Economic Burdens, Social Protection, and Well-Being Amidst the Covid-19 Crisis in the MENA Region: Insights from the Fuzzy Set-Theoretic Approach

Khaled Nasri and Mohamed Ben Abdallah
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Khaled Nasri: kholina86@yahoo.fr
Mohamed Ben Abdallah: University of Carthage

No 1739, Working Papers from Economic Research Forum

Abstract: This study investigates the nexus between natural resource volatility (NRV) and inclusive growth (IG) while examining the moderating impact of financial development (FD) and institutional quality (IQ) across 18 Middle East and North African (MENA) countries from 2002 to 2021. The empirical results —which are based on the two-step System Generalized Methods of Moments (SYS-GMM) estimation—reveal that NRV positively affects IG after controlling for moderation effects, implying that natural resources are a blessing in MENA. The results also indicate that the proposed moderators play a pivotal role in shaping the impact of volatility on IG. Institutions and volatility exhibit a synergistic relationship in promoting inclusivity in the MENA region. Nonetheless, volatility and FD are substitutive in promoting IG since FD (NRV) weakens the positive impact of volatility (FD). Overall, IQ and FD have a net positive impact on IG. However, the positive effect of FD is entirely negated at a volatility threshold of 34 percent, whereas IQ has a net positive effect beyond a volatility threshold of 17 percent. Additionally, the net positive impact of volatility on IG is nullified at an FD threshold of 80 percent. Policymakers in MENA are advised to be prudent with these thresholds while pursuing shared prosperity from their abundant natural resources

Pages: 26
Date: 2024-10-20, Revised 2024-10-20
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