Governance and Private Investment in the Middle East and North Africa

This paper addresses the issue of the low level of private investment in the Middle East and North Africa (MENA) region, with special emphasis on the role of governance. Based on the existing literature, the authors categorize what types of governance institutions are more detrimental to entrepreneu...

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Main Authors: Aysan, Ahmet Faruk, Nabli, Mustapha Kamel, Véganzonès-Varoudakis, Marie-Ange
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
GDP
Online Access:http://documents.worldbank.org/curated/en/2006/06/6822686/governance-private-investment-middle-east-north-africa
http://hdl.handle.net/10986/8430
id okr-10986-8430
recordtype oai_dc
spelling okr-10986-84302021-04-23T14:02:40Z Governance and Private Investment in the Middle East and North Africa Aysan, Ahmet Faruk Nabli, Mustapha Kamel Véganzonès-Varoudakis, Marie-Ange ACCELERATOR ACCELERATOR EFFECT ACCOUNTABILITY ADMINISTRATIVE SYSTEM ADVERSE EFFECTS AGGREGATE DEMAND AGGREGATE INDICATOR ASYMMETRIC INFORMATION BANKING SECTOR BUREAUCRACY BUREAUCRATIC QUALITY BUSINESS ENVIRONMENT CAPITAL ACCUMULATION CAPITAL FORMATION CAPITAL STOCK CAPITAL THEORY CITIZENS CIVIL LIBERTIES CIVIL RIGHTS COMPETITIVE MARKETS COMPETITIVENESS CONSENSUS CORRUPTION COST OF CAPITAL CRISES DEBT DECISION-MAKING DECISION-MAKING PROCESS DEMOCRATIC ACCOUNTABILITY DEMOCRATIC INSTITUTIONS DEMOCRATIC PARTICIPATION ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC REFORMS ECONOMIES OF SCALE EDUCATIONAL ATTAINMENT ENDOGENOUS VARIABLES EQUATIONS EXPORTS EXTERNAL FINANCING FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL MARKETS FINANCIAL SYSTEM FIXED CAPITAL GDP GDP PER CAPITA GOOD GOVERNANCE GOVERNANCE DATA GOVERNANCE INDICATORS GOVERNANCE INSTITUTIONS GOVERNANCE PERFORMANCE GOVERNANCE QUALITY GOVERNANCE VARIABLES GOVERNMENT EFFECTIVENESS GOVERNMENT OFFICIALS GOVERNMENT REGULATIONS GOVERNMENT SERVICES GROWTH MODEL GROWTH RATE HUMAN CAPITAL HUMAN DEVELOPMENT INCOME INEQUALITY INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL CHANGE INSTITUTIONAL QUALITY INTEREST RATE INTERNATIONAL FINANCE INTERNATIONAL INVESTORS INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT FUNCTIONS INVESTMENT PROJECTS JUDICIARY LABOR COSTS LABOR FORCE LEGAL SYSTEM LEGITIMACY MACROECONOMICS MARGINAL BENEFIT MARGINAL COSTS MARKET SIZE MIDDLE EAST MIDDLE EASTERN NATURAL RESOURCES NORTH AFRICA OPTIMIZATION POLITICAL INSTABILITY POLITICAL PARTIES POLITICAL RIGHTS POLITICAL STABILITY POLITICAL SYSTEM POSITIVE EXTERNALITIES PRIVATE CAPITAL PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATE PROPERTY PRIVATE SECTOR PRODUCTION STRUCTURE PROFITABILITY PROPERTY RIGHTS PUBLIC ACCOUNTABILITY PUBLIC DEBT PUBLIC GOODS PUBLIC INVESTMENT PUBLIC SERVICES PUBLIC SUPPORT REAL INTEREST RATE REDUCING UNCERTAINTY REGULATORY QUALITY REVERSE CAUSALITY RULE OF LAW SKILLED WORKERS SOCIAL INSTITUTIONS STATE- OWNED ENTERPRISES STRUCTURAL REFORMS TAXATION TRADABLE GOODS TRADE POLICY TRADE REFORMS TRANSACTION COSTS TRANSPARENCY VESTED INTERESTS This paper addresses the issue of the low level of private investment in the Middle East and North Africa (MENA) region, with special emphasis on the role of governance. Based on the existing literature, the authors categorize what types of governance institutions are more detrimental to entrepreneurial investments. They then estimate a simultaneous model of private investment and governance quality where economic policies concurrently explain both variables. The empirical results show that governance plays a significant role in private investment decisions. This result is particularly true in the case of "administrative quality" in the form of control of corruption, bureaucratic quality, investment-friendly profile of administration, and law and order, as well as for "political stability." Evidence in favor of "public accountability" seems, however, less robust. The estimations also stress that structural reforms-such as financial development and trade openness-and human development affect private investment decisions directly, and/or through their positive impact on governance. These findings bring new empirical evidence on the subject of private investment in the developing world and in MENA countries in particular. 2012-06-19T16:40:52Z 2012-06-19T16:40:52Z 2006-06 http://documents.worldbank.org/curated/en/2006/06/6822686/governance-private-investment-middle-east-north-africa http://hdl.handle.net/10986/8430 English Policy Research Working Paper; No. 3934 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Middle East and North Africa
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCELERATOR
ACCELERATOR EFFECT
ACCOUNTABILITY
ADMINISTRATIVE SYSTEM
ADVERSE EFFECTS
AGGREGATE DEMAND
AGGREGATE INDICATOR
ASYMMETRIC INFORMATION
BANKING SECTOR
BUREAUCRACY
BUREAUCRATIC QUALITY
BUSINESS ENVIRONMENT
CAPITAL ACCUMULATION
CAPITAL FORMATION
CAPITAL STOCK
CAPITAL THEORY
CITIZENS
CIVIL LIBERTIES
CIVIL RIGHTS
COMPETITIVE MARKETS
COMPETITIVENESS
CONSENSUS
CORRUPTION
COST OF CAPITAL
CRISES
DEBT
DECISION-MAKING
DECISION-MAKING PROCESS
DEMOCRATIC ACCOUNTABILITY
DEMOCRATIC INSTITUTIONS
DEMOCRATIC PARTICIPATION
ECONOMETRIC ANALYSIS
ECONOMIC ACTIVITY
ECONOMIC GROWTH
ECONOMIC PERFORMANCE
ECONOMIC POLICIES
ECONOMIC POLICY
ECONOMIC REFORMS
ECONOMIES OF SCALE
EDUCATIONAL ATTAINMENT
ENDOGENOUS VARIABLES
EQUATIONS
EXPORTS
EXTERNAL FINANCING
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL MARKETS
FINANCIAL SYSTEM
FIXED CAPITAL
GDP
GDP PER CAPITA
GOOD GOVERNANCE
GOVERNANCE DATA
GOVERNANCE INDICATORS
GOVERNANCE INSTITUTIONS
GOVERNANCE PERFORMANCE
GOVERNANCE QUALITY
GOVERNANCE VARIABLES
GOVERNMENT EFFECTIVENESS
GOVERNMENT OFFICIALS
GOVERNMENT REGULATIONS
GOVERNMENT SERVICES
GROWTH MODEL
GROWTH RATE
HUMAN CAPITAL
HUMAN DEVELOPMENT
INCOME
INEQUALITY
INSTITUTIONAL ARRANGEMENTS
INSTITUTIONAL CHANGE
INSTITUTIONAL QUALITY
INTEREST RATE
INTERNATIONAL FINANCE
INTERNATIONAL INVESTORS
INVESTMENT CLIMATE
INVESTMENT DECISIONS
INVESTMENT FUNCTIONS
INVESTMENT PROJECTS
JUDICIARY
LABOR COSTS
LABOR FORCE
LEGAL SYSTEM
LEGITIMACY
MACROECONOMICS
MARGINAL BENEFIT
MARGINAL COSTS
MARKET SIZE
MIDDLE EAST
MIDDLE EASTERN
NATURAL RESOURCES
NORTH AFRICA
OPTIMIZATION
POLITICAL INSTABILITY
POLITICAL PARTIES
POLITICAL RIGHTS
POLITICAL STABILITY
POLITICAL SYSTEM
POSITIVE EXTERNALITIES
PRIVATE CAPITAL
PRIVATE INVESTMENT
PRIVATE INVESTMENTS
PRIVATE INVESTORS
PRIVATE PROPERTY
PRIVATE SECTOR
PRODUCTION STRUCTURE
PROFITABILITY
PROPERTY RIGHTS
PUBLIC ACCOUNTABILITY
PUBLIC DEBT
PUBLIC GOODS
PUBLIC INVESTMENT
PUBLIC SERVICES
PUBLIC SUPPORT
REAL INTEREST RATE
REDUCING UNCERTAINTY
REGULATORY QUALITY
REVERSE CAUSALITY
RULE OF LAW
SKILLED WORKERS
SOCIAL INSTITUTIONS
STATE- OWNED ENTERPRISES
STRUCTURAL REFORMS
TAXATION
TRADABLE GOODS
TRADE POLICY
TRADE REFORMS
TRANSACTION COSTS
TRANSPARENCY
VESTED INTERESTS
spellingShingle ACCELERATOR
ACCELERATOR EFFECT
ACCOUNTABILITY
ADMINISTRATIVE SYSTEM
ADVERSE EFFECTS
AGGREGATE DEMAND
AGGREGATE INDICATOR
ASYMMETRIC INFORMATION
BANKING SECTOR
BUREAUCRACY
BUREAUCRATIC QUALITY
BUSINESS ENVIRONMENT
CAPITAL ACCUMULATION
CAPITAL FORMATION
CAPITAL STOCK
CAPITAL THEORY
CITIZENS
CIVIL LIBERTIES
CIVIL RIGHTS
COMPETITIVE MARKETS
COMPETITIVENESS
CONSENSUS
CORRUPTION
COST OF CAPITAL
CRISES
DEBT
DECISION-MAKING
DECISION-MAKING PROCESS
DEMOCRATIC ACCOUNTABILITY
DEMOCRATIC INSTITUTIONS
DEMOCRATIC PARTICIPATION
ECONOMETRIC ANALYSIS
ECONOMIC ACTIVITY
ECONOMIC GROWTH
ECONOMIC PERFORMANCE
ECONOMIC POLICIES
ECONOMIC POLICY
ECONOMIC REFORMS
ECONOMIES OF SCALE
EDUCATIONAL ATTAINMENT
ENDOGENOUS VARIABLES
EQUATIONS
EXPORTS
EXTERNAL FINANCING
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL MARKETS
FINANCIAL SYSTEM
FIXED CAPITAL
GDP
GDP PER CAPITA
GOOD GOVERNANCE
GOVERNANCE DATA
GOVERNANCE INDICATORS
GOVERNANCE INSTITUTIONS
GOVERNANCE PERFORMANCE
GOVERNANCE QUALITY
GOVERNANCE VARIABLES
GOVERNMENT EFFECTIVENESS
GOVERNMENT OFFICIALS
GOVERNMENT REGULATIONS
GOVERNMENT SERVICES
GROWTH MODEL
GROWTH RATE
HUMAN CAPITAL
HUMAN DEVELOPMENT
INCOME
INEQUALITY
INSTITUTIONAL ARRANGEMENTS
INSTITUTIONAL CHANGE
INSTITUTIONAL QUALITY
INTEREST RATE
INTERNATIONAL FINANCE
INTERNATIONAL INVESTORS
INVESTMENT CLIMATE
INVESTMENT DECISIONS
INVESTMENT FUNCTIONS
INVESTMENT PROJECTS
JUDICIARY
LABOR COSTS
LABOR FORCE
LEGAL SYSTEM
LEGITIMACY
MACROECONOMICS
MARGINAL BENEFIT
MARGINAL COSTS
MARKET SIZE
MIDDLE EAST
MIDDLE EASTERN
NATURAL RESOURCES
NORTH AFRICA
OPTIMIZATION
POLITICAL INSTABILITY
POLITICAL PARTIES
POLITICAL RIGHTS
POLITICAL STABILITY
POLITICAL SYSTEM
POSITIVE EXTERNALITIES
PRIVATE CAPITAL
PRIVATE INVESTMENT
PRIVATE INVESTMENTS
PRIVATE INVESTORS
PRIVATE PROPERTY
PRIVATE SECTOR
PRODUCTION STRUCTURE
PROFITABILITY
PROPERTY RIGHTS
PUBLIC ACCOUNTABILITY
PUBLIC DEBT
PUBLIC GOODS
PUBLIC INVESTMENT
PUBLIC SERVICES
PUBLIC SUPPORT
REAL INTEREST RATE
REDUCING UNCERTAINTY
REGULATORY QUALITY
REVERSE CAUSALITY
RULE OF LAW
SKILLED WORKERS
SOCIAL INSTITUTIONS
STATE- OWNED ENTERPRISES
STRUCTURAL REFORMS
TAXATION
TRADABLE GOODS
TRADE POLICY
TRADE REFORMS
TRANSACTION COSTS
TRANSPARENCY
VESTED INTERESTS
Aysan, Ahmet Faruk
Nabli, Mustapha Kamel
Véganzonès-Varoudakis, Marie-Ange
Governance and Private Investment in the Middle East and North Africa
geographic_facet Middle East and North Africa
relation Policy Research Working Paper; No. 3934
description This paper addresses the issue of the low level of private investment in the Middle East and North Africa (MENA) region, with special emphasis on the role of governance. Based on the existing literature, the authors categorize what types of governance institutions are more detrimental to entrepreneurial investments. They then estimate a simultaneous model of private investment and governance quality where economic policies concurrently explain both variables. The empirical results show that governance plays a significant role in private investment decisions. This result is particularly true in the case of "administrative quality" in the form of control of corruption, bureaucratic quality, investment-friendly profile of administration, and law and order, as well as for "political stability." Evidence in favor of "public accountability" seems, however, less robust. The estimations also stress that structural reforms-such as financial development and trade openness-and human development affect private investment decisions directly, and/or through their positive impact on governance. These findings bring new empirical evidence on the subject of private investment in the developing world and in MENA countries in particular.
format Publications & Research :: Policy Research Working Paper
author Aysan, Ahmet Faruk
Nabli, Mustapha Kamel
Véganzonès-Varoudakis, Marie-Ange
author_facet Aysan, Ahmet Faruk
Nabli, Mustapha Kamel
Véganzonès-Varoudakis, Marie-Ange
author_sort Aysan, Ahmet Faruk
title Governance and Private Investment in the Middle East and North Africa
title_short Governance and Private Investment in the Middle East and North Africa
title_full Governance and Private Investment in the Middle East and North Africa
title_fullStr Governance and Private Investment in the Middle East and North Africa
title_full_unstemmed Governance and Private Investment in the Middle East and North Africa
title_sort governance and private investment in the middle east and north africa
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2006/06/6822686/governance-private-investment-middle-east-north-africa
http://hdl.handle.net/10986/8430
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