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The Middle East and North Africa (MENA) region has performed the best among all regions in improving education attainment over the past four decades (1970–2010). Using econometric analysis, we show that this was due in large part to a convergence process in which countries that had low levels of education in 1970 increased their stocks much faster than those with higher initial education. Since MENA had the second lowest education stock among all regions in 1970, it benefited substantially from convergence over the next four decades. We also show that MENA obtained a comparative edge from having had the highest rate of public spending on education among all developing country regions. Such spending, however, was of middling efficiency and did little to produce education of good quality.

A decomposition of output growth rates of Middle Eastern and North African countries shows that the contributions of human capital-augmented labor and physical capital to output growth are comparably small and stable over time and that in most countries a considerable share of output growth is attributed to growth in total factor productivity. This paper empirically assesses the determinants of total factor productivity in the Middle East and North Africa region between 1980 and 2009. The findings suggest that human capital is not only an input factor of production but also a quantity that changes the efficiency by which existing input factors are used. Domestic innovations appear to be efficient only if a certain level of educational attainment is reached by a country. In addition, human capital contributes to the ability of efficient adoption of technology from abroad and allows a faster catch-up with technological leaders. Globalization, in combination with a (comparably low) threshold endowment of human capital, is estimated to increase total factor productivity in Middle Eastern and North African countries.

Bank exposure to systemic shocks induced the Basel Committee on Banking Supervision to introduce a countercyclical capital buffers’ requirement in its new regulatory framework (Basel III). But is this macro-prudential tool useful for Middle East and North African countries (MENA) countries’ banking systems? Should it be implemented in a homogenous way for all banks in these countries? Trying to give plausible answers to these questions weakly debated in the literature for the case of MENA banking systems, this study uses an enough representative sample of commercial banks based in 15 MENA countries. Estimating a partial adjustment framework using system generalized method of moments (GMM) with Windmeijer’s correction, we show that large banks and banks with high market power are more inclined to behave in a countercyclical way than small banks and banks with low market power. These results are robust to several sensitivity checks. Accordingly, we think that the implementation of countercyclical capital buffers in the MENA region should take into consideration bank-specific characteristics like size and market power.

An analysis of the determinants of Algerian industrial employment growth in a framework that includes a spatial dependency effect reveals that there is no convergence process between the Algerian regions. Nonetheless, a convergence club gathering three wilayates appears when spatial heterogeneity of industrial employment growth is considered. Furthermore, our paper demonstrates that the hydrocarbon and the construction and public works sectors did not have externality effects on local industrial employment growth. Accordingly, Algerian public plans had some impact on unemployment, but mainly on informal unemployment through the support of the construction and public work sector.