic Research Forum, revised Nov 2015.
    • Handle: RePEc:erg:wpaper:965
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    1. Jeremy Greenwood & Juan Sanchez & Cheng Wang, 2013. "Quantifying the Impact of Financial Development on Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 194-215, January.

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