Institutional quality and sustainability: empirical study in 11 MENA countries

Abstract

In this paper, we analyse the impact of the institutional quality on the sustainable development in 11 MENA countries during the period 1996-2021. Despite the significant improvement that has known some countries in recent years in terms of development indicators, the MENA authorities still require more efforts to improve their governance and to enhance the developmental impact of oil revenues. However, the deterioration of the institutional environment indicators remains the biggest obstacle to achieve the development goals, and limits the effectiveness of economic reforms. We find with FMOLS, DOLS and CCR estimations that there is a positive and significant relationship between the adjusted net saving as sustainable development factor and the institutional quality index at the level of 1%. However, when squared adjusted net savings is included, the relationship turns negative, indicating that there is still evidence of a fragile political framework and a frail understanding of politics in MENA nations.

Keywords

• institutional quality
• sustainable development
• mena countries
• adjusted net saving