Oil rents and institutional quality: empirical evidence from Algeria

This paper examines the interaction between natural resource abundance and institutional quality in Algeria, using two measures of institutional quality (corruption and democratic accountability), and a measures for resource endowment (oil rents as a percentage of GDP). Our results indicate that an increase in oil rents significantly increase corruption in Algeria, while the interaction effect between oil rents and democratic accountability is positive and statistically significant, which means that enhancing democratic institutions can reduce corruption. It is also revealed that the manufactures exports significantly decline in the aftermath of oil rents shock, a pattern consistent with the Dutch Disease phenomenon. On the one hand, these findings confirms that Algeria’s institutional framework demonstrates a high degree of perceived weakness, and on the other hand, enhancing these institutional environment would reduce corruption, and increase the impact of resource abundance on economic development

Stabilization fund and fiscal policy : Evidence from Algeria

The aim of this paper is to examine if the presence of stabilization funds helps Algeria –as an oil rich economy- to stabilize their expenditures and address the pro-cyclical behaviour of fiscal policy, using Autoregressive Distributed Lag (ARDL) model for the period 1984-2016. Alike other oil countries, government spending in Algeria is considered to be strongly pro-cyclical .The results show that the establishment of stabilization fund in Algeria has not contributed to reduce the government spending pro-cyclicality. This is due to the absence of a rule that limits the withdrawals from the fund to finance budget deficit. Keywords: Stabilization Fund, pro-cyclicality, government expenditure,  Institutional Quality, ARDL bounds test approach, Algeria.   French Title: Les fonds de stabilisation et la politique budgetaire: Cas de l’Algerie L'objectif de cet article est d'examiner si la présence de fonds de stabilisation aide l'Algérie - en tant qu'économie riche en pétrole - à stabiliser ses dépenses et à reduire le comportement procyclique de la politique budgétaire. Un modèle autorégressif à retards échelonnés ARDL est utilisé durant la période 1984-2016.Les résultats montrent que la création d'un fond de stabilisation en Algérie n'a pas contribué à réduire la procyclicalité des dépenses publiques. Cela s'explique en partie par l'absence de règle limitant les retraits du fonds pour financer Le budget de l'État. Mots Clés : Fonds de stabilization, procyclicalité, modèle ARDL, L'environnement institutionnel, Algerie

Resource Abundance and Financial Development: Evidence from Algeria

This paper empirically investigates the impact of natural resource abundance on financial sector development in Algeria for the period 1984-2017 using the autoregressive distributed lag approach to cointegration analysis (ARDL). Financial development is measured by two indicators including domestic credit to the private sector and a financial development index (FD) constructed by the International Monetary Fund. The obtained results reveal a negative impact of natural resource abundance on financial development in Algeria. The effect of oil rent on both measures of financial sector development is negative and statistically significant, with stronger impact on private credit. Also, we find that the impact of institutional quality on financial development is positive and statistically significant, implying that improving the quality of institutions eventually promote financial development.  Thus, our main finding confirms evidence of a symptom of the oil curse in the financial sector in Algeria. To promote the development of the financial sector in Algeria, our empirical findings have important policy implications that highlight the need to improve the quality of domestic institutions to ensure the effective management of natural resources, and reduce the adverse effect on the finance growth nexus

Examining the driving factors of CO2 emissions using the STIRPAT model: the case of Algeria

In order to curb carbon emissions and develop a low carbon development plan in Algeria, it is crucial to shed light on influencing factors of carbon emissions. In view of this, a stochastic impact by regression on population, affluence, and technology model is conducted to identify the determinant factors driving CO2 emissions in Algeria during the period 1971–2016. The method of partial least squares regression is applied to eliminate multicollinearity problems. The results indicate that the population has a positive and significant effect on CO2 emission. The energy use is found to be the second most contributing factor to CO2 emissions followed by urbanisation and affluence (GDP per capita)