The role of external partners in regional cooperation projects in the Middle East

Raphael Bar-El, Miki Malul


This article analyzes the extent to which external partners contribute to the internalization of externalities arising from regional cooperation in the Middle East, that is, the degree to which they help increase welfare gains generated by the projects. This is classified by extent, intensity, and sectors of cooperation. Externalities are defined macroeconomically and sociopolitically. The results show that the international community does play a role in the internalization of externalities. In some cases this role is played by the countries themselves; in others, the participation of external partners can be explained by pure economic and business considerations (for projects that are profitable for the private external investor).

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