This volume contributes to the literature on the Arab World in two main ways. First, the regional focus on the role of institutions and macroeconomic policies fills an enormous research gap as this has been largely understudied, mainly due to the insufficiency of informational disclosure by governments in general and especially fiscal institutions. Hence, an important contribution of this volume is to reveal more detailed information concerning problems and policies of the region’s oil exporters. Second, given the constraints hindering macroeconomic reforms in Arab oil-exporting countries, it offers a novel political economy analysis that examines the ways in which resource endowments affect political regimes and the choice of macroeconomic institutions and policies in oil-rich Arab economies. The four main questions addressed in this volume are: (i) Do institutions (both political and economic) matter for macroeconomic policies in Arab oil exporters, and if so how? (ii) What are the main features of the macroeconomic institutions (fiscal, monetary, and exchange rate regimes) that are most effective in mitigating commodity price volatility, growth volatility, inefficiency in expenditure allocations, and corruption? (iii) How well are existing fiscal institutions performing in terms of fiscal policies and outcomes? (iv) When fiscal institutions are not performing well, what should be done about this?
The impact of commodity price volatility on fiscal balance and the role of real interest rate
