I. A growing number of publications and

I.       
Background to
research task :

 

Introduction: 

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A growing number of publications and literature
has examined the link between institutions and Economic Growth.

This research aims to investigate the relation between institutional
quality and economic growth in four North African countries:  Morocco, Algeria, Tunisia
and Egypt.

 It is worth to mention that the first three countries
have a lot in common:

·        
An identical colonial heritage ( French occupation ) ,

·        
similar racial composition ( Arabs and Amazighs  ) ,

·        
Language (Arabic and Amazigh).

·        
French is still the also the business language. Nevertheless, the use of
English has been growing steadily in recent years.

Egypt shares the Arabic
culture and Language, but differs in terms of its trade partners.

Both Morocco and
Tunisia have been following important economic reforms, including trade policy
reforms, since the second half of the 1980s. Thus, the divergence with the
experience of Algeria should provide some interesting ideas.

 In addition to that, the type of institutions
built by the French colonial administration in Morocco and Tunisia is
consistent with the proposition held in Acemoglu et al. (2003) in the sense that colonial powers (Europeans) ‘were
more likely to introduce extractive institutions in regions where they did not
plan to settle’.

Nevertheless, the
French colonial power planned to settle in Algeria and, annexed the country to
the French Territoire. According to
the contention in Acemoglu et al.,
Algeria should have emerged with better institutions. The historical facts
since independence in the early 1960s
indicate that this was not the case. In fact, Algeria has much worse
institutions than Morocco or Tunisia.

These countries have been adopting a range
of policy reforms for several decades. The most obvious are reforms related to trade.
Financial reforms gained a great deal of popularity back in the 1980s.

The Arab Spring of 2011
brought much political instability to Both Egypt and Tunisia and was caused mostly
by unemployment, corruption and aging dictatorship.

 Morocco and Algeria were relatively unaffected
by the unrest despite having similar problems.

.

The fact that some
policies may not lead the anticipated results because of the variance in
institutional quality among countries is not surprising.