Berthélemy, Jean-ClaudeDessus, SébastienNahas, Charbel2012-06-062012-06-062007-08https://hdl.handle.net/10986/7316This 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.CC BY 3.0 IGOAGGREGATE DEMANDAGRICULTUREBANKING REGULATIONSBANKING SECTORBANKRUPTCIESBARRIERS TO ENTRYBASIS POINTSBENCHMARKBINDING CONSTRAINTBONDSBORROWING COSTSBORROWING REQUIREMENTSBUSINESS CYCLEBUSINESS CYCLESCAPITAL ACCOUNTCAPITAL FLOWSCAPITAL INFLOWSCAPITAL MARKETSCAPITAL MARKETS DEVELOPMENTCAPITAL MOBILITYCAPITAL MOVEMENTSCAPITAL OUTFLOWSCAPITAL STOCKCAPITAL STOCKSCENTRAL BANKCHECKSCOMMERCIAL BANKSCOMMERCIAL LAWSCOMPETITIVENESSCONSUMER PRICE INDEXCONSUMERSCONTRACT ENFORCEMENTCOUNTRY RISKCREDIT LINECURRENT ACCOUNT DEFICITDAMAGESDEBTDEBT LEVELSDEBT OVERHANGDEBT PAYMENTSDEBT RESTRUCTURINGDEBT SERVICEDEBT STOCKDEBTORSDECISION MAKINGDECISION TREEDEMAND FOR CREDITDEPOSITORSDEPOSITSDEPRECIATION OF ASSETSDEVALUATIONDEVELOPMENT ECONOMICSDISPOSABLE INCOMEDOMESTIC MARKETDOMESTIC MARKETSDYNAMIC ANALYSISECONOMETRIC ANALYSISECONOMIC ACTIVITYECONOMIC CONSTRAINTSECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC FLUCTUATIONSECONOMIC HISTORYECONOMIC RISKSECONOMIC SITUATIONECONOMIES OF SCALEELASTICITYELASTICITY OF SUBSTITUTIONEMERGING ECONOMIESENFORCEMENT OF CONTRACTSEQUILIBRIUMEQUIPMENTSEUROBONDEXCISE TAXESEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORT PERFORMANCEEXPORTSEXPROPRIATIONEXTERNALITIESFINANCIAL CRISISFINANCIAL DEVELOPMENTSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SUPPORTFINANCIAL SYSTEMFISCAL POLICIESFISCAL POLICYFIXED CAPITALFIXED COSTSFIXED INVESTMENTFORECASTSFOREIGN CAPITALFOREIGN COMPETITIONFOREIGN CURRENCIESFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTSFOREIGN FUNDSGDPGDP PER CAPITAGENERAL EQUILIBRIUM ANALYSISGNPGOVERNMENT BORROWINGGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROSS FIXED CAPITAL FORMATIONGROWTH POTENTIALGROWTH RATEHUMAN CAPITALIMPERFECT COMPETITIONIMPLICIT SUBSIDYINCOME LEVELSINDEBTEDNESSINFLATIONINFRASTRUCTURE INVESTMENTSINTELLECTUAL PROPERTYINTEREST RATESINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL MARKETSINTERNATIONAL FINANCEINTERNATIONAL STANDARDSINVENTORYINVESTINGINVESTMENT BANKINGINVESTMENT BEHAVIORSINVESTMENT CLIMATEINVESTMENT DECISIONSINVESTMENT FINANCEINVESTMENT OPPORTUNITIESINVESTMENT RATEJUDICIAL REFORMLABOR MARKETLABOR MARKETSLACK OF COMPETITIONLEGAL IMPEDIMENTSLIQUID INSTRUMENTSLIQUIDITYLOANLOCAL CURRENCYLOCAL FINANCELONG-TERM INVESTMENTSM3MACROECONOMIC CONDITIONSMACROECONOMIC POLICIESMACROECONOMIC RISKSMARGINAL COSTSMARKET FAILUREMARKET FAILURESMARKET MECHANISMSMARKET SHAREMARKET SHARESMATURITIESMATURITYMIDDLE INCOME COUNTRIESMONETARY FUNDMONETARY STABILITYMONEY SUPPLYMONOPOLIESNATIONAL INCOMEOIL PRICESOPPORTUNITY COSTOPTIMIZATIONOUTSTANDING CREDITOUTSTANDING CREDITSPENSIONPENSION REFORMSPER CAPITA INCOMEPOST-WAR RECONSTRUCTIONPRICE LEVELSPRICE SUBSIDIESPRIVATE CAPITALPRIVATE INVESTMENTPRIVATE INVESTMENTSPRIVATE INVESTORSPRIVATE PROPERTYPRODUCTION COSTSPRODUCTIVE INVESTMENTSPRODUCTIVITYPRODUCTIVITY GROWTHPROPERTY RIGHTSPROTECTION OF INVESTORSPUBLIC ASSETSPUBLIC DEBTPUBLIC DEBT MANAGEMENTPUBLIC FINANCEREAL ESTATE COLLATERALSREAL ESTATE INVESTMENTSREAL EXCHANGE RATEREAL EXCHANGE RATESREAL GDPREAL INTERESTREAL INTEREST RATESREMITTANCESRESERVESRETURNRETURNSRULE OF LAWSAVINGSSOFT LOANSSOVEREIGN RATINGSOVEREIGN RATINGSSOVEREIGN RISKSTRUCTURAL CHANGESUPPLY OF CREDITTAXTAXATIONTELECOMMUNICATIONSTOTAL FACTOR PRODUCTIVITYTRADE BALANCETRADE LIBERALIZATIONTRADINGTRADING COSTSTREASURYTREASURY BILLSUNDERESTIMATESUNEMPLOYMENTUNEMPLOYMENT RATEUTILITY FUNCTIONVALUE ADDEDWAGESWorld Bank10.1596/1813-9450-4332