Inclusive Growth in MENA: The Transformative Roles of Financial Inclusion, Female Labour Force Participation, and Governance

Abstract

This study examines the factors determining economic growth in the Middle East and North Africa (MENA) region, with a focus on financial inclusion, female labour force participation, and institutions and governance. Using an unbalanced panel dataset with 189 observations, the analysis uses pooled and fixed-effects regressions to control for cross-sectional heterogeneity. The results indicate that while the density of ATMs is negatively correlated with GDP growth, the presence of bank branches is positively correlated but not statistically significant. Female labour force participation has an important impact on increasing GDP growth, highlighting the economic benefits of gender inclusion. Among the governance indicators, control of corruption has a near-significant positive impact, stressing the importance of anti-corruption efforts. Other governance factors have no significant impact on growth, suggesting that their impact may be contingent on other variables. This study makes several policy recommendations to improve financial inclusion, gender parity in the labour market, and efforts to combat corruption to achieve sustainable economic development in the MENA region.