ABSTRACT
The rise in global food prices has significantly exacerbated hunger and poverty, particularly in low
– and middle-income countries. While previous studies have explored various aspects of these
issues, a critical gap remains in understanding their combined impact within the distinctive
socio-economic and political landscape of Arab countries. Therefore, this study examines the
joint effects of food inflation, rural development, and institutional quality on poverty levels in
the Arab world from 2004 to 2021. Recognizing cross-sectional dependence and heterogeneity
among the panels, the study employs advanced panel cointegration methods. The findings
from panel-corrected standard errors (PCSE) and feasible generalized least squares (FGLS)
analyses consistently indicate that food price inflation exacerbates poverty rates, particularly in
low – and middle-income Arab countries, while its impact remains negligible in those with
high-incomes. The evidence further confirms that higher income inequality correlates with
increased poverty across all income groups. However, economic growth and institutional quality
play a crucial role in poverty reduction. Notably, rural development does not significantly
contribute to poverty alleviation in low – and middle-income Arab countries. Additionally, the
method of moments quantile regression (MMQR) analysis reinforces the robustness of these
findings. To mitigate poverty in the Arab world, the study proposes several policy
recommendations.