Working Papers
Sanctions, Wars and MENA Trade
No.
1475
Publisher
ERF
Date
August, 2021
Topic
F6. Economic Impacts of Globalization
F5. International Relations, National Security, and International Political Economy
F1. Trade
The paper investigates to what extent the intra-MENA political tensions adversely affect intraregional trade (IRT). While traditional economic and political science literature focus on trade and wars, the paper considers other expressions of political tensions. In addition to inter-state wars, countries impose sanctions on financial collaboration, military collaboration, travel freedom, commercial relationships and diplomatic arrangements. The sanctions can be combined and simultaneous is order to achieve the highest impact. The analysis applies the gravity approach and the Pseudo-Poisson Maximum Likelihood estimator (PPML) to bilateral trade between the 18 MENA countries and 128 of their partners over the period 1971-2014. The results are that only commercial sanctions and inter-state wars are significant. They are negative meaning that they harm IRT.
Research Fellows
Khalid Sekkat
Full Professor of Economics, University of Brussels