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Reform complementarities and economic growth in the Middle East and North Africa

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  • Mustapha Kamel Nabli

    (World Bank, Washington, D. C., USA)

  • Marie-Ange Véganzonès-Varoudakis

    (CERDI, CNRS, Université d'Auvergne, Clermont Ferrand, France)

Abstract

In this paper we empirically analyse the linkages amongst economic reforms, human capital, physical infrastructure, and growth for a panel of 44 developing countries over 1970-1980 to 1999. For this purpose, we generate aggregated reform indicators using principal component analysis. We show that the growth performance of Middle East and North Africa (MENA) has been disappointing because these economies have lagged behind in terms of economic reforms. However, our analysis also reveals that the growth dividend of some reforms has been small. This is the case when structural reforms are implemented in an unstable macroeconomic environment (which corresponds to the situation of the MENA countries in the 1980s), and when macroeconomic reforms are accompanied by a low level of structural reforms (as observed during the 1990s). Our result illustrates the complementarities between reforms as modelled by Mussa (1987) and Williamson (1994). Actually, after human capital and physical infrastructure, our analysis finds that macroeconomic and external stability are key variables for the reform process and for the growth prospects of the developing world. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Mustapha Kamel Nabli & Marie-Ange Véganzonès-Varoudakis, 2007. "Reform complementarities and economic growth in the Middle East and North Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(1), pages 17-54.
  • Handle: RePEc:wly:jintdv:v:19:y:2007:i:1:p:17-54
    DOI: 10.1002/jid.1286
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    Cited by:

    1. Ahmet Faruk AYSAN & Mustapha Kamel NABLI & Marie-Ange VÉGANZONÈS-VAROUDAKIS, 2007. "Governance Institutions And Private Investment: An Application To The Middle East And North Africa," The Developing Economies, Institute of Developing Economies, vol. 45(3), pages 339-377.
    2. Kinda, Tidiane & Plane, Patrick & Veganzones-Varoudakis, Marie-Ange, 2009. "Firms'productive performance and the investment climate in developing economies : an application to MENA manufacturing," Policy Research Working Paper Series 4869, The World Bank.
    3. Tidiane Kinda & Patrick Plane & Marie‐Ange Véganzonès‐Varoudakis, 2011. "Firm Productivity And Investment Climate In Developing Countries: How Does Middle East And North Africa Manufacturing Perform?," The Developing Economies, Institute of Developing Economies, vol. 49(4), pages 429-462, December.
    4. Rougier, Eric, 2016. "“Fire in Cairo”: Authoritarian–Redistributive Social Contracts, Structural Change, and the Arab Spring," World Development, Elsevier, vol. 78(C), pages 148-171.
    5. Maria Giovanna Bosco & Roberto Mavilia, 2014. "Innovation performance of MENA countries: where do we stand?," Chapters,in: The Economic and Political Aftermath of the Arab Spring, chapter 7, pages 204-228 Edward Elgar Publishing.
    6. Mustapha Kamel Nabli, 2007. "Breaking the Barriers to Higher Economic Growth : Better Governance and Deeper Reforms in the Middle East and North Africa," World Bank Publications, The World Bank, number 6914, June.
    7. Ahmet Aysan & Marie-Ange Véganzonès –Varoudakis & Zeynep Ersoy, 2007. "What Types of Perceived Governance Indicators Matter the Most for Private Investment in Middle East and North Africa," Economics Bulletin, AccessEcon, vol. 5(8), pages 1-16.
    8. Brach Juliane, 2010. "Technology, Political Economy, and Economic Development in the Middle East and North Africa," Review of Middle East Economics and Finance, De Gruyter, vol. 5(3), pages 1-23, February.
    9. Galego Aurora & Caetano José Manuel, 2012. "Institutional and Economic Determinants of FDI: A Comparison between the European Union and the MENA Region," Review of Middle East Economics and Finance, De Gruyter, vol. 8(1), pages 1-23, August.
    10. Tidiane KINDA & Patrick PLANE & Marie-Ange VEGANZONES-VAROUDAKIS, 2008. "Firm-Level Productivity and Technical Efficiency in MENA Manufacturing Industry: The Role of the Investment Climate," Working Papers 200819, CERDI.
    11. Serranito, Francisco, 2013. "Heterogeneous technology and the technological catching-up hypothesis: Theory and assessment in the case of MENA countries," Economic Modelling, Elsevier, vol. 30(C), pages 685-697.
    12. Ibrahim Mohammed Adamu & Rajah Rasiah, 2016. "External Debt and Growth Dynamics in Nigeria," African Development Review, African Development Bank, vol. 28(3), pages 291-303, September.
    13. Murshed Syed Mansoob, 2008. "Development despite Modest Growth in the Middle East," Review of Middle East Economics and Finance, De Gruyter, vol. 4(3), pages 1-31, September.

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