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Regional Integration and Natural Resources: who benefits? Evidence from MENA

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  • Céline Carrère
  • Julien Gourdon
  • Marcelo Olarreaga

Abstract

This paper is built on Venables (2011) theoretical predictions which show that gains from regional integration are unevenly distributed between resource rich and poor countries. We explore the effects of different integration schemes in Middle East and North Africa. Results suggest that within Pan Arab Free Trade Agreement (PAFTA), there is significant trade creation for resource poor countries associated with regional integration, and no evidence of trade diversion. In resource rich countries, however, there is evidence of pure trade diversion in both resource-rich/labor-abundant countries and resource-rich/labor-importing countries. This underscores the idea that regional integration can help to spread benefits of unevenly distributed resource wealth among the region’s economies.

Suggested Citation

  • Céline Carrère & Julien Gourdon & Marcelo Olarreaga, 2012. "Regional Integration and Natural Resources: who benefits? Evidence from MENA," Working Papers 2012-09, CEPII research center.
    • Handle: RePEc:cii:cepidt:2012-09
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    References listed on IDEAS

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    1. Péridy, Nicolas & Abedini, Javad, 2008. "The Greater Arab Free Trade Area(GAFTA): an Estimation of Its Trade Effects," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 848-872.
    2. Olivier Cadot & Céline Carrère & Vanessa Strauss-Kahn, 2011. "Export Diversification: What's behind the Hump?," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 590-605, May.
    3. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
    4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    5. Hoekman, Bernard & Zarrouk, Jamel, 2009. "Changes in cross-border trade costs in the Pan-Arab free trade area, 2001-2008," Policy Research Working Paper Series 5031, The World Bank.
    6. Richard Pomfret, 1997. "The economic cooperation organization: Current status and future prospects," Europe-Asia Studies, Taylor & Francis Journals, vol. 49(4), pages 657-667.
    7. Schiff, Maurice & Winters, L Alan, 1998. "Regional Integration as Diplomacy," The World Bank Economic Review, World Bank, vol. 12(2), pages 271-295, May.
    8. Carrere, Celine, 2006. "Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model," European Economic Review, Elsevier, vol. 50(2), pages 223-247, February.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Regional integration and natural resources : who benefits ? evidence from MENA
      by aamighini in NEP-INT blog on 2012-02-22 18:23:40
    2. Regional integration and natural resources : who benefits ? evidence from MENA
      by aamighini in NEP-INT blog on 2012-02-22 18:23:40

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    Cited by:

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    3. Saud, Shah & Haseeb, Abdul & Zafar, Muhammad Wasif & Li, Huiyun, 2023. "Articulating natural resource abundance, economic complexity, education and environmental sustainability in MENA countries: Evidence from advanced panel estimation," Resources Policy, Elsevier, vol. 80(C).
    4. Naima Sadaoui & Lotfi Zabat & Habib Sekrafi & Mehdi Abid, 2024. "The moderating role of natural resources between governance and CO2 emissions: Evidence from MENA countries," Energy & Environment, , vol. 35(3), pages 1597-1615, May.

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    More about this item

    Keywords

    Regionalism; MENA; PAFTA; OIL;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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    This paper has been announced in the following NEP Reports:

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