Does the Quality of Institutions Limit the Mena's Integration in the World Economy?

24 Pages Posted: 9 Oct 2004

See all articles by Pierre-Guillaume Meon

Pierre-Guillaume Meon

Université Libre de Bruxelles (ULB); Université Robert Schuman Strasbourg III

Khalid Sekkat

Université Libre de Bruxelles (ULB)

Abstract

Using a large sample of countries over the 1990s, this paper examines the extent to which institutions' functioning disables a greater participation of the Middle East and North Africa (MENA) in the world economy. It focuses on the impact on manufactured exports and FDI attractiveness and considers a broad index of political risk as well as indices targeted toward specific aspects of governance (corruption, government effectiveness and the rule of law). The results are robust to different econometric approaches and lend strong support to the hypothesis that the functioning of institutions may disable the participation of MENA countries in the world economy. They suggest that the impact of an improvement in the quality of institutions may result in a sensitive increase of FDI inflows and manufactured exports. That increase is comparable to the one resulting from liberalisation policies. Hence, although institutional reforms can take time, they deserve the necessary efforts given their outcomes as compared to other reforms.

Suggested Citation

Meon, Pierre-Guillaume and Sekkat, Khalid, Does the Quality of Institutions Limit the Mena's Integration in the World Economy?. Available at SSRN: https://ssrn.com/abstract=602679

Pierre-Guillaume Meon (Contact Author)

Université Libre de Bruxelles (ULB) ( email )

CP 132 Av FD Roosevelt 50
Brussels, Brussels 1050
Belgium

Université Robert Schuman Strasbourg III ( email )

47, Avenue de la Foret-Noire
Institut d'Etudes Politiques
67082 Strasbourg Cedex
France
33 3 88 41 77 21 (Phone)
33 3 88 41 77 78 (Fax)

Khalid Sekkat

Université Libre de Bruxelles (ULB) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

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