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Institutions and Development in MENA Region: Evidence from the Manufacturing Sector

Mahmoud Arayssi and Ali Fakih ()

No 8772, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the role of institutions (including civil law origin), financial deepening and degree of regime authority on growth rates in the Middle East and North Africa (MENA) region using panel data through a fixed effect model. The results reveal that English civil law origin and the establishment of the rule of law work with the development of financial institutions to increase economic growth in these economies; however, the democratization of the political institutions and foreign direct investment do not assist financial development in promoting economic growth. The findings emphasize the prominence of overcoming institutional weaknesses and establishing transparent public policy governing businesses as a pre-requisite for successful universal integration in developing countries.

Keywords: economic growth; institutional development; financial development; MENA region (search for similar items in EconPapers)
JEL-codes: G2 O16 P48 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015-01
New Economics Papers: this item is included in nep-ara, nep-cse and nep-fdg
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Published in: International Journal of Social Economics, 2015, 42 (8), 717-732

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