Economic Policy, Institutional Development, and Income Growth: How Arab Countries Compare with Other Developing Countries
Similar to most other developing countries, almost all Arab countries failed to catch up economically with advanced industrial countries. This paper discusses three possible explanations of the disappointing growth performance: (i) an insufficient reformmindedness of developing country governments, (ii) counterproductive policy recipes of the Washington Consensus and (iii) more deeply rooted barriers to growth related to institutional deficiencies prevailing in various developing countries. The empirical evidence for Arab countries and other developing countries provides little support to the first two hypotheses. By contrast, institutional development is shown to have a significant impact on policy-related variables and the growth performance of developing countries. For Arab countries as a group, institutional development is more advanced than for the control group of other developing countries. Yet, serious institutional deficiencies tend to constrain future growth in several Arab countries. These findings have important implications for national policymakers and the international community.
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- Jeffrey D. Sachs, 2001. "Tropical Underdevelopment," NBER Working Papers 8119, National Bureau of Economic Research, Inc.
- Peter Nunnenkamp, Julius Spatz, 2003. "Foreign Direct Investment and Economic Growth in Developing Countries: How Relevant Are Host-country and Industry Characteristics?," Kiel Working Papers 1176, Kiel Institute for the World Economy.
- William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423, June.
- Nunnenkamp, Peter, 2003. "Wachstumsdivergenz zwischen Entwicklungsländern : hat die Entwicklungsökonomie versagt?," Open Access Publications from Kiel Institute for the World Economy 3053, Kiel Institute for the World Economy (IfW).
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