Institutions and development in the Middle East Countries

The main purpose of this study is to investigate the interaction between institutions and development in the Middle East countries. To testing the hypotheses the Middle East countries were divided into two groups of oil exporting and non-oil-exporting, then the research models as systematic and three-stage least squares have been used by the data during the period 1996 to 2014 for the two groups. Wald, Kruskal-Wallis and least significant difference tests were also utilized in appraising the interaction between institutions and development. The findings show that there is a significant difference between institutions and development interaction in the oil exporting and non-oil-exporting countries in the Middle East. In both groups, the estimated coefficient for the impact of development on institutions is more than the impact of institutions on development. Therefore, pay attention to development, automatically, in addition to improving its indices, upgrades the institutions conditions and improves the indices performance. This impact is exist by institution, also, but the variation speed is more by development.