Economic Gains from Integration among Developing Countries: The Case of the North Africa Arab Maghreb Union (AMU)

The Production Impact of Economic Integration: A Comparison between the EU and the AMU

“…The analysis suggests that, while the existence of output expansion effects can be demonstrated in both integration schemes, the impact as judged from Algeria's perspective is much less significant. This is consistent with the findings of an earlier study (Testas, 1997) which showed that the trade expansion effects of the AMU are likely to be quite modest. The model predicts that, while membership of the EU would increase the UK's production by more than 13%, the AMU would increase Algeria's production by only 0.4%.…”

“…First, it cannot be argued that the establishment of the AMU is detrimental or unjustifiable from Algeria's point of view simply because the output composition effects have turned out to be small or insignificant. As argued in Testas (1997), the case for North African economic integration would still rest on a number of arguments: it can be viewed as a model for achieving economies of scale, for taking advantage of location and specialisation, for enhancing efficiency in industry and for achieving diversification of exports to the world market. These remain a topic for future research, however.…”

“…These have more often restricted themselves to a political discussion of the general principles that should guide the planning of integration in the North African region rather than investigating empirically the problems such integration may give rise to: in particular, the effects on trade and output. Testas (1997) has investigated the impact of the AMU on trade -judged from the perspective of Algeria. The present study should, therefore, be seen as complementary to it, by providing empirical estimates on output -also judged from the perspective of that country.…”

Towards an alternative industrial and trade profile for Algeria: the challenge of the developmental state model

“…In 1988, the Bendjedid regime adopted a new constitution which removed the word socialism from discourse, and promised freedom of expression, association, and assembly. In 1989, the government was successful in boosting the economy temporarily, as shown by a 4% real GDP growth rate, and at the same time promoted the creation of the Arab Maghreb Union to encourage free trade between Algeria, Libya, Mauritania, Morocco, and Tunisia (Testas 2001).…”

The European Union’s ‘Global Approach’ to the Mediterranean Area: A Quantitative Estimate of the Efficiency Effects

“…where M i is imports of the good concerned from i, i = 1,..., n; M is total imports of the good where M = *M i ; P i , i = 1,..., n, are import prices, P m is an index of import prices; P d is an index of domestic prices; and u v , v = 1, 2, are vectors of other variables. Equation (1), as shown by Leamer and Stern (1970) and pointed out by Testas (1996Testas ( , 1997, draws on the theory of demand where the quantity demanded for the good concerned is expressed as a function of its price and the prices of all other goods, in addition to income. However, as Winters (1984bWinters ( , 1985 has demonstrated, the necessary and sufficient condition for equation (2) to represent the allocation of imports adequately is that the process underlying the allocation be weakly separable between home and imported goods.…”