Causality Analysis between Pillars of Sustainable Development in Middle East and North Africa (MENA)

The region of Middle East and North Africa (MENA) is of great interest due toits energy reservoirs and special geopolitical conditions. The challenge ofsustainable development in MENA has been debated amongst internationalorganizations and researchers. The current paper tries to find the causalityinteractions among sustainability pillars, i.e. institutional, environmental, economicand social sustainability. For this purpose, data for 29 variables related toinstitutional, environmental, economic and social spheres for the 2000 - 2007 periodwere gathered and combined using Principal Component Analysis (PCA). Finally, adynamic panel data model was constructed to test the causality between pillars. Theresults reveal the fact that economic development of MENA, which has relied uponenvironmental depletion, not only could not develop social and institutionaldimensions, but caused their deterioration.