nep-ara New Economics Papers
on Arab World
Issue of 2012‒05‒15
fifteen papers chosen by
Quentin Wodon
World Bank

  1. Hoarding of International Reserves and Sterilization in Dollarized and Indebted Countries : an effective monetary policy? By Layal Mansour
  2. حوكمة الوقف الاسلامى By Elasrag, Hussein
  3. الوقف الاسلامى كأحد أدوات المسؤولية الاجتماعية للشركات By Elasrag, Hussein
  4. Children and social protection in the Middle East and North Africa - A mapping exercise By Paola Pereznieto, Rachel Marcus and Erin Cullen
  5. Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs By Dinar, Ariel
  6. Return Migration and the Survival of Entrepreneurial Activities in Egypt By Francesca Marchetta
  7. Stock return comovement and systemic risk in the Turkish banking system By Binici, Mahir; Köksal, Bülent; Orman, Cüneyt
  8. Are current account deficits sustainable? New evidence from Iran using bounds test approach to level relationship By Heidari, Hassan; Katircioglu, Salih Turan; Davoudi, Narmin
  9. Money and prices in the Maghreb countries: cointegration and causality analyses By Benamar, Abdelhak; CHERIF, Nasreddine; Benbouziane, Mohamed
  10. Examining Theories of Growth & Development & Policy Response Based on Them from Islamic Perspective By Shaikh, Salman
  11. Remittances Channel and Fiscal Impact in the Middle East, North Africa, and Central Asia By Yasser Abdih; Christian Ebeke; Adolfo Barajas; Ralph Chami
  12. Computer-based business simulations as revealers of cultural and learning differences. The case of Business Administration and Business Informatics Students in Egypt. By Nicolas Antheaume; Marie Catalo; Howayda Ismail
  13. Unemployment and Labor Market Issues in Algeria By Davide Furceri
  14. On the Norms of Charitable Giving in Islam: A Field Experiment By Fatima Lambarraa; Gerhard Riener
  15. Input, Output Technical Efficiencies and Total Factor Productivity of Cereal Production in Tunisia By Dhehibi, Boubaker; Bahri, Haithem; Annabi, Mohamed

  1. By: Layal Mansour (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)
    Abstract: The primary aim of this paper is to explore the effectiveness of Hoarding International Reserves and Sterilization in dollarized and indebted countries such as Turkey and Lebanon, by measuring the sterilization coefficient, and the offset coefficient. It also focuses on exploring the link between the sources of Reserves and the external debt. Using monthly data collected from the International Monetary Fund and from the Central Banks of Turkey and Lebanon between January 1994 and February 2011, we applied a 2SLS regression models and we identified explanatory variables that enabled us to estimate the aforementioned coefficients. Our results showed that despite their theoretical practice of sterilization policy, economic constrains of these countries contribute to weaken the efficacy expected from monetary policies.
    Keywords: Monetary policy, International Reserve, Sterilization, Foreign Liabilities,Dollarized countries, Turkey, Lebanon
    JEL: E52 E58 F30 F34
    Date: 2012
  2. By: Elasrag, Hussein
    Abstract: This paper aims to shed light on the concept of corporate governance for the Islamic endowment, or "governance of Islamic Waqf". There is no doubt that the governance of the Islamic endowment are now occupies great importance, especially in light of the recent trends in the establishment of Waqf. It now has a large mass in terms of market value of assets. The subject of governance of Islamic Waqf increasing importance to control this role and evaluation performance of endowment to the best possible level.
    Keywords: Governance ; Islamic Waqf; Islamic endowment
    JEL: O1 G3
    Date: 2012–03
  3. By: Elasrag, Hussein
    Abstract: This research aims to shed light on the role of the Islamic Waqf as a tools of corporate social responsibility.Islamic Waqf can play an important role in activating the principle of corporate social responsibility through the following: achieving sustainable development , developing small and medium enterprises by contributing to the foundations of Waqf and more contribution of many companies in the work of the Waqf and participate in the endowment for the development and to achieve coordination between the various companies in the field of social responsibility.
    Keywords: Islamic Waqf ; corporate social responsibility; Islamic countries
    JEL: M14
    Date: 2012–02
  4. By: Paola Pereznieto, Rachel Marcus and Erin Cullen
    Abstract: This paper was commissioned by the UN Children’s Fund’s (UNICEF’s) regional office in the Middle East and North Africa (MENA). UNICEF’s rationale for engagement in social protection is grounded in its commitment to human rights, and recognition of the contribution social protection can make to realising the rights of all children, and particularly the most vulnerable and disadvantaged. This essentially desk-based exercise maps key social protection initiatives and stakeholders at national level in the MENA region, with a specific focus on child-sensitive social protection.
    Keywords: Social budgeting, policymaking, public finance management,social protection
    Date: 2011
  5. By: Dinar, Ariel
    Abstract: Water is increasingly becoming a limiting factor for sustainable economic growth and development in many countries. Its allocation has significant impacts on overall economic efficiency, particularly with growing physical scarcity in certain regions. Greater water supply variability further increases vulnerability in affected regions. Water also has become a strategic resource involving conflicts among those who may be affected differently by various policies. This paper analyzes various policy interventions aimed at improving water allocation decisions, using a novel approach that incorporates macro and micro level considerations in a unified analytical framework. The framework facilitates assessment of various linkages among policies and their impacts within individual sectors and economy-wide. Drawing on country based studies in Morocco, South Africa, Turkey, and Mexico, the analysis reveals difficult tradeoffs among various policy objectives, including priorities placed on different sectors, regional advantages, and general economic efficiency gains versus broader social impacts. The comparison of policy impacts demonstrates the usefulness of the framework in information that policy makers can use to rank the policy interventions according to the emphasis placed on different policy objectives. The paper also compares approaches used in other studies that apply computable general equilibrium models in various contexts of water, environment and agriculture.
    Keywords: Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water Supply and Systems,Water and Industry,Water Conservation
    Date: 2012–05–01
  6. By: Francesca Marchetta (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The literature shows that temporary international migrants have a high propensity to opt for an entrepreneurial activity upon return, but the prospects of survival of these activities have not been explored. We address this research question using longitudinal Egyptian data. We find that entrepreneurs' migration experience significantly improves the chances of survival of their entrepreneurial activities, adopting econometric techniques that control for return migrants' non-random selection in unobservables. We resort to a bivariate probit model and a two-stage residual inclusion estimator, using the rate of population growth and the real oil price as alternative instruments for migration.
    Keywords: return migration;entrepreneurial activities;panel data;endogeneity;North Africa;Egypt
    Date: 2012–05–03
  7. By: Binici, Mahir; Köksal, Bülent; Orman, Cüneyt
    Abstract: This paper investigates the evolution of systemic risk in the Turkish banking sector over the past two decades using comovement of banks’ stock returns as a systemic risk indicator. In addition, we explore possible determinants of systemic risk, the knowledge of which can be a useful input into effective macroprudential policymaking. Results show that the correlations between bank stock returns almost doubled in 2000s in comparison to 1990s. The correlations decreased somewhat after 2002 and increased again as a result of the 2007-2009 financial crisis. Main determinants of systemic risk appear to be the market share of bank pairs, the amount of non-performing loans, herding behavior of banks, and volatilities of macro variables including the exchange rate, U.S. T-bills, EMBI+, VIX, and MSCI emerging markets index.
    Keywords: Stock returns; comovement; systemic risk; Turkish banking system
    JEL: G32 C22 G21 G01
    Date: 2012–05–01
  8. By: Heidari, Hassan; Katircioglu, Salih Turan; Davoudi, Narmin
    Abstract: This paper provides new evidence on the long-run relationship between exports and imports of the Iranian economy by employing bounds test approach to level relationship. In Iran, there have been many unusual policy changes and/or external shocks to the economy which resulted in the occurrence of multitude of structural breaks in macroeconomic variables. By taking these breaks into account, the results of the present study reveal that there is long run equilibrium relationship between imports and exports over the sample period, 1960-2007. This result confirms the finding of Arize (Imports and Exports in 50 Countries: Tests of Cointegration and Structural Breaks, 2002) by employing bounds tests to level relationship and suggests that current account deficits in Iran are sustainable. --
    Keywords: Exports,imports,current account,bounds test,Iran
    JEL: C22 F10 F32
    Date: 2012
  9. By: Benamar, Abdelhak; CHERIF, Nasreddine; Benbouziane, Mohamed
    Abstract: Inflation has been the major global economic problem for most economies throughout the world over the last three decades. It affects individuals, businesses and governments. Many competing hypotheses have been advanced in the literature to explain its causes and give the appropriate remedial policies. One of these hypotheses is central to the quantity theory of money. According to this hypothesis, inflation results solely from a maintained expansion of the money stock at rates in excess of increases in the amount of money demanded in the economy. The paper examines the money-price relationship in the Three Maghreb countries (namely Algeria, Morocco and Tunisia) using Granger causality test. The results do not tend to support the quantity theorist’s view that money and prices have a long-run relationship, i.e., they do not tend to drift apart in the long run. However, as suggested by Granger (1986) money and prices could still cointegrate if other variables, which may have influenced prices, were included in the cointegration regressions. Second, the finding of a unidirectional causation from money to prices in the case of Morocco and Tunisia is in line with the monetarist’s view that money precedes and causes inflation. In fact, this finding supports Darrat’s (1986) finding that money causes inflation in Morocco and Tunisia. Thus the monetary authorities in these two countries can consider control of the money supply (M1) or (M2) to influence and control inflation. As suggested by monetarists, this can be best achieved by maintaining a steady rate of growth of the money supply, roughly corresponding to the long-run growth of the real output. Our results also show the apparent absence of causality between money and prices in the case of Algeria which is not easy to explain. A possible explanation may be that the data for the Consumer Price Index (CPI) are not reliable. This may be true given that the prices, which are reported by the authorities, are always lower than those actually paid in the market place.
    Keywords: Cointegration – bootstrap- money – prices- Granger causality – inflation – Maghreb
    JEL: C32 E31 E52
    Date: 2011–12–21
  10. By: Shaikh, Salman
    Abstract: Poverty and inequality around the world has been rising over the last three decades and the attainment of the Millennium Development Goals (MDGs) seems a far fetched goal. In explaining underdevelopment, Classical Economics has offered many theories and models including but not limited to Rostow’s Stages of Growth Theory, Harrod-Domar Model, Solow’s Growth Model, Dependency Theory, Lewis Two Sector Model, Neo-colonial Dependence Model, False-Paradigm Model, and Dualistic-Development Thesis etc. This study analyzes the theories of development proposed in classical literature in the light of Islamic Economics and investigates whether policy response influenced by some of these theories had been effective or not in selected countries and regions. In light of recent developments in growth literature, the last section of the paper also analyzes whether Islamic economics principles have the capacity to ensure that determinants of growth suggested by ‘new growth theory’ will exist in an Islamic economy and together with these, do Islamic economic principles have other distinctive mechanisms and institutions that can help in the development process.
    Keywords: Interest free economy; Public finance; Taxation; Inequality; Income redistribution; Islamic economic system; fiscal policy; deficit financing
    JEL: O11 L38 I31
    Date: 2012–04–31
  11. By: Yasser Abdih; Christian Ebeke; Adolfo Barajas; Ralph Chami
    Abstract: This paper identifies a remittances channel that transmits exogenous shocks, such as business cycles in remittance-sending countries, to the public finances of remittance-receiving countries. Using panel data for remittance-receiving countries in the Middle East, North Africa, and Central Asia, three types of results emerge. First, remittances appear to be strongly procyclical vis-à-vis sending country income. Second, remittances tend to be spent on consumption of both imported and domestically produced goods, rather than on investment. Third, shocks in the sending countries are transmitted via remittances to the public finances - specifically, tax revenues - of receiving countries. In the case of the 2009 global downturn, this impact was particularly strong for several countries in the Caucasus and Central Asia, whereas in the subsequent recovery in 2010 virtually all receiving countries benefitted from an upturn in remittance-driven tax revenues.
    Keywords: Business cycles , Capital inflows , Cross country analysis , Demand , External shocks , Middle East and Central Asia , North Africa , Private consumption , Tax revenues , Workers remittances ,
    Date: 2012–04–25
  12. By: Nicolas Antheaume (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Marie Catalo (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Howayda Ismail (UFE - Université française d'Egypte - Université française d'Egypte)
    Abstract: In this article we demonstrate, through the case of Egypt, how the emphasis on one specific learning mode from primary through to secondary school, and to a lesser extent, culture, impact learning abilities. We describe how Egyptian students are impaired when confronted to learning modes they have not encountered prior to University, when they join a businessadministration, bi-national, double-degree programme. We explain how a "globalized" method (computer based business simulation) was blended with a local context, and turned into a glocal one to respond to a learning challenge and to the needs of a double degree curriculum (French and Egyptian).
    Keywords: Management education ; experiential learning ; learning modes ; culture ; computer-based business simulations ; Egypt ; France ; Globalization of Business and Management Education
    Date: 2012–05–04
  13. By: Davide Furceri
    Abstract: The aim of this paper is to analyze unemployment and labor market developments in Algeria and assess the factors that may hamper employment creation. The results of the paper suggest that the relative low output-employment elasticities and rigid labor market are the main factors behind the still high level of unemployment, particularly among the youth. Simulation analyses, based on the results on the relation between labor market institutions and unemployment, show that improvement in labor market conditions in Algeria would be key in reducing unemployment both in the short- and medium-term.
    Keywords: Labor markets , Unemployment , Wage bargaining ,
    Date: 2012–04–13
  14. By: Fatima Lambarraa (Georg-August-University Göttingen); Gerhard Riener (University of Jena)
    Abstract: Charitable giving is one of the major obligations Islam and a strong Muslim norm endorses giving to the needy, but discourages public displays of giving. This norm is puzzling in light of previous evidence, suggesting that making donations public often increases giving. We use an experiment to assess the effects this moral prescription on actual giving levels in an anonymous and in a public setting. We conducted two field experiments with 534 and 186 subjects at Moroccan educational institutions. Subjects who participated in a paid study were given the option to donate from their payment to a local orphanage, under treatments that varied the publicity of the donation and the salience of Islamic values. In the salient Islamic treatment, anonymity of donations significantly increased donation incidence as well as average donations for religious subjects. This stands in stark contrast to most previous findings in the charitable giving literature.
    Keywords: Charitable giving; Islam; Social pressure; Priming; Religion; Norms; Field experiment
    JEL: H40 C93 D01 Z12
    Date: 2012–05–03
  15. By: Dhehibi, Boubaker; Bahri, Haithem; Annabi, Mohamed
    Abstract: In this paper, farm level technical efficiency of production and its determinants are investigated in a sample of 51 cereal producing farms located in the main cereal production region in Tunisia using a stochastic frontier production model. Empirical findings show that labor input factor appears with a minimal effect on the production. The hypothesis of constant returns to scale is rejected at the 5% level of significance, and returns to scale were found to be decreasing. Moreover, the estimated coefficients in the technical inefficiency model are also as expected. The estimated coefficients of the instruction level of farmer and the rotation, technical variable, are negatives and statistically significant at 5% level, which indicates their positive effect on technical efficiency. In addition, results indicated that estimated technical efficiency of cereal production in the sample varied widely, ranging from 52.63% to 94.62, with a mean value of 77%. This suggests that, on average, cereal producing farmers could increase their production by as much as 23% through more efficient use of production inputs. On a second step, Timmer and Kopp indexes of technical inefficiency were estimated for the same farms using a Cobb–Douglas frontier production function with a composite error term, and a developed relationship between these two indices. Results show that the mean values of the Timmer and Kopp TE indices were over 0.80, but one half of the farms were below 0.80 for the Timmer index and below 0.83 for the Kopp index. The level of inefficiency was found to be related to farm size: small and large farms were shown to be more technically efficient than medium-sized farms. With the given inputs, the production of cereals could be increased by 20% on average through making all farms 100% efficient. Alternatively, inputs could be reduced by 17% on average to produce the same amount of cereal output. Finally, the lower level of efficiency but higher yield and total factor productivity in the medium-sized farms means that more cereals can potentially be produced in these farms. The findings revealed that significant factors related to TFP were age, education level and the share of wheat crops into total cropped area. These results calls for policies aimed at provision of training programs, extensions services. In addition, the encouragement of experienced farmers by applying improved input management on these farms can be recommended alongside appropriate new technologies, especially for wheat farmers.
    Keywords: Technical efficiency, Timmer index, Kopp index, TFP, Cereal farms, Tunisia, Agricultural and Food Policy, Farm Management, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, C43, O47, Q12,
    Date: 2012

This nep-ara issue is ©2012 by Quentin Wodon. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.