An analysis of economic growth, productivity and convergence of Middle East and north African countries

Abstract EN

The objective of this study is to investigate the spatial and temporal variations in economic growth and productivity of the Middle East and North African countries over the period 1970-2014.

The study employs standard growth accounting approach to measure and decompose growth of total output into contributions from technological progress and factor accumulation.

It also tests the hypothesis of regional convergence in the neo-classical framework.

The results of the study suggest that oil-dependent economies have shown significant growth variations that may be associated with movements in oil prices.

In most oil-based economies, growth rates of per capita GDP and per worker GDP are quite meagre due to rapid growth in population and labour force (both nationals and immigrants).

The results of growth accounting indicate that output growth in the region is due to the accumulation of factor inputs, while TFP does not play a significant role.

Both p and a tests of convergence suggest that there is convergence in per worker GDP (labour productivity) and per capita GDP.

The study recommends the adoption of large scale structural reforms to achieve sustained long-run growth in addition to the economic diversification of the individual countries to reduce dependence on single sources of income and employment would diminish the volatility of income and employment.