This paper concentrates on the relationship between trade openness, financial openness and gover nment si ze concer ni ng t he Mi ddl e East and Nort h Afri can countri es ( MENA). Compensati on hypothesis explains that trade-openness is positively interconnected with the government size. Also, fi nanci al openness has negati ve r el ati ons hi p wit h t he gover n ment si ze. Usi ng panel dat a f or MENA countries during 2000-2007, we have found evidence of a positive relationship between trade-openness and government size and also a negative relationship between financial openness and the size of gover nment.
