Institutional Quality , Reforms and Integration in the Maghreb

Using panel data this paper examines the effects of institutions on the success of reforms and integration in the Maghreb. Institutional quality measures are developed using fuzzy-set based transformations of civil liberties and political rights. We posit that these transformations are quite appropriate given the nature of freedom indicators. We show that using fuzzy-set transformed measures provides useful insights regarding the quality of institutions in Algeria, Morocco and Tunisia. Furthermore, our empirical results suggest that institutions play a significant role in the success or failure of economic reforms. This conclusion is in clear contrast to views that propose a sequencing in which civil liberties and political rights should come after economic reforms are already in place and fully operational.