Sovereign debt sustainability in MENA countries: Determinants and policy implications
This paper examines sovereign debt sustainability in the Middle East and North Africa (MENA) region by comprehensively analyzing macroeconomic, institutional, and geopolitical determinants. Using a panel dataset of 15 MENA countries spanning 2000-2023, we employ dynamic panel estimation techniques t...
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| Format: | Article |
| Language: | English |
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Modern Finance Institute
2025-05-01
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| Series: | Modern Finance |
| Subjects: | |
| Online Access: | https://mf-journal.com/article/view/274 |
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| Summary: | This paper examines sovereign debt sustainability in the Middle East and North Africa (MENA) region by comprehensively analyzing macroeconomic, institutional, and geopolitical determinants. Using a panel dataset of 15 MENA countries spanning 2000-2023, we employ dynamic panel estimation techniques to identify key factors affecting debt sustainability. Our findings reveal significant heterogeneity across the region, with oil-exporting countries demonstrating distinct debt dynamics compared to oil-importing nations. Institutional quality and governance indicators emerge as critical predictors of debt sustainability beyond traditional macroeconomic variables. Furthermore, our threshold analysis identifies specific debt-to-GDP levels at which growth effects become negative, varying substantially across country groups. The results underscore the importance of tailored policy approaches to regional debt management, challenging one-size-fits-all recommendations from international financial institutions. This research contributes to the literature by developing a novel composite debt sustainability index and providing empirical evidence on the region-specific determinants of sustainable sovereign debt management.
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| ISSN: | 2956-7742 |