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Working Paper Series - Reviving Growth in the Arab World



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Reviving Growth in the Arab World


Volume : 0

No : 0

ISSN : WPS0206

Publisher : Arab Planning Institute - Kuwait

Author (s) : Ibrahim A. Elbadawi 

Published Date : 1/1/2002


Contents :
This paper analyzes overalleconomic growth performance in the Arab world since the mid 1960s, with the keyobjective of developing a better understanding about what drives the growthprocess in the Arab region. Growth in the region since 1985 has been ratherdisappointing, both relative to the best performers in the developing world aswell as compared to the pre-1985 period . Revitalizing growth in the Arab worldwould, therefore, suggests asking two pivotal questions: why has growth in theArab world lagged behind those developing countries that could be taken torepresent the frontier in terms of the development discourse (East Asia)?, andwhy has growth been so erratic and unstable in the Arab world? To address thesetwo questions, I estimate two growth models on the determinants of long-termgrowth and the persistence of growth, using global panel data drawn from morethan 130 countries. Consistent with received wisdom, our results suggest thatgrowth is associated with some broad fundamentals: effective institutions forprotection of property rights, stable macroeconomic environment, adequate humancapital and favorable initial conditions. In the Arab world, however, ourresults also show that growth does not happen without deliberate developmentstrategies for exploiting (and/or overcoming) country-specific orregion-specific potentials (constraints). We find two such growth potentialsand one development constraint to be important in explaining the growth processin the Arab world: the advantage of location and geography; associated withexport competitiveness and capacity to attract direct foreign investment; the?demographic gift?, associated with the demographic transition to lower agedependency; and the preponderance of regional and civil conflicts, with theirmultiple negative consequences for developmen

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