Publication: Exploring Lebanon's Growth Prospects
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2007-08
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2012-06-06
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Abstract
This paper attempts to identify Lebanon's greatest constraints to economic growth, following a growth diagnosis approach. It concludes that fiscal imbalances and barriers to entry are most binding on long-term growth. Macroeconomic imbalances and related perceived risks affect the nature of investment decisions in Lebanon, in favor of liquid instruments rather than longer-term productive investments. Further, many barriers to entry discourage agents from investing in a number of markets: legal impediments to competition, corruption, and a set of fiscal incentives favoring the allocation of resources to non-tradable sectors, where potential demand and investment opportunities are scarcer. In turn, using a steady-state computable general equilibrium model, the paper assesses the long-term growth impact of a selected set of policy reforms envisaged to lift such constraints. Results suggest that 1 to 2 percentage points of additional GDP growth per year could be gained through public expenditure reform, greater domestic competition, and tax harmonization.
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“Berthélemy, Jean-Claude; Dessus, Sébastien; Nahas, Charbel. 2007. Exploring Lebanon's Growth Prospects. Policy Research Working Paper; No. 4332. © World Bank. http://hdl.handle.net/10986/7316 License: CC BY 3.0 IGO.”
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