This paper explores the causality between financial development and economic growth in the MENA region for different periods ranging from 1960 to 2002. The empirical evidence presented in the paper, either with cointegration techniques or granger causality tests provides support, rather, to the hypothesis that causality is running from the real to the financial sector. Moreover, there is a little support to the view that finance is a leading sector in the determination of long run growth in the

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... countries of the region. Our findings mat be attributed to (i) The strict control of the financial sector in these countries during long periods. (ii) The lateness in the implementation of financial reforms in these countries. (iii) The persisting issues in reform implementation (non-performing loans especially). (iv) The still high information and transaction costs, which prevent resources promotion and financial deepening.