Empirical Exploration of Economic Policy in the Middle East and North Africa (MENA) Region: An ARDL Approach

Abstract

This article delves into the analysis of the effectiveness of economic policies implemented in 20 countries in the Middle East and North Africa (MENA) region. The countries considered include Algeria, Saudi Arabia, the Palestinian Authority, Bahrain, Djibouti, the United Arab Emirates, Egypt, Iraq, Iran, Jordan, Kuwait, Lebanon, Libya, Morocco, Mauritania, Oman, Qatar, Syria, Tunisia, and Yemen. The study is based on an Autoregressive Distributed Lag (ARDL) regression model, employing the Ordinary Least Squares (OLS) method. This model is suitable for non-stationary time series and those with a mixed order of integration. The analysis covers the period from 2000 to 2023.The results obtained highlight the diversity of the impacts of economic policies, strongly influenced by the specific economic and social contexts of each country. Governments, in their pursuit of efficiency and sustainability, are often faced with the delicate balance between multiple objectives. Among the measures considered are the money supply, inflation rate, government spending, and structural reforms. These measures have demonstrated their effectiveness in stimulating economic growth, promoting economic activity, encouraging investment, and creating employment opportunities. Monetary and fiscal policies are also crucial levers aimed at maintaining macroeconomic stability. This is expressed notably through controlling inflation, managing budget deficits, and ensuring the stability of the financial system. The results of econometric tests converge towards unanimous conclusions, suggesting the existence of one-directional causal relationships between economic growth and specific indicators of economic policy. This in-depth understanding of regional economic dynamics provides valuable insights for tailoring economic policies to each national context within the MENA region.