nep-ara New Economics Papers
on Arab World
Issue of 2012‒07‒23
ten papers chosen by
Quentin Wodon
World Bank

  1. Mitigating Turkey's trilemma trade-offs By Cortuk, Orcan; Akcelik, Yasin; Turhan, İbrahim
  2. How Quality of Institutions Shape the Expansion of Islamic Finance By Laurent Weill
  3. Does longer compulsory education equalize educational attainment by gender, ethnicity, and socioeconomic background? By Kirdar, Murat G.; Dayioglu, Meltem; Koc, Ismet
  4. Was the Middle East's economic descent a legal or political failure? Debating the Islamic Law Matters Thesis. By Adeel Malik
  5. On the Norms of Charitable Giving in Islam: A Field Experiment By Lambarraa, Fatima; Riener, Gerhard
  7. EU enlargement in an uncertain macroeconomic environment: How do changes in macroeconomic conditions influence the potential impacts on agricultural markets of a Turkish accession to the EU? By Fellmann, Thomas; van Leeuwen, Myrna; Salamon, Petra
  8. My neighbor is a farmer. How much agriculture is there in the ENPI CBC Programmes for the Mediterranean Basin? By Perretti, Biagio; Favia, MariaFara
  10. The Willingness to Pay of European Consumers for Jointly Produced Israeli – Palestinian Products By Wendler, Cordula; Liebe, Ulf; Ihle, Rico; von Cramon-Taubadel, Stephan

  1. By: Cortuk, Orcan; Akcelik, Yasin; Turhan, İbrahim
    Abstract: We study the trilemma conguration of the Turkish economy for the period between 2002 and 2012. The paper starts by empirically testing the Mundell-Fleming theoretical concept of an \impossible trinity" (trilemma) for Turkey, following Aizenman, Chinn and Ito (ACI, 2008). This includes calculating the trilemma indices and regressing them on a constant. We show that there is a misspecication with ACI approach and improve the specication by applying a Kalman lter to the classical linear regression that enables us to capture the time-varying importance of policy decisions within the trilemma framework. By comparing the residuals of each approach, we show that Kalman lter analysis has superior results. Then, our analysis continues by revealing a role for central bank foreign reserves and required reserves in mitigating the trilemma tradeos { we show that foreign reserves to GDP ratio and required reserve ratio have positive signicant impact on the residuals obtained from the trilemma regression, thus making the policy tradeos smaller.
    Keywords: Trilemma; impossible trinity; required reserves; international reserves
    JEL: F5 F3 E4
    Date: 2012–06–19
  2. By: Laurent Weill (LaRGE Research Center, Université de Strasbourg)
    Abstract: The Arab Spring is expected to enhance the weak quality of institutions in MENA countries. We show in this paper how these changes can contribute to favor the expansion of Islamic finance by analyzing the role of quality of institutions on cost efficiency of Islamic and conventional banks. We measure cost efficiency of banks on a wide dataset of banks from 17 countries in which Islamic and conventional banks coexist. We find that Islamic banks have lower cost efficiency than conventional banks, which can hamper their expansion, as greater costs are associated with higher prices. However better quality of institutions reduces the gap in efficiency between Islamic and conventional banks. Moreover we find that, if Arab countries can increase the quality of institutions, Islamic banks will not suffer from a disadvantage in efficiency relative to conventional banks. Thus, our main conclusion is that the Arab Spring can favor the development of Islamic finance by improving the quality of institutions.
    Date: 2012
  3. By: Kirdar, Murat G.; Dayioglu, Meltem; Koc, Ismet
    Abstract: This study examines the effects of the extension of compulsory schooling from 5 to 8 years in Turkey—which substantially increased the grade completion rates not only during the new compulsory years but also during the high school years—on the equality of educational outcomes among various subpopulations. While longer compulsory schooling decreases the educational gap for most subgroups—in particular, the gender gap in rural areas, the ethnic gap among men in both urban and rural areas, and the ethnic gap among women in urban areas; at the same time, it increases the gender gap in urban areas as well as the ethnic gap among women in rural areas. For instance, the gap in the 8th grade completion rate between ethnic Turkish and Kurdish women in rural areas increases from 22.5 to 44.6 percentage points for the 1989 birth-cohort. These findings suggest that the differences among subpopulations in the change in schooling costs (both monetary and psychic) during the new compulsory schooling years, in the costs of non-compliance with the policy, in labor force participation, and in the drop-out behavior in earlier grades are the key underlying factors.
    Keywords: Compulsory Schooling; Gender; Ethnicity; Parental Schooling; Regression Discontinuity
    JEL: I21 J15 I28 J16
    Date: 2012–07
  4. By: Adeel Malik
    Abstract: An influential thesis [Kuran, 2011, The Long Divergence] locates the economic failure of the Middle East in Islamic legal arrangements that laid the basis for organizational deficiencies. This article critically scrutinizes this thesis using the lens of political economy and argues that tracing the impact of Islamic law without a discussion of the enforcement environment is unconvincing. Specifically, as a legal explanation for development, it is important to probe the extent to which Islamic law was embedded in the material domain and influenced by preferences of political incumbents. A key contention of the article is that Islamic law can be described, at best, as a proximate rather than a deep determinant of development, and that there is limited evidence to establish it as a causal claim. Finally, I propose that, rather than exclusively concentrating on legal impediments to development, a more promising avenue for research is to focus on the co-evolution of economic and political exchange, and to probe why the relationship between rulers and merchants differed so markedly between the Ottoman Empire and Europe.
    Keywords: Law and Economics, Islamic Economic, Waqf
    JEL: K00 P4 N4 O3
    Date: 2012
  5. By: Lambarraa, Fatima; Riener, Gerhard
    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 report the results two field experiments with 534 and 186 participants at Moroccan educational institutions (among them two religious schools) to assess the effects this moral prescription on actual giving levels in anonymous and public settings. 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 from 59% to 77% percent as well as average donations for religious subjects from 8.90 to 13.00 Dh. This findings stand in stark contrast to most previous findings in the charitable giving literature and suggest to rethink fundraising strategies in Muslim populations.
    Keywords: Charitable giving, Islam, Social pressure, Priming, Religion, Norms, Field experiment, Institutional and Behavioral Economics, H40, C93, D01, Z12,
    Date: 2012
  6. By: Dhraief, Mohamed Zied; Oueslati, Meriem; Dhehibi, Boubaker
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2012
  7. By: Fellmann, Thomas; van Leeuwen, Myrna; Salamon, Petra
    Keywords: Agricultural and Food Policy, International Relations/Trade, Political Economy,
    Date: 2012
  8. By: Perretti, Biagio; Favia, MariaFara
    Abstract: CBC programmes are a key pillar of the current neighbourhood policy of the EU, and will play an even stronger role in the next future. In this note a simple framework for the assessment of the relevance and impact of these programmes was proposed, and some preliminary findingswhere discussed, for the ENPI MED CBC and the Italy –Tunisia programme The neighbour regions were classified on the basis of structural heterogeneity and strength of interactions. In this framework, the Mediterranean neighbourhood, could be classified as “ separated” or “isolated” with a strong structural diversity, that generates a potential for intensive interaction, and strong risks of tensions and open crisis. Agriculture and rural areas are among the sectors where these features appear with the strongest intensity. In this scenario, CBC actions could contribute to the generation of a virtuous process of convergence, in the direction of declining structural dualisms, and increasing synergic flows. This role is not played, or at least is not significantly appearing yet in the ENPI CBC programmes. The ENPI CBC strategy doesn’t explicitly identify rural development issues as main priority. The only two programmes activated in the Mediterranean Basin MED and Italy Tunisia, show quite different focus on Rural Issues. In the ENPI MED, rural issues are still marginal, per quality and quantity of projects. The smaller, programme Italy-Tunisia seems much more focused on the theme, with a majority of projects directly targeting agro-food topics. A stronger impact of CBC programmes on rural development seems opportune, specially after the structural changes brought by the Arab Spring, that demand a new model of integration, and sustainable development in the Mediterranean Basin.
    Keywords: ENPI CBC Programmes, Rural development, Mediterranean Basin., Agricultural and Food Policy, International Relations/Trade, O19, R58,
    Date: 2012–06
  9. By: Dhraief, Mohamed Zied; Oueslati, Meriem; Dhehibi, Boubaker
    Abstract: The aim of the paper is to analyze the impact of socio-economic and demographic variables on the demand for meat and fish for Tunisian consumers. This study is one of the first applications in Tunisia with respect to the demand for meat and fish that simultaneously covers two important aspects: the non-imposition of, a priori, a functional form and the use of cross-section data including demographic and socioeconomic variables. The main results show that meat and fish consumption patterns by age, level of income and level of education are relatively different as regards to the economic factors (food expenditure and price). The changes in demographic and economic characteristics are influencing the changes in meat and fish demand.
    Keywords: meat and fish demand, food demand systems, synthetic model, economic and socio-demographic factors., Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Political Economy,
    Date: 2012
  10. By: Wendler, Cordula; Liebe, Ulf; Ihle, Rico; von Cramon-Taubadel, Stephan
    Abstract: Ethical aspects of food products have become increasingly important for Western European consumers. One example of such ethical consumption attributes are “peace products”, commodities produced in peaceful economic cooperation between members of conflicting parties in areas of political conflict. In the context of the Israeli-Palestinian conflict, we investigate the willingness to pay of consumers from four European countries for two food products which are jointly produced by Israelis and Palestinians. We conduct a cross country web survey including a choice experiment addressed to the four European countries. Preference heterogeneity with regard to the willingness to pay for peace building products is taken into account by including survey questions on lifestyle factors, attitudes towards Israel, Palestine and the Israel-Palestinian conflict, personal and social norms as well as socio-demographics. Using random parameter logit models we find that consumers in Great Britain and Germany are willing to pay a premium first off all for European products compared with products from Israel or the Palestinian Territories alone. The willingness to pay for Israeli/Palestinian peace products is lower compared to the surplus for European products. But the cooperation product is favored instead of a single county product, just from Israel or the Palestinian Territories. Hence, cooperation in the form of joint production of peace products would generate benefits.
    Keywords: Choice experiments, ethical consumption, Middle East conflict, willingness to pay, Community/Rural/Urban Development, International Relations/Trade, D12, M14, O57, Q13, Z13,
    Date: 2012–06–29

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