Geography versus Institutions: New Perspectives on the Growth of Africa and the Middle East

This article examines the growth performance of Africa and the Middle East for the period 1990–2005. It employs a Bayesian model-averaging method that constructs estimates as a weighted average of spatial autoregressive estimates for every possible combination of included variables. One of the results is that the inclusion of spatial dependences has a direct impact on the determinants of growth in Africa and the Middle East. A main contribution of this article is to consider geographical effects in a more flexible way, which allows an enriched comprehension of the role of institutional factors in explaining low economic development.