Institutions, trade and geography : Implications for long-trem development in the arab world

Abstract EN

Over the past quarter century, standards of living in the Arab world have experienced relative stagnation, as reflected in the expanding income gaps between Arab countries and their East Asian and OECD counterparts over time.

The evidence suggests that for all categories of Arab countries, lack of confidence with regard to protection of property rights (rule of law) and deplorable standards of democracy are the main factors explaining the relative underdevelopment of the Arab world.

This is consistent with the global evidence in this literature and confirms the adage: "Institutions Rule".

However, in addition to its indirect influence through institutions, geography is also found to be directly associated with underdevelopment in some large, tropical and arid Arab countries.

This suggests that explicit consideration of the physical ecology of development should be given high priority as well