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Journal of Economic Integration 2012 March;27(1) :80-114.
Regional Integration and Real Convergence: Evidence from MENA Countries

Nicolas Péridy Corinne Bagoulla 

LEAD, UFR Sciences Economiques et Gestion., Université du Sud Toulon-Var, Avenue de l‘Universite, BP 20132, F-83957 La Garde Cedex. Tel : +33 494 142 982. E-mail :
LEMNA, Institut d‘Economie et de Management- IAE, Université de Nantes, France
Copyright ©2012 Journal of Economic Integration

This article analyses and explains the real convergence process in MENA countries over the past 50 years. It provides a threefold contribution. Firstly, given the recent increasing attention paid to the Euro-Mediterranean area, it focuses on the convergence of MENA countries towards the EU per capita income. Second, it provides an econometric modelling of the determinants of convergence. Finally, it is based on a wide set of convergence indicators applied to various measures of per capita income as well as the Human Development Index (HDI). Results show that despite a lack of s-convergence for the MENA region taken as a whole, the convergence hypothesis is accepted using the g and β-convergence tests, especially for Tunisia, Egypt, Turkey and Morocco. However, there is evidence of divergence for Jordan and Algeria. It is also shown that the convergence process strongly depends on education, R&D, transport and infrastructure as well as public investment. By contrast, there is no direct impact of the regional integration process with the EU, although the EIB loans positively contribute to the convergence process. Finally, trade specialization and firm agglomeration have been detrimental to convergence of MENA countries.

JEL Classification: O47

Keywords: Convergence | Growth | MENA Countries | Panel Data
1. Amable, B. (2000), “International Specialisation and Growth”, Structural Change and Economic Dynamics, 11, 413-431.
2. Baier, S., J. Bergstrand and P. Egger. (2009), “The Growth of Regional Economic Integration Agreements and the Middle-East”, Région et Développement, 29, 11-30.
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