Professor Sumru Altug, Chair of the AUB Economics Department, explores whether geographical proximity can stimulate economic growth and diversification in nearby countries in the Middle East and North Africa. Her analysis of the impact of trade, physical proximity, and institutions suggests that the spillover effect is limited, other than workers’ remittances. This probably reflects the distorting dominance of oil and gas in MENA economies, and the political capture of states by their elites.