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Estimating the Income Counterfactual for Oil Producing Countries of the MENA Region

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  • Mahdi Majbouri

    (Babson College)

Abstract

How much richer would oil producing countries in the Middle East be if they invested all their natural resource rents? This study tries to answer this question by calculating the counterfactuals of capital stock and income under two major scenarios. Combining several data sets, including a unique set on sovereign wealth funds, it finds that oil-producing MENA economies could have had, on average, around a 0.55 percentage point higher growth rate if they had used their natural resource rents efficiently. This difference in growth rate translates to around 25% higher income over a 40 year period. These numbers are separately calculated for each country and their important policy implications are discussed.

Suggested Citation

  • Mahdi Majbouri, 2015. "Estimating the Income Counterfactual for Oil Producing Countries of the MENA Region," Working Papers 904, Economic Research Forum, revised Apr 2015.
    • Handle: RePEc:erg:wpaper:904
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    References listed on IDEAS

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    Cited by:

    1. Ansari, Dawud, 2016. "Resource curse contagion in the case of Yemen," Resources Policy, Elsevier, vol. 49(C), pages 444-454.

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