Digitalization and poverty alleviation in MENA countries: A dynamic panel analysis

Abstract

Over the last three decades, MENA countries have witnessed massive digital improvements. On the other hand, poverty rates in the region have risen since 2011 as a result of various factors such as wars, political instability, and climate change. Correspondingly, our study investigates the relationship between digitalization and poverty in MENA countries over the period from 1990 to 2019. Using the available data from ten MENA countries, the study applied the system GMM to assess the influence of two ICT tools: mobile phones and the Internet. The results indicate that the usage of mobile phones contributes to an increase in the poverty headcount ratio and an increase in the poverty gap in MENA countries. However, the use of the Internet seems to decrease the poverty headcount ratio and the poverty gap. The study urges governments to target the determinants of poverty in the region as a priority to apply suitable ICT tools.