nep-ara New Economics Papers
on Arab World
Issue of 2009‒03‒22
seven papers chosen by
Quentin Wodon
World Bank

  1. Economic Freedom and Foreign Direct Investment:How Different are the MENA Countries DFrom the EU? By José Martins Caetano; António Bento Caleiro
  2. Firms'productive performance and the investment climate in developing economies : an application to MENA manufacturing By Kinda, Tidiane; Plane, Patrick; Veganzones-Varoudakis, Marie-Ange
  3. Assessing Barriers to Trade in Services in the Mena Region By Mohamed Ali Marouani; Laura Munro
  4. Qualidade de Vida, escala local, Avaliação Económica, Bem Estar By José Manuel Belbute; João Marques; Jorge Carvalho; Eduardo Anselmo Castro; Maria Luis Pinto; Pedro Gomes
  5. More Jobs for University Graduates: Some Policy Options for Tunisia By Mohamed Ali Marouani
  6. Guns and Books: Legitimacy, Revolt and Technological Change in the Ottoman Empire By Metin M. Cosgel; Thomas J. Miceli; Jared Rubin
  7. The Effects of the War in Iraq on Nutrition and Health: An Analysis Using Anthropometric Outcomes of Children By Guerrero Serdan, Gabriela

  1. By: José Martins Caetano (Department of Economics, University of Évora); António Bento Caleiro (Department of Economics, University of Évora)
    Abstract: The risk perceived by investors is crucial in the decision to invest, in particular when it concerns a foreign country. The investment risk associated is a multi-faceted element given that it reflects many aspects that are relevant to (foreign) investors, such as the level of transparency, corruption, rule of law, governance, etc. In this paper we consider the level of economic freedom, as provided by the “Heritage Foundation”, for the most recent years, in order to analyse how is this measure of risk related to the inward foreign direct investment performance index, as provided by the UNCTAD. Given the subjectivity of risk an appropriate methodology consists on using fuzzy logic clustering, which is applied in the paper in order to verify how different the MENA region is from the set of EU-member states. The results show that economic freedom and inward FDI are positively associated, in particular in the cluster of countries that present a higher economic freedom. Of particular interest is the result that some MENA countries belong to the same cluster of most of the EU-countries.
    Keywords: Economic Freedom, European Union (EU) countries, Foreign Direct Investment, Fuzzy Clustering, Institutions, Middle East North Africa (MENA) countries.
    JEL: C49 E22 F21
    Date: 2009
  2. By: Kinda, Tidiane; Plane, Patrick; Veganzones-Varoudakis, Marie-Ange
    Abstract: Drawing on the World Bank Investment Climate Assessment surveys, this paper investigates the relationship between firm-level technical efficiency and the investment climate for 22 developing economies and eight manufacturing industries. The authors first propose three measures of firms'productive performance: labor productivity, total factor productivity, and technical efficiency. They show that, on average, enterprises in the Middle East and North Africa have performed poorly compared with other countries in the sample. The exception is Morocco, whose various measures of firm-level productivity rank close to the ones of the most productive economies. The analysis also reveals that the competitiveness of countries in the region has been handicapped by high unit labor cost, compared with main competitors like China and India. The empirical results show then? that the investment climate matters for firms'productive performance. This is true (depending on the industry) for the quality of various infrastructure, the experience and education level of the labor force, the cost of and access to financing, as well as different dimensions of the government-business relation. The analysis reveals that some industries, more exposed to international competition, are more sensitive to investment climate deficiencies. For some industries, this is also true for small and medium domestic enterprises that do not have the possibility to influence their investment climate or choose their location. These findings bear clear policy implications by showing that increasing firms'size and improving the investment climate (in particular of small and medium firms and industries more exposed to international competition) could constitute a powerful means of industrial development and competitiveness, in the Middle East and North Africa region in particular.
    Keywords: Economic Theory&Research,Political Economy,Labor Policies,,Investment and Investment Climate
    Date: 2009–03–01
  3. By: Mohamed Ali Marouani; Laura Munro
    Abstract: This paper aims to assess barriers to service provision in the financial, telecom, and transport sectors of selected MENA countries, including both trade and domestic restrictions. The analysis is focused on computation of aggregate and modal trade restrictiveness indexes (TRIs) by sector, drawing on information gathered from detailed questionnaires and country reports prepared by local consultants. The conclusions highlight that significant regulatory reforms have taken place in the service sectors of Egypt, Jordan, Lebanon and Morocco over the last decade, but that a broad range of restrictions still remain. The most significant change in these service sectors has been the lifting or softening of the constraints imposed on foreign equity participation. Reforms, however, have had varying degrees of impact on market structure depending on the country and the sector.
    Keywords: trade, services, MENA region
    Date: 2009–02–09
  4. By: José Manuel Belbute (Department of Economics, University of Évora); João Marques (Univeridade de Aveiro, Secção Autónoma das Ciênfias Sociais, Jurídicas e Políticas); Jorge Carvalho (Univeridade de Aveiro, Secção Autónoma das Ciênfias Sociais, Jurídicas e Políticas); Eduardo Anselmo Castro (Univeridade de Aveiro, Secção Autónoma das Ciênfias Sociais, Jurídicas e Políticas); Maria Luis Pinto (Univeridade de Aveiro, Secção Autónoma das Ciênfias Sociais, Jurídicas e Políticas); Pedro Gomes (Univeridade de Aveiro, Secção Autónoma das Ciênfias Sociais, Jurídicas e Políticas)
    Abstract: O tema deste artigo enquadra-se no âmbito do projecto “Custos e Benefícios, à escala local, de uma Ocupação Dispersa”. Esta investigação assenta a sua problemática na dispersão e procura chegar a conclusões e recomendações sobre o fenómeno do alastramento da dispersão; e sobre cenários desejáveis de evolução da ocupação dispersa existente, no que respeita à infra-estrutura e/ou à mobilidade e/ou à carga construtiva. Assim, o objectivo do projecto, essencialmente operativo, é o de confrontar os custos e os benefícios (Qualidade de Vida) para uma diversidade de contextos territoriais, as cidades alargadas de Aveiro/Ílhavo e Évora e respectiva subdivisão em Unidades Territoriais de Base UTBs. Para atingir este objectivo, o percurso metodológico desta investigação integra, para além de outros objectivos específicos, a formulação do conceito de Qualidade de Vida e a sua tradução em algoritmo, que aqui desenvolvemos.
    Keywords: Economic Freedom, European Union (EU) countries, Foreign Direct Investment, Fuzzy Clustering, Institutions, Middle East North Africa (MENA) countries.
    JEL: I31 R00 R12 R13
    Date: 2009
  5. By: Mohamed Ali Marouani (Université Paris1-Sorbonne/IEDES, DIAL et ERF)
    Abstract: (english) The combination of demographic factors and an increase in education has caused a significant rise of university graduates’ unemployment in the MENA region. The article provides a prospective costeffectiveness analysis of the impact of alternative labor market policies using a dynamic general equilibrium model. The model allows for an endogenous determination of unemployment through a multisectoral efficiency wage setting mechanism. The main finding is that a wage subsidy targeted at highly skilled intensive sectors is more effective than tax reductions or investment subsidies. However, wage subsidies are not enough to reduce significantly unemployment. Other policy options need to be considered. _________________________________ (français) La combinaison de facteurs démographiques et de progrès dans l’éducation a entraîné une hausse significative du chômage des diplômés dans la région MENA. L’article fournit une analyse de type coût-efficacité de politiques alternatives d’mploi à l’aide d’un modèle d’équilibre général dynamique. Le modèle permet une détermination endogène du niveau de chômage à l’aide d’un modèle multisectoriel de salaires d’efficience. Le principal résultat est qu’une subvention salariale ciblée sur les secteurs intensifs en main-d’oeuvre qualifiée est plus efficace que des réductions d’impôts ou des subventions à l’investissement. Cependant ces subventions salariales ne sont pas suffisantes pour réduire significativement le niveau du chômage. D’autres options doivent être considérées.
    Keywords: Employment policies, skilled workers, unemployment, dynamic general equilibrium models, Middle East and North Africa, Tunisia,politiques de l’emploi, main-d’oeuvre qualifiée, chômage, modèle d’équilibre general dynamiques, Afrique du Nord et Moyen Orient, Tunisie.
    JEL: C68 J24 J68
    Date: 2009–02
  6. By: Metin M. Cosgel (University of Connecticut); Thomas J. Miceli (University of Connecticut); Jared Rubin (California State University, Fullerton)
    Abstract: New technologies have not always been greeted with great enthusiasm. Although the Ottomans were quick to adopt advancements in military technology, they waited for almost three hundred years to allow the first book to be printed in Arabic script. We explain differential reaction to technology through a political economy approach centered on the legitimizing relationship between the rulers and their agents (e.g., military or religious authorities). The Ottomans readily accepted new military technologies such as gunpowder and firearms because they increased the net revenue available to the ruler and reduced the expected value of revolting against him. But they objected to the printing press because it would have decreased the ruler's net revenue by undermining the legitimacy provided by religious authorities, and it would have raised the probability and expected value of a revolution. The printing press was allowed in the eighteenth century after alternative sources of legitimacy emerged.
    Keywords: technology, state, military, printing, religion, legitimacy, revolt, Ottoman Empire
    JEL: H2 N45 N75 O3 O53 P48 Z12
    Date: 2009–03
  7. By: Guerrero Serdan, Gabriela
    Abstract: The war in Iraq initiated in March 2003 triggered a wave of violence and turmoil in the country, exposing households to insecurity and to instability in daily life. The level of violence has varied across provinces, the south and centre areas being the most affected. Using the different intensities of the conflict across areas and the age at exposure to the war among cohorts, I analyze a possible causal effect of the war on nutritional outcomes of children. I use two empirical strategies, leading to very similar results. Estimates indicate that children born in areas affected by high levels of violence are 0.8 cm shorter than children born in low violence provinces. These results are robust to several specifications. Furthermore, the paper also addresses the channels through which the conflict has affected health and nutrition. The results have not only short-term policy implications, but also, given the empirical evidence of the impact of early child malnutrition on later education, labour and productivity outcomes, the results are of great importance for the future.
    Keywords: health; nutrition; shocks; war; children; Iraq
    JEL: I12 O15 I00 J0
    Date: 2009–02

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