Key Challenges and Policy Reforms in the MENA Region: An Economic Perspective (Perspectives on Development in the Middle East and North Africa (MENA) Region)

This volume addresses economic challenges and policy reforms in the Middle East and North Africa (MENA) region. Despite important resources and strategic advantages, the region suffers from a number of economic, social, and political problems that impedes normal economic take-off. The volume contains theoretical and empirical studies covering individual countries and panel studies addressing these economic challenges. Chapters address issues such as economic growth; poverty and inequality; subsidies and public finances policies; external trade and financial liberalization; remittances,corruption, transparency, and institutions; renewable energy, digitalization, terrorism, regional integration, capital flight,money laundering, financial development and brain drain. Providing a comprehensive understanding of the most important and urgent economic challenges in the region, this volume will be a useful reference for researchers and policymakers interested in the MENA region. Contents About the Editor Chapter 1: Terrorism Impact on Public Debt and Government Borrowing Cost: New Empirical Evidence from Long-Run Relationship in MENA Countries 1.1 Introduction 1.2 Literature Review: Terrorism, Economic Growth, and Public Borrowing 1.3 Research Methodology 1.3.1 Data Description and Econometric Model 1.3.2 Econometric Methodology 1.4 Results and Discussion 1.4.1 Cross-Sectional Dependence, Homogeneity, and Unit Root Test 1.4.2 Findings of Panel Cointegration Tests 1.4.3 Findings from Fully Modified Ordinary Least Square (FMOLS) 1.4.4 Results of Dumitrescu and Hurlin (2012) Panel Causality Test 1.5 Conclusions and Policy Implications Appendices Appendix 1 Appendix 2 Appendix 3 Appendix 4 Descriptive Statistics References Chapter 2: Digital Gaps and Economic Inequalities in MENA Countries: An Empirical Investigation 2.1 Introduction 2.2 Context and Background 2.3 Data and Empirical Settings 2.3.1 Data 2.3.2 Methodological Approach 2.4 Empirical Analysis Results 2.5 Concluding Remarks and Policy Implications Appendix References Chapter 3: Assessing the Determinants of Capital Flight from Tunisia: An ARDL Investigation Framework 3.1 Introduction 3.2 Natural Resources in Tunisia: A Close Look 3.3 The Empirical Framework: Data, Model, and Methodology 3.4 Results and Discussion 3.5 Conclusions and Policy Implications Appendix References Chapter 4: Assessing Macroeconomic, Distributive, and Environmental Impacts of Energy Subsidy Removal in Tunisia with Input–Output Modeling 4.1 Introduction 4.2 Subsidy Policy and Energy Sector in Tunisia 4.2.1 The Subsidy Policy and the Energy Sector 4.3 Electricity Industry, Pricing Policy, and Subsidies 4.4 Methodology 4.4.1 Assessing the Subsidy Based on the Price Gap Approach 4.4.2 Assessing the Price and Distributional Impacts of Energy Subsidy: Input–Output Analysis 4.4.3 Impact on Final Demand, Production, Energy Consumption, and CO2 Emissions: Partial Equilibrium Model 4.5 Empirical Results and Economic Implications 4.5.1 Subsidy Rates of Electricity and Gas in Tunisia 4.5.2 Price and Distributional Impacts 4.5.3 Impact on Final Demand, Production, Energy Consumption, and CO2 Emissions 4.6 Conclusion and Some Policy Recommendations References Chapter 5: Remittances, Income Inequality, and Brain Drain: An Empirical Investigation for the MENA Region 5.1 Introduction 5.2 Remittances: A Literature Overview 5.3 Do Remittances Affect Income Inequality in MENA Countries? 5.4 Conclusions and Policy Implications References Chapter 6: Digital Divide and External Trade Liberalization in the MENA Region: A Theoretical and Empirical Investigations 6.1 Introduction 6.2 The Digital Divide in the MENA Region 6.2.1 Comparisons of the Penetration Levels of Internet, Fixed Broadband, and Mobile Broadband Between MENA Countries and Other Countries 6.2.2 The Digital Divide Within the MENA Region 6.3 Digitalization and External Trade Liberalization in the MENA Region 6.3.1 ICTs and External Trade Liberalization 6.3.2 The External Trade Liberalization in the MENA Region 6.3.3 The Impacts of Internet and Broadband on the External Trade Liberalization in the MENA Region 6.4 Conclusions and Policy Implications References Chapter 7: The Relationship Between Money Laundering and Economic Growth in the MENA Region—A Simultaneous Equation Model 7.1 Introduction 7.2 Money Laundering and Economic Growth: Literature Overview 7.3 Model, Data, and Methodology 7.4 Results and Discussion 7.5 Conclusion and Policy Implications Appendices Appendix 1: Calculation of ML’s Determinants Appendix 2: Descriptive statistics Appendix 3: Correlations Matrix Appendix 4: VIF Test (First Equation of the Model) Appendix 5: VIF Test (Second Equation of the Model) Appendix 6: Hausman Test Appendix 7. First Stage of the Instrumental Variable Approach Appendix 8: Second Stage of the Instrumental Variable Approach References Chapter 8: The Institutional Approach to Financial Development: Panel Study for the MENA Region 8.1 Introduction 8.2 The Role of Institutions in Financial Development 8.2.1 What Is Social Capital? 8.2.2 The New Approach to the Effects of Financial Openness 8.3 Model, Data, and Methodology 8.4 Results and Discussion 8.4.1 Effects of Formal Institutions on Financial Development 8.4.2 Effect of Informal Institutions on Financial Development 8.5 Conclusions and Policy Implications References