DETERMINANTS OF INEQUALITY AND THE ROLE OF EQUITY IN THE COUNTRIES OF THE MIDDLE EAST AND NORTH AFRICA

The paper explores the main sources of poverty reduction, and evaluates the situation of MENA countries with respect to the theoretical literature on the link between growth, inequality and equity. We first test two relations: Kuznets' hypothesis, and the pro-poor growth theory. We next investigate the determinants of inequality by using a panel data set for the period 1980-2003. These countries have not yet reached the turning point. Consequently, inequality reduction policies including the poor in the economic growth process are needed. Our results suggest that education efficiency, gender inequality reduction, and banking credit access in a market efficiency environment, are the main challenges in the future.