Rents, financial development, and economic growth in MENA countries, 2000–2020
Rents, financial development, and economic growth in MENA countries, 2000–2020

Summary/Abstract: This paper investigates the role of natural resource rent and other forms of rent on the economic growth of Middle Eastern and North African (MENA) countries within the framework of the rent curse theory. Rent curse theory suggests that while certain types of rent, such as geopolitical, regulatory, and labour rent, can hinder growth, others may act as incentives. Employing the partial least squares structural equation model (PLS-SEM), this study examines the impact of rent and financial development on economic growth in the region. The empirical findings reveal that forms of rent derived from natural resources and regulatory rent have a negative effect on financial development and economic growth, but labour rent and geopolitical rent do not have any contribution to economic growth, so the rent curse theory cannot be confirmed by these two sources of rent. Furthermore. The result indicates that financial development is a crucial factor for economic progress. Moreover, the study suggests that globali-zation can enhance financial development in MENA countries and stimulate growth.

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