Table X2. Determinants of Forecast Errors

Table X2. Determinants of Forecast Errors

Y = Forecast Errors (Forecast Growth minus Realized Growth)

WB-GEP (2010–20) Base Model

IMF-WEO (2010–20) Consensus/ Focus Economics (2015–20) With MENA Dummy & Interaction with SCI

WB-GEP (2010–20) IMF-WEO (2010–20) Consensus/ Focus Economics (2015–20) With Growth Volatility

WB-GEP (2010–20) IMF-WEO (2010–20) Consensus/ Focus Economics (2015–20)

Log of SCI (lagged)

MENA region dummy variable

(1) (2) (3) (4) (5) (6) (7) (8) (9) -3.310*** -3.410*** -2.672 -1.857*** -1.891*** 1.023 -2.425*** -2.529*** -2.486 (1.259) (1.181) (2.035) (0.680) (0.671) (0.860) (0.708) (0.698) (1.933) 49.219 50.095* 41.722*** (31.500) (25.459) (14.359)

MENA * log of SCI -11.414 -11.551* -9.582*** (7.380) (5.962) (3.291)

Growth Volatility (lagged) 0.357** 0.356** 0.216* (0.159) (0.139) (0.113)

Log of GDP per capita (lagged) Export Commodity Price Shocks Internal Conflicts Shocks dummy 0.346* 0.324 -0.362 0.137 0.097 -0.419 0.164 0.144 -0.431 (0.201) (0.201) (0.465) (0.130) (0.137) (0.350) (0.120) (0.125) (0.434) 5.412 2.734 -6.220 7.565* 4.980 -2.715 4.934 2.258 -5.597 (3.444) (4.481) (9.256) (3.928) (4.025) (9.453) (3.363) (4.982) (9.537) 0.320 0.229 0.347 -0.069 -0.194 -0.147 -0.035 -0.124 -0.030 (0.342) (0.364) (0.549) (0.241) (0.263) (0.470) (0.248) (0.263) (0.488)

Log of Total Population (lagged) -0.111** -0.113* -0.184 -0.151*** -0.159*** -0.133 -0.062 -0.065 -0.097 (0.050) (0.060) (0.120) (0.047) (0.059) (0.112) (0.059) (0.062) (0.105)

Boom Dummy = 1 if Above Median Growth (lagged)

Constant

-0.198 -0.526*** -0.671* -0.229 -0.551*** -0.570 -0.187 -0.515*** -0.578 (0.207) (0.194) (0.378) (0.211) (0.187) (0.359) (0.213) (0.191) (0.350) 14.230*** 15.810*** 18.889* 10.464*** 11.991*** 2.431 10.078*** 11.676*** 16.613* (3.912) (3.770) (10.188) (2.493) (2.597) (3.569) (2.433) (2.531) (8.707)

Number of observations 1,242 1,242 326 1,242 1,242 326 1,242 1,242 326

R2

0.381 0.359 0.485 0.412 0.393 0.522 0.426 0.403 0.492 Adjusted R2 0.373 0.351 0.467 0.403 0.384 0.502 0.418 0.395 0.473 Number of Countries 126 126 56 126 126 56 126 126 56

Source: Authors’ calculations based on the Consensus/Focus Economics, the International Monetary Fund’s World Economic Outlook and the World Bank’s Global Economic Prospects. Notes: Statistical significance level 0.01 - ***; 0.05 - **; 0.1 - *. Robust standard errors clustered at the country level. Regressions include year fixed effects. The reference year is 2015. Columns (1), (4) and (7) samples’ refer to World Bank GEP January Forecasts sample from 2010 to 2020, covering 126 countries. This common sample is used to define the Columns (2), (5) and (8) samples, for IMF WEO January Forecasts from 2010 to 2020. Columns (3), (6) and (9) samples refer to Consensus January Forecasts and Focus Economics January Forecasts for the MENA Region, from 2015 to 2020, covering 56 countries, and are not forced to be a common sample with WB-GEP and IMF-WEO. All regressions include year fixed effects. Log of SCI (lagged) is the lagged log of Statistical Capacity Indicator (WB), MENA Region dummy is a dummy equal to 1 when the country is a MENA country, MENA*Log Lagged SCI is the interaction between the MENA Region Dummy and the Lagged Log of SCI, Growth Volatility (Lagged) is the lagged rolling 10-year standard deviation of realized growth rates, Log of GDP per capita (lagged) is the lagged log of GDP per capita in constant 2010 US dollars, Absolute value of export commodity price shocks is a variable capturing both exposure to commodity exports and the fluctuations of the international prices, Internal Conflicts is a dummy variable for internal conflict country-year pairs—as defined using the UCDP-Prio Dataset, Log of Total Population (lagged) and Boom Dummy if Above Median Growth (lagged) is a lagged dummy variable for economic booms if growth is greater than or equal to previous 10-year median growth.