Economic Growth, Productivity and Convergence of Middle East and North African Countries

The present study tried to explore the spatial and temporal variation in economic growth and productivity of Middle East and North African countries for the period 1971-2014. Further, we also tested the hypothesis of regional convergence in neo-classical framework. The study is based on the Penn World Table data of sample of Middle East and North African countries. Our findings suggests that oil-dependent economies have shown large variations in growth which can be linked with the fluctuations of oil price. Due to rapid population and labour force growth (both nationals and immigrants) in most of the oil based economies, growth rates of per capita GDP and per worker GDP are quite meagre. Total factor productivity does not play a significant role and growth in the region is due to the capital accumulation. Both beta and sigma measures of convergence suggest that there is convergence in per worker GDP (labour productivity) and per capita GDP. The study favours adoption of large scale structural reforms to achieve sustained long run growth rates. At the same time economic diversification would reduce the volatility of income and employment