Abstract
This study examines the effect of trade openness on the health outcomes of 12 countries in the MENA (Middle East and North Africa) region: Algeria, Bahrain, Egypt, Jordan, Morocco, Kuwait, Oman, Qatar, Saudi Arabia, Tunisia, Turkey, and the UAE. By using a panel data investigation over 1970–2015, we check whether the trade of these countries with developed economies (using the proxy of G7 countries) and the rest of the world affects life expectancy and the infant mortality rate. We also assess the moderating effect of governmental corruption. Our findings show two interesting results. First, trade openness has a positive effect on health in the MENA region as it reduces the infant mortality rate and boosts life expectancy for both men and women. Second, better control over corruption and more focus on trade with developed countries would lead to more technology and information spillovers, which positively affect the health sector.
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Notes
Tsai (2007) was the first to investigate the relationship between globalization and health.
“[…] The more a country is involved in international organizations, the more likely its elites are to have absorbed some of the anticorruption norms, and the lower the level of corruption should be” (Sandholtz and Gray 2003, p. 767). However, developing countries face a challenge regarding corruption. Indeed, it seems that trade openness may amplify corruption and accentuate its misdeeds, as when firms are unable to cope with international competition, they might use corruption to preserve a part of the rent they enjoyed. Corruption then appears as the result of a lack of the adaptability of local companies to the requirements of a competitive environment.
The variable trade openness enters with a lag as any causal relationship between health and trade is not expected to be contemporaneous (Owen and Wu 2007).
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Jawadi, F., El Gouddi, S., Ftiti, Z. et al. Assessing the Effect of Trade Openness on Health in the MENA Region: a Panel Data Analysis. Open Econ Rev 29, 469–479 (2018). https://doi.org/10.1007/s11079-017-9450-3
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DOI: https://doi.org/10.1007/s11079-017-9450-3