Management Governance Analysis in the Arab World: MANOVA Approach

Abstract

This paper studies 17 Arab States, human development index (HDI), and 11 time series which represent the basic indicators of governance. These variables are freedom of trade, freedom of property, freedom of economy, freedom of finance, freedom of corruption, freedom of fiscal, freedom of money, freedom of enterprise, freedom of investment, freedom of work, and freedom of government spending. A multivariate variance analysis (MANOVA) was used to test whether a differential effect exists between the Arab countries, by first focusing on the types of regimes (monarchical or republican), and second on the group of Arab countries belonging to the GCC and the rest of Arab states. Our statistical results indicate a differential effect by the type of political system on the following governance variables: corruption, freedom of trade, freedom of economy and freedom of property. Statistically speaking, in republican regimes, low values associated with the degree of freedom of corruption show that corruption is high and that it severely limits the freedom of individuals. Similarly, freedom of trade and freedom of economy in these regimes have more legislative or regulatory limitations, and little economic freedom compared to monarchies. Finally, concerning the degree of freedom of property, there are more expropriations and a higher level of corruption in the process of buying and selling goods. The inspection of the MANOVA results clearly indicates that the GCC countries are distinguished from other Arab countries based on six governance variables and the HDI indicator. Indeed, in the Arab countries of the GCC, we identify weaker corruption levels, a freedom of trade with less legislative or regulatory limits, a greater economic freedom, a fiscal freedom close to 100 (this means that the burden of paying taxes is lower and consequently individuals and companies have little tax liability), a fluctuated controlled monetary freedom, the human development index (HDI) is significantly higher, and finally a freedom of property with less expropriations and a lower level of corruption in the sale or purchase of goods. The high values of the HDI indicator in the GCC countries are partly explained by the indicator of gross domestic product per capita (IGDP) which is very high in those countries.