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<p>The question of governance’s contribution to economic development is becoming increasingly relevant, particularly in light of the challenges posed by institutional quality and unbalanced growth across countries. This study investigates the asymmetric relationship between governance and economic growth in a sample of countries from the Middle East and North Africa (MENA) region over the period 1996 − 2019. The analysis relies on various econometric methods, including stationarity and cointegration tests, as well as long-term estimation techniques such as Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS). Special attention is given to the use of Principal Component Analysis (PCA) to construct a composite governance index. The results indicate that governance has a positive and significant impact on economic growth, highlighting the importance of a transparent, stable, and efficient institutional framework. Strengthening governance through robust legal systems and effective anti-corruption measures contributes to sustained economic development. These findings offer valuable insights for policymakers in the MENA region, emphasizing the critical role that strong institutions play in promoting long-term economic performance.</p>

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Governance Quality and Economic Growth in the MENA Region: Evidence from a Principal Component Analysis and Panel Cointegration Approach

  • 期刊论文

  • 发表日期：

    2026年3月28日

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  • Hayet Kaddachi,
  • Naceur Benzina

摘要

The question of governance’s contribution to economic development is becoming increasingly relevant, particularly in light of the challenges posed by institutional quality and unbalanced growth across countries. This study investigates the asymmetric relationship between governance and economic growth in a sample of countries from the Middle East and North Africa (MENA) region over the period 1996 − 2019. The analysis relies on various econometric methods, including stationarity and cointegration tests, as well as long-term estimation techniques such as Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS). Special attention is given to the use of Principal Component Analysis (PCA) to construct a composite governance index. The results indicate that governance has a positive and significant impact on economic growth, highlighting the importance of a transparent, stable, and efficient institutional framework. Strengthening governance through robust legal systems and effective anti-corruption measures contributes to sustained economic development. These findings offer valuable insights for policymakers in the MENA region, emphasizing the critical role that strong institutions play in promoting long-term economic performance.