Sovereign debt sustainability in MENA countries: Determinants and policy implications

Kais Ben Mbarek (1)
(1) University of Jendouba, Tunisia

Abstract

This paper examines sovereign debt sustainability in the Middle East and North Africa (MENA) region by comprehensively analyzing macroeconomic, institutional, and geopolitical determinants. Using a panel dataset of 15 MENA countries spanning 2000-2023, we employ dynamic panel estimation techniques to identify key factors affecting debt sustainability. Our findings reveal significant heterogeneity across the region, with oil-exporting countries demonstrating distinct debt dynamics compared to oil-importing nations. Institutional quality and governance indicators emerge as critical predictors of debt sustainability beyond traditional macroeconomic variables. Furthermore, our threshold analysis identifies specific debt-to-GDP levels at which growth effects become negative, varying substantially across country groups. The results underscore the importance of tailored policy approaches to regional debt management, challenging one-size-fits-all recommendations from international financial institutions. This research contributes to the literature by developing a novel composite debt sustainability index and providing empirical evidence on the region-specific determinants of sustainable sovereign debt management.

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Authors

Kais Ben Mbarek
kais.benmbarek@fsjegj.rnu.tn (Primary Contact)
Author Biography

Kais Ben Mbarek, University of Jendouba

Kais Ben Mbarek is an Associate Professor at the Faculty of Law, Economics and Management of Jendouba, University of Jendouba, Tunisia. He holds a Ph.D. in Finance with honorable mention from the University of Tunis El Manar, Faculty of Economic Sciences and Management of Tunis. His research specializes in fiscal policy, public finance, and development economics with a focus on the MENA region. His work examines the intersection of sovereign debt sustainability, institutional quality, and economic development in emerging economies, with particular attention to the challenges faced by resource-dependent countries.

Ben Mbarek, K. (2025). Sovereign debt sustainability in MENA countries: Determinants and policy implications. Modern Finance, 3(2), 75–95. https://doi.org/10.61351/mf.v3i2.274

Article Details

Institutional quality and Islamic financial development

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