nep-ara New Economics Papers
on Arab World
Issue of 2011‒10‒01
eleven papers chosen by
Quentin Wodon
World Bank

  1. Is There a Puzzle? Compliance with Minority Rights in Turkey (1999-2010) By Gözde Yilmaz
  2. "Estimating the Impact of the Recent Economic Crisis on Work Time in Turkey" By Emel Memis; S. A. Kaya Bahce
  3. Unpacking the Compliance Puzzle - The Case of Turkey‘s AKP under EU Conditionality By Beken Saatcioglu
  4. Thesis of religion: normative basis of Islamic economics By Shaikh, Salman Ahmed
  5. Political Endowments and Electricity Market Regulation in Turkey: An Institutional Analysis By S. Mustafa Durakoglu
  6. A critical analysis of Mudarabah & a new approach to equity financing in Islamic finance By Shaikh, Salman Ahmed
  7. Globalization Impact on Education in Egypt By Chiara Diana
  8. Sukuk: Definition, Structure and Accounting Issues By Ahmed, Khalil
  9. Equity of Health Care Financing: An Application to Iran By Moradi, Alireza
  10. Patterns of Power. The EU‘s External Steering Techniques at Work - The Case of Democratization Policies in Morocco By David Budde; Mathias Großklaus
  11. What Drives Corruption? Evidence from North African Firms By Clara Delavallade

  1. By: Gözde Yilmaz
    Abstract: The Helsinki Summit in 1999 represents a turning point for EU–Turkey relations. Turkey gained status as a formal candidate country for the EU providing a strong incentive to launch democratic reforms for the ultimate reward of membership. Since 2001, the country has launched a number of reforms in minority rights. Many controversial issues, such as denial of the existence of the Kurds, or the lack of property rights granted to non-Muslim minorities in the country, have made progress. Even though the reforms in minority rights may represent a tremendous step for the Europeanization process of Turkey, the compliance trend in minority rights is neither progressive nor smooth. While there is a consensus within the literature about the acceleration of reforms starting in 2002 and the slow down by 2005 in almost all policy areas, scholars are divided into two camps regarding the continuing slow down of the reform process or the revival of the reforms since 2008. I argue, in the present paper, that the compliance process with minority rights in Turkey is puzzling due to the differentiated outcome and the recent revival of behavioral compliance. I aim to shed light on the empirical facts in the least-likely area for reform in the enlargement process. Through a detailed analysis of minority-related reform process of Turkey being an instance of ongoing compliance, the paper contributes to the literature divided on the end result of Europeanization in the country recently.
    Keywords: Turkey; enlargement; minorities; Europeanization; Europeanization
    Date: 2011–01–05
  2. By: Emel Memis; S. A. Kaya Bahce
    Abstract: This paper provides estimates of the impact of the recent economic crisis on paid and unpaid work time in Turkey. The data used in this study come from the first and only time-use survey available at the national level. Infrequency of collection of time-use data in Turkey does not allow us to make a direct comparison of pre- versus postcrisis time-use patterns. We introduce a tractable way for estimating these possible effects by measuring the impact of an increase in unemployment risk on time-use patterns of women and men living in couple households. The method developed here can be applied to other developing-country cases where there is a lack of longitudinal data availability. Our findings support the argument that economic crises reinforce the preexisting gender inequalities in work time.
    Keywords: Economic Crisis; Gender Inequality; Time Use; Unemployment Risk; Unpaid Work; Turkey
    JEL: B54 J16 J22
    Date: 2011–09
  3. By: Beken Saatcioglu
    Abstract: What explains the EU compliance of Turkey’s ruling Justice and Development Party (AKP)? Since it came to power in 2002, AKP has launched legislative reforms in order to meet the European Union’s political membership criteria (i.e., democracy, rule of law, human rights and minority rights). These reforms are puzzling since they happened in the absence of the two conditions of compliance argued in the literature: (1) credible EU political conditionality, (2) liberal ruling parties in EU candidate states. I argue that AKP’s pro-EU reform agenda is explained by neither a belief in the possibility of membership via democratization (credible conditionality) nor liberal political identity. Rather, democratic measures under AKP are instrumentally induced. Two broad political motivations have guided AKP’s reform commitment: (1) the electoral incentive to please Turkey’s pro-EU membership electorate as well as AKP’s conservative/religious constituency eager to see freedom of religion expanded under EU conditionality, (2) the motive to use reforms to weaken domestic secular forces (i.e. the military and high courts) and survive as a party with Islamist roots in Turkey’s secular political system. The paper supports the argument with evidence gathered from original coding data for both conditionality and compliance as well as process-tracing.
    Keywords: Turkey; democracy; Europeanization; Europeanization
    Date: 2011–06–11
  4. By: Shaikh, Salman Ahmed
    Abstract: This paper discusses the ethical void in Capitalism which does not look prominent in welfare societies and states. But, its effects become more eminent in tough economic conditions. Unbridled pursuit of self interest, moral relativism, incentive-led economic choices and apathy to communal responsibilities would lead to a society where economic interests become the sole basis of maintaining and sustaining relationships. This inner void of identity and purpose at individual level and social void in the form of a stratified society bound together only for economic interests can be better filled with incorporating religion. Humans are much more than utility driven species, they are capable of using both instrumental and critical reasons to differentiate right from wrong and need reinforcement to adopt virtues influenced by an inner urge other than material interests as in Capitalism. This inner urge can be rekindled by looking beyond utility maximization to re-acknowledge the fundamental identity that humans are moral being than just an instrument for material advancement. Other sections of the paper provide an outline and salient features of Islamic Economics on different economic themes and perspectives for a comparative study. These provide a unique introduction to Islamic Economics in a mainstream framework.
    Keywords: Islamic Microeconomics; Institutional Economics; Islamic Economics; Islamic Ethics; Islamic Morality; Secular Ethics; Moral Relativism; Ethical Relativism
    JEL: Z12 A13 A14
    Date: 2011–09–16
  5. By: S. Mustafa Durakoglu
    Abstract: Turkey has been going through a liberalization process in its electricity market over the last decade. So far, the regulatory content of the market reforms has been in the center of attention in the literature, to the negligence of regulatory governance. However, recent studies, which applied the theoretical insights of new institutional economics to utilities regulation, have demonstrated that political endowments of the country draw the boundaries to which extent such regulatory content can be effectively implemented. In line with these studies, this paper adopts an institutional approach and attempts to identify the political endowments of Turkey in order to further analyze whether the market reforms succeeded in bringing about sufficient checks to cure the institutional problems. In other words, the paper takes a picture of the overall regulatory arena. The results show that the current regulatory structure, especially government-regulator relations, fails to meet good regulatory governance criteria. The paper also provides some policy suggestions.
    Keywords: electricity regulation; regulatory governance; institutions
    Date: 2011–02–25
  6. By: Shaikh, Salman Ahmed
    Abstract: Financial intermediation serves a valuable purpose, but it can also be structured using equity modes of financing. This can relieve the financee and increase diversity of entrepreneurial undertakings as in debt based commercial financing, there is little room for diversity with obligatory and stipulated servicing of debt. Using Islamic equity modes of financing poses the challenge of the agency problem and moral hazard. The extent of this agency problem in Mudarabah and its impact on economic payoffs between counterparties is analyzed in this study with a simulation model. Based on review of alternate solutions proposed, the author presents two possible covenants which could make Mudarabah mode of financing more acceptable and widely usable in financial intermediation. This would also further the egalitarian objectives of an Islamic economic order.
    Keywords: Interest free economy; Islamic Economic System; Mudarabah; Agency Problem; Moral Hazard; Adverse Selection
    JEL: L38 I31 O10
    Date: 2011–07–01
  7. By: Chiara Diana
    Abstract: The Education affair in Egypt is a Janus-faced case considered both as ‘local’ and ‘global’. There are local factors specific to this country - the Islamization of the Egyptian society’s moeurs - as well as elements of global and international nature, that insert the Egyptian education case in the larger analytical framework of Globalization. After highlighting how Egypt got involved in the global system by the application of new economic and neoliberal policies, the paper will focus on the dilemma of the Education affair, on islamized attitudes of the educational staff and on new educational policies aimed at contrasting with the rise of Islamization of all public education system. By this, two opposing forces are being in action in Egypt today: on the one hand, a ‘local’ inner force which pushes a part of society toward a radicalization of religious references and on the other hand, a ‘global’ international force which supports the Egyptian government to enforce laws, projects, programmes enabling to guarantee an apparent and precarious balance in the country.
    Keywords: globalization
    Date: 2011–01–15
  8. By: Ahmed, Khalil
    Abstract: Recent innovations in Islamic finance have changed the dynamics of the Islamic finance industry especially, in the area of sukuk or Islamic securities. Sukuk have become increasingly popular in the last few years, both as a means of raising government finance through sovereign issues, and as a way for companies to obtain funding through offering corporate sukuk. In this paper an attempt is made is to define sukuk and show the structure of sukuk. Furthermore, the paper shades some light on some accounting risk issues of sukuk. Finally, the paper presents benefits of sukuk for shareholders. However, this paper is a humble attempt to explain certain issues of sukuk. Certainly, for further information about sukuk, there are many publications that may assist the reader to derive the knowledge about sukuk.
    Keywords: Sukuk; structure; recognition; measurement and risk
    JEL: G3
    Date: 2011
  9. By: Moradi, Alireza
    Abstract: This paper analyzes inequality in Iran's health system from a financing perspective. Through grouped data of household budget published by Iran Statistic Center (ISC) and Beta Lorenz curve introduced in Kakwani (1980), it has been tried to extract Beta Lorenz curve and Kakwani progressivity index in each individual rural and urban district, and also to obtain other inequality measure in (1997-2007) Period.Then to study health inequality for the given period, we divided it into two sub-periods: (1997-2001) and (2002-2007) and finally to compare health inequality, using Bootstrap technique, we made a pseudo statistical population. Results show a degree of descending progressively in urban areas while in rural areas it has witnessed a slight improvement. However as the results show in both rural and urban areas, because of the negativity of Kakwani's index of the household expenditure which is financed by themselves is not progressive at all. Also the ratio of share richest quintile to poorest quintile for health care in urban and rural areas are 8.79 and 8.01 respectively.
    Keywords: Equity; Health care financing; Kakwani progressivity index; Iran
    JEL: D63 D31 P43 I18
    Date: 2011–05–06
  10. By: David Budde; Mathias Großklaus
    Abstract: This paper conceptualizes a framework of political steering that includes modern conceptions of power as formulated by Foucault, Habermas, Bourdieu and others and applies it to the empirical analysis of the EU neighborhood policies. Analyzing the promotion of human rights and democracy as part of a comprehensive security strategy in Morocco since 2003, the authors scrutinize the use and the resonance of hierarchic, indirect and soft steering modes in EU external governance in the Southern Mediterranean. The findings suggest that Europe employs a complex strategy that targets governing officials, civil society actors and society at large, each with a respective mix of steering modes. Whereas classic incentives failed to initiate reforms at the government level, they proved effective in empowering Moroccan civil society actors. Soft modes are shown to play a decisive role in shaping the self-image of the administration officials vis-à-vis the EU and the parameters of public discourse on human rights and democracy, thus allowing for non-governmental actors to encroach on the government and demand democratic reforms. The integrated perspective on steering mechanisms in EU neighborhood policies thereby reveals the need to further explore micro-techniques of power in external governance analysis.
    Keywords: power analysis; Mediterranean; Europeanization; Europeanization
    Date: 2011–12–01
  11. By: Clara Delavallade
    Abstract: This paper empirically analyzes the main microeconomic determinants of two forms of corruption supply, administrative corruption and state capture, by Maghrebi firms. This study is based on a new database of nearly 600 Algerian, Moroccan and Tunisian firms. I show that tax evasion is a major factor in the engagement of firms in administrative corruption. The latter increases with the share of sales hidden by the firm as long as it is below half of total sales, and slightly decreases thereafter. State capture is fostered by a failing enforcement of property and contract rights. Interestingly, less competitive firms appear to engage more in both forms of corruption than the most dynamic ones. After assessing the robustness of my empirical results, I draw a comparison of the factors of corruption in North Africa, Uganda and transition countries.
    Keywords: Supply of Corruption, Administrative Corruption, State Capture, Tax Evasion, Competitiveness, North Africa
    JEL: C2 D73 O17 H32
    Date: 2011

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