Abstract
Despite the global liberalization of trade, financial and technological flows, there still are tremendous disparities in terms of income per capita and growth rates across countries (Hall and Jones, 1999). Among the plethora of explanations proposed in the economic literature on this phenomenon, institutions have become a common factor for long-term economic performance (Acemoglu et al., 2001) as well as international activities such as trade (Dollar and Kraay, 2003) and foreign direct investments (Ali et al., 2010) and the legitimacy or failure of states (Subramanian et al., 2004). Given these pivotal implications of institutions for the social and economic welfare of countries, this chapter proposes to review the current institutional background of countries in the Middle East and North Africa (MENA) region and provide some insights into the historical and more recent evolution of formal institutions in this part of the world.
Access provided by Autonomous University of Puebla. Download to read the full chapter text
Chapter PDF
Similar content being viewed by others
Keywords
- Foreign Direct Investment
- Saudi Arabia
- Comparative International Development
- Economic Freedom
- Institutional Quality
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
References
Acemoglu, D., Johnson, S., and Robinson, J. A. (2000). The Colonial Origins of Comparative Development: An Empirical investigation. National Bureau of Economic Research Working Paper Series, No. 7771.
Acemoglu, D., Johnson, S., and Robinson, J. A. (2001). The colonial origins of comparative development: An empirical investigation. American Economic Review, 91 (5): 1369–1401.
Acemoglu, D., Johnson, S., and Robinson, J. A. (2002). Reversal of fortune: geography and institutions in the making of the modern world income distribution. Quarterly Journal of Economics, 117: 1231–1294.
Acemoglu, D., Johnson, S., and Robinson, J. A. (2005). The rise of Europe: Atlantic trade, institutional change, and economic growth. American Economic Review, 95 (3): 546–579.
Acemoglu, D., and Robinson, J. A. (2008). Persistence of power, elites, and institutions. American Economic Review, 98 (1): 267–293.
Ali, F. A., Fiess, N., and MacDonald, R. (2010). Do institutions matter for foreign direct investment? Open Economic Review, 21 (2): 201–219.
Arndt, C., and Oman, C. (2006). Uses and Abuses of Governance Indicators. Paris: Development Centre, OECD.
Asiedu, E. (2003). Debt relief and institutional reform: A focus on heavily indebted poor countries. The Quarterly Review of Economics and Finance, 43 (4): 614–626.
Asiedu, E. (2006). Foreign direct investment in Africa: The role of natural resources, market size, government policy, institutions and political instability. The World Economy, 29 (1): 63–77.
Baliamoune-Lutz, M., and Ndikumana, L. (2007). The Growth Effects of Openness to Trade and the Role of Institutions: New Evidence from African Countries. Working Paper, No. 2007–05.
Banerjee, A., Iyer, L., and Somanathan, R. (2005). History, social divisions, and public goods in rural India. Journal of the European Economic Association, 3 (2–3): 639–647.
Bardhan, P. (2005). Institutions matter, but which ones? Economics of Transition, 13 (3): 499–532.
Bhattacharya, R., and Wolde, H. (2010). Constraints on Growth in the MENA Region. International Monetary Fund: Washington, D.C.
Commander, S. J., and Nikoloski, Z. (2010). Institutions and Economic Performance: What Can Be Explained? IZA Discussion Papers, No. 5247.
Dietsche, E. (2007). Why the Quality of Institutions Is Not a Cure for the “Resource Curse.” The Journal of Energy and Development, 32 (2): 262–282.
Dixit, A. (2004). Lawlessness and Economics: Alternative Modes of Governance. Princeton, NJ: Princeton University Press.
Doing Business. (2014). Understanding regulations for small and medium-size enterprises. The World Bank: Washington, D.C.
Dollar, D., and Kraay, A. (2003). Institutions, trade, and growth. Journal of monetary economics, 50 (1): 133–162.
Easterly, W., and Levine, R. (2002). Tropics, Germs, and Crops: How Endowments Influence Economic Development. NBER Working Papers, No. 9106. National Bureau of Economic Research.
Engerman, S. L., and Sokoloff, K. L. (2000). Institutions, factors endowments, and paths of development in the new world. The Journal of Economic Perspectives, 14 (3): 217–232.
Fatás, A., and Mihov, I. (2005). Policy volatility, institutions and economic growth. The Review of Economics and Statistics, 95 (2): 362–376.
Glaeser, E., La Porta, R., Lopez-de-Silanes, F., and Shleifer, A. (2004). Do institutions cause growth? Journal of Economic Growth, 9 (3): 271–303.
Greif, A. (2000). The fundamental problem of exchange: A research agenda in historical institutional analysis. European Review of Economic History, 4 (3): 251–284.
Hall R.E. and Jones, C. (1999). Why do some countries produce so much more output per worker than others? Quarterly Journal of Economics, 114 (1): 83–116.
Hodgson, G. M. (2006). What Are Institutions? Journal of Economic Issues, 40 (1): 1–25.
Kaufmann, D., and Kraay, A. (2003). Governance and Growth: Causality Which Way? Evidence for the World, in brief. Manuscript. World Bank publication.
Kaufmann, D., Kraay, A., and Mastruzzi, M. (2010). The Worldwide Governance Indicators: Methodology and Analytical Issues. World Bank Policy Research Working Paper, No. 5430.
Kaufmann, D. (2011). Governance and the Arab World Transition: Reflections, Empirics and Implications for the International Community. Brookings Report.
Keefer, P. and Stasavage, D. (2002). Checks and balances, private information, and the credibility of monetary commitments. International Organization, 56 (4): 751–774.
Kim A. B., and Miller, T. (2015). Index of Economic Freedom. Washington, DC: The Heritage Foundation and Dow Jones & Company Inc.
Kinda, T., Plane, P., and Véganzonès-Varoudakis, M. A. (2011). Firm productivity and investment climate in developing countries: how does Middle East and North Africa manufacturing perform? The Developing Economies, 49 (4): 429–462.
Knack, S., and Keefer, P. (1995). Institutions and economic performance: Cross-country tests using alternative institutional indicators. Economics & Politics, 7 (3): 207–227.
Lee, K., and Kim, B. Y. (2009). Both institutions and policies matter but differently for different income groups of countries: Determinants of long-run economic growth revisited. World Development, 37 (3): 533–549.
Miletkov, M., and Wintoki, M.B. (2012). Financial development and the evolution of property rights and legal institutions. Emerging Markets Review, 13 (4): 650–673.
Müller-Steinhagen, H., and Trieb, F. (2007). Renewable Energies in the MENA Region: Potential for Sustainable Energy Provision and Export to Europe. Oberpfaffenhofen: German Aerospace Center, DLR, Institute of Technical Thermodynamics.
North, D. C. (1981). Structure and Change in Economic History. Douglass C. North, New York.
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
Olson, M. (1982). The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven, CT and London: Yale University Press.
Olson, M. (1993). Dictatorship, democracy, and development. American Political Science Review, 87 (03): 567–576.
Pfeifer, K. (1999). Parameters of economic reform in North Africa. Review of African Political Economy, 26 (82): 441–454.
Rigobon, R., and Rodrik, D. (2005). Rule of law, democracy, openness, and income. Economics of Transition, 13 (3): 533–564.
Robinson, J. A., Torvik, R., and Verdier, T. (2006). Political foundations of the resource curse. Journal of Development Economics, 79 (2): 447–468.
Rodrik, D. (2000). Institutions for high-quality growth: what they are and how to acquire them. Studies in Comparative International Development, 35 (3): 3–31.
Rodrik, D. (2008). The real exchange rate and economic growth. Brookings papers on economic activity, 2008 (Vol 2): 365–412.
Rodrik, D., Subramanian, A., and Trebbi, F. (2004). Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9 (2): 131–165.
Rosen, L. (2006). Expecting the Unexpected: Cultural Components of Arab Governance. The Annals of the American Academy of Political and Social Science, 603 (1): 163–178.
Schotter, A. (1981). The Economic Theory of Social Institutions. New York: Cambridge University Press.
Subramanian, A., Trebbi, F. and Rodrik, D. (2004). Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9 (2): 131–165.
Voigt, S. (2013). How (Not) to measure institutions. Journal of Institutional Economics, 9 (1): 1–26.
Woodruff, D. M. (2006). Understanding rules and institutions: possibilities and limits of game theory. Qualitative Methods Newsletter, 4 (1): 13–17.
World Bank. (2008). World Development Indicators. The World Bank, Washington DC
Editor information
Copyright information
© 2016 Mohamed Sami Ben Ali and Sorin M. S. Krammer
About this chapter
Cite this chapter
Ben Ali, M.S., Krammer, S.M.S. (2016). The Role of Institutions in Economic Development. In: Ben Ali, M.S. (eds) Economic Development in the Middle East and North Africa. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137480668_1
Download citation
DOI: https://doi.org/10.1057/9781137480668_1
Publisher Name: Palgrave Macmillan, New York
Print ISBN: 978-1-349-55918-3
Online ISBN: 978-1-137-48066-8
eBook Packages: Economics and FinanceEconomics and Finance (R0)