Sanctions, Wars and MENA Trade

Khalid Sekkat

No 1475, Working Papers from Economic Research Forum

Abstract: The paper investigates to what extent the intra-MENA political tensions adversely affect intraregional trade (IRT). While traditional economic and political science literature focus on trade and wars, the paper considers other expressions of political tensions. In addition to inter-state wars, countries impose sanctions on financial collaboration, military collaboration, travel freedom, commercial relationships and diplomatic arrangements. The sanctions can be combined and simultaneous is order to achieve the highest impact. The analysis applies the gravity approach and the Pseudo-Poisson Maximum Likelihood estimator (PPML) to bilateral trade between the 18 MENA countries and 128 of their partners over the period 1971-2014. The results are that only commercial sanctions and inter-state wars are significant. They are negative meaning that they harm IRT.

Pages: 34
Date: 2021-08-20, Revised 2021-08-20
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