nep-ara New Economics Papers
on Arab World
Issue of 2011‒01‒23
six papers chosen by
Quentin Wodon
World Bank

  1. Power market reforms and privatization of the electricity industry in the Iranian energy sector; an uphill struggle? By Nasrollahi Shahri, Nima
  2. ClubMed? Cyclical fluctuations in the Mediterranean basin By Fabio Canova
  3. Does credit for equity investments feedback on stock market volatility? Evidence from an emerging stock market By Onour, Ibrahim
  4. Oil Rents, Corruption, and State Stability: Evidence from Panel Data Regressions By Rabah Arezki; Markus Brückner
  5. Stakeholding as a new development strategy for Saudi Arabia By Corneo, Giacomo
  6. Polarization, growth and social policy. The case of Israel, 1997 to 2008 By Rosa García-Fernández; Daniel Gottlieb; Federico Palacios-González

  1. By: Nasrollahi Shahri, Nima
    Abstract: Following the successful experience of some developed counties in Power market restructuring and reforms, many developing countries have followed suit. Iran has for the last thirty years, since its Islamic revolution of 1979, had an economy dominated by the state, but has been pushed to take some legal steps towards private participation in the electricity sector so as to meet the rapidly rising electricity demand. This paper aims to appraise the stressfulness of Power market restructuring and privatization of electricity industry in Iran. A few years from the commencement of the reforms, the program can be assessed as realistically successful. However, there are plentiful challenges which need to be addressed through legislation. In this study, challenges to competition and Pitfalls of the reforms in the Iranian restructured electricity market will be reviewed. as well as this, a number of recommendations will be offered.
    Keywords: Power market restructuring; privatization;Islamic Republic of Iran
    JEL: N70 O13 Q4
    Date: 2011–01–07
  2. By: Fabio Canova
    Abstract: We investigate the similarities of macroeconomic fluctuations in the Mediterranean basin and their convergence. A model with three geo-political indicators, covering the West, the East and the MENA portions of the Mediterranean, characterizes well the historical experience since the early 1980. Convergence and divergence coexist in the region and are reversible. Except for the West, domestic cyclical fluctuations are still due to national and idiosyncratic causes. The outlook for the next few years looks rosier for the MENA and the East blocks than for the West.
    Keywords: Bayesian Methods; Business cycles; Mediterranean basin; Developing and developed countries.
    JEL: C11 C33 E32
    Date: 2011–01
  3. By: Onour, Ibrahim
    Abstract: This paper investigates the causal relationships between volatility in Saudi stock market and banks credit for equity investments. Our finding indicate there is a bi-directional feedback effects between the stock price volatility and banks credit loans. In other words, volatility in private credit for equity investments influence volatility in stock price and vice versa. A policy implication of such result is that regulating private credit loans in banking sector could reduce the upnormal swings in Saudi Stock prices.
    Keywords: Saudi stock market; Volatility; speculation; banks' credit
    JEL: C10 C50
    Date: 2011–01–02
  4. By: Rabah Arezki (International Monetary Fund (IMF)); Markus Brückner (School of Economics, University of Adelaide)
    Abstract: We examine the effects of oil rents on corruption and state stability exploiting the exogenous within-country variation of a new measure of oil rents for a panel of 30 oil-exporting countries during the period 1992 to 2005. We find that an increase in oil rents significantly increases corruption, significantly deteriorates political rights while at the same time leading to a significant improvement in civil liberties. We argue that these findings can be explained by the political elite having an incentive to extend civil liberties but reduce political rights in the presence of oil windfalls to evade redistribution and conflict. We support our argument documenting that there is a significant effect of oil rents on corruption in countries with a high share of state participation in oil production while no such link exists in countries where state participation in oil production is low.
    Keywords: oil rents; corruption; state stability; state participation
    JEL: C33 D73 D74 D72 H21
    Date: 2011–01
  5. By: Corneo, Giacomo
    Abstract: The transition from an oil-based to a knowledge-based economy requires that the Saudi population dramatically increases its level of human capital. This paper argues that noncognitive skills may be a bottleneck in the formation of human capital and proposes a policy to indirectly strengthen those skills. The core of the proposal is a government-financed gift to each Saudi citizen reaching adult age, the SSGY. --
    Keywords: Saudi Arabia,Stakeholder Society,Value Systems,Economic Development
    JEL: O0 Z1
    Date: 2010
  6. By: Rosa García-Fernández (University of Granada); Daniel Gottlieb (National Insurance Institute and Ben-Gurion University, Israel); Federico Palacios-González (University of Granada)
    Abstract: In this paper we apply the methodology developed by García-Fernández and Palacios-González (2008,2009) based on multiresolution analysis, to the measurement of polarization to Israeli income data over the past decade. This methodology allows us, in contrast to other polarization measures, to detect sub-populations empirically as incomes concentrated around an optimal number of micropoles. Based on this procedure a polarization measure is developed, consisting of three components: an indicator of alienation and identification; the number of income classes and the distribution of the sizes of the groups. The proposed approach allows us to study polarization beyond mere income class membership, by including ethnic-cultural, individual, family and other demographic characteristics by means of a Probit analysis. The identification-alienation index fluctuated around two sub-periods - the first, showing an increase in identification-alienation from 2001 to 2004, coinciding with the harsh socio-economic policy during that period, and the second, showing a sharp decline, during the period of rapid economic growth (2005 to 2008). The increase in the size of the middle class - reducing polarization - and the decreasing number of classes - raising it - had offsetting effects on the overall index which has been relatively stable over the observation period. The Probit analysis reveals that belonging to the Haredi (Jewish Ultra-orthodox) community sharply raises their probability of belonging to the low income group. Being Arab yields a similar though less pronounced result. Furthermore, group-related characteristics of labor-force participation and small family size increase the chances of belonging to a higher income group.
    Keywords: Polarization, poverty, multiresolution analysis.
    JEL: H54 I21 I3 J1 O15 O53
    Date: 2011

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