Using a sample of sixteen Middle East and North Africa (MENA) countries over the sample period 1995-2005, the paper analyzes determinants of institutional quality based on six separate indicators of governance: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption. The determinants under consideration include measures of economic freedom by the Cato Institute and the Heritage Foundation, indicators of policy quality, real per capita GDP, risk rating, and the degree of openness. Five measures of institutional quality increase real GDP growth significantly across MENA countries. In contrast, institutional quality has a negative impact on the growth of private credit and private investment. Further, the combined evidence does not suggest that improvement in institutional quality is a major factor in attracting FDI flows to MENA countries.