nep-ara New Economics Papers
on Arab World
Issue of 2013‒01‒07
eleven papers chosen by
Quentin Wodon
World Bank

  1. How Different Are the Wage Curves for Formal and Informal Workers? Evidence from Turkey By Badi H. Baltagi; Yusuf Soner Baskaya; Timur Hulagu
  2. Rethinking conditionality: Turkey's EU accession and the Kurdish question By Cengiz, F.; Hoffmann, L.
  3. Credit conditions and firm investment: Evidence from the MENA region By Herrala, Risto; Turk Ariss, Rima
  4. How to improve the economic and social performance of Eastern and Southern Mediterranean countries By Marek Dabrowski; Luc De Wulf
  5. From Kuttabs to Schools:Educational Modernization, Religion, and Human Capital in Twentieth Century Egypt By Saleh, Mohamed
  6. Voting Islamist or Voting secular? An empirical analysis of Voting Outcomes in “Arab Spring” Egypt By May Elsayyad; Shima'a Hanafy
  7. A Short Note on Removing the Energy Subsidies in Iran By Dehghan Nejad, Omid
  8. Excel formula and Islamic norms for home financing By Hasan, Zubair
  9. When Virtual Reality Meets Realpolitik: Social Media Shaping the Arab Government-Citizen Relationship By Ralf Klischewski
  10. Entrepreneurship Training and Self-Employment among University Graduates: Evidence from a Randomized Trial in Tunisia By Premand, Patrick; Brodmann, Stefanie; Almeida, Rita K.; Grun, Rebekka; Barouni, Mahdi
  11. Key sectors in the Moroccan economy: An application of input-output analysis By Tounsi, Said; Ezzahid, El Hadj; Alaoui, Aicha El; Nihou, Abdelaziz

  1. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); Yusuf Soner Baskaya (Türkiye Cumhuriyet Merkez Bankası); Timur Hulagu (Central Bank of Turkey)
    Abstract: This paper presents wage curves for formal and informal workers using a rich individual level data for Turkey over the period 2005-2009. The wage curve is an empirical regularity describing a negative relationship between regional unemployment rates and individuals' real wages. While this relationship has been well documented for a number of countries including Turkey, less attention has focused on how this relationship differs for informal versus formal employment. This is of utmost importance for less developed countries where informal employment plays a significant role in the economy. Using the Turkish Household Labor Force Survey for the period 2005-2009 observed over 26 NUTS-2 regions, we find that real hourly wages of informal workers in Turkey are more sensitive to variations in regional unemployment rates than wages of formal workers. This is true for all workers as well as for different gender and age groups Key Words: Formal/Informal Employment; Wage Curve; Regional Labor Markets JEL No. C26, J30, J60, O17
    Date: 2012–10
  2. By: Cengiz, F.; Hoffmann, L. (Tilburg University, Tilburg Law and Economics Center)
    Date: 2012
  3. By: Herrala, Risto (BOFIT); Turk Ariss, Rima (BOFIT)
    Abstract: The Arab Spring is a clear indicator of the urgency of achieving inclusive growth and ensuring job creation in the Middle East and North Africa (MENA) region, where private sector development is still hindered by limited access to credit. Following Kiyotaki and Moore's (1997) seminal model, we apply a novel methodological approach to a unique data set of MENA firms to estimate credit limits and their impacts on capital accumulation. Notably, we find higher credit limits in countries where the Arab Spring erupted than in other MENA countries and that their marginal effect on capital accumulation has been statistically and economically significant.
    Keywords: financing constraints; credit limits; MENA countries;
    JEL: G31 L20 O16
    Date: 2012–11–28
  4. By: Marek Dabrowski; Luc De Wulf
    Abstract: In this brief the authors analyze the key challenges facing the MED11 countries and propose policy measures that could improve the region’s economic and social performance.
    Keywords: Macroeconomics and macroeconomic policy, Trade, economic integration and globalization, Middle East and North Africa
    Date: 2012–11
  5. By: Saleh, Mohamed (TSE,IAST)
    Abstract: I examine the impact of the transformation of elementary religious schools (kuttabs) into modern primary schools in 1953-56 on the educational and occupational differentials between religious groups in Egypt. Before the reform, non-Muslims enjoyed better educational and occupational outcomes than the Muslim majority and, unlike Muslims, were almost all enrolled in modern schools. Using several new data sources, the individual-level census sample from 1996, the official schooling reports from 1907 to 1969, and the village/urban quarter-level census data from 1897 to 1986, I find that the inter-religious educational and occupational gaps both declined in the second half of the twentieth century. The educational reform seems to explain the reduction in the occupational gap, but cannot explain the decline of the educational gap.
    Keywords: educational modernization; religious schools; Middle Eastern economic history; human capital; modern schools
    JEL: I N35
    Date: 2012–08
  6. By: May Elsayyad (Max Planck Institute for Tax Law and Public Finance); Shima'a Hanafy (University of Marburg)
    Abstract: This paper empirically studies the voting outcomes of Egypt’s first parliamentary elections after the Arab Spring. In light of the strong Islamist success in the polls, we explore the main determinants of Islamist vs. secular voting. We identify three dimensions that affect voting outcomes at the constituency level: the socio-economic profile, the economic structure and the electoral institutional framework. Our results show that education is negatively associated with Islamist voting. Interestingly, we find significant evidence which suggests that higher poverty levels are associated with a lower vote share for Islamist parties. Later voting stages in the sequential voting setup do not exhibit a bandwagon effect.
    Keywords: Voting Outcomes, Arab Spring, Political Islam, Sequential Voting
    JEL: D72 D78 O53 P26 Z12 Z13
    Date: 2012
  7. By: Dehghan Nejad, Omid
    Abstract: This note provided some reasons that why the Iranian government should avoid removing subsidies in the current Iranian economy situation.
    Keywords: Energy; subsidies; natural resources; Iran's economy
    JEL: Q43
    Date: 2012–12–06
  8. By: Hasan, Zubair
    Abstract: This paper is in a series of writings on Islamic home financing. It spells out certain norms Islamic banks must observe in home financing and demonstrates that the conventional model based on an Excel formula does not meet the stated norms. It may well be emphasized that in Islam the question of observing these norms arises before not after the selection of the formula: additional juristic requirements may only follow subsequently. Is it not then queer that many Islamic banks are using the formula to determine the periodic installment payments in their home financing programs? The paper finds for example the popular MMP non-compliant of the stated norms. It presents a new model and argues that the alternative is not only fully observant but is superior to MMP on some other counts as well.
    Keywords: Home finance; Excel amortization formula; Compounding; Islamic norms; Justice; MMP
    JEL: G21
    Date: 2012–11–02
  9. By: Ralf Klischewski (Faculty of Management Technology, The German University in Cairo)
    Abstract: Since most activists participating in the recent uprisings in Arab countries have been using social media to an unprecedented extent, public analyst and researchers have rushed to reflect on and explain the phenomena, often attributing a ‘change agency’ to social media as such. This exploratory research combines recent publications and use statistics with insights from blogs and focus group meetings in order to challenge our understanding of the role of social media and its usage in reshaping the government-citizen relationship: Are the traits of social media significant enough to single them out and discuss their specific impact on the government-citizen relationship? Are we well advised to attribute an ‘agency’ of social media in shaping politics and inducing political change? And in view of the actual use of social media: What are the options of containing emerging ‘destructive’ phenomena and ‘improving’ the government-citizen relationship? Answers are presented as lessons learned for future e-government research: (1) Social media enable a new political sphere for Arab citizens, however (2) social media as such do not act and therefore do not 'create' e.g. democracy, rather (3) social media need care taking to serve well as mediator among citizens and between citizens and government.
    Keywords: Social media, government-citizen relationship, Egypt, Arab countries, e-government research
    JEL: M15
    Date: 2012–12
  10. By: Premand, Patrick (World Bank); Brodmann, Stefanie (World Bank); Almeida, Rita K. (World Bank); Grun, Rebekka (World Bank); Barouni, Mahdi (CRES, République Tunisienne)
    Abstract: In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquée were given the opportunity to graduate with a business plan instead of following the standard curriculum. This paper relies on randomized assignment of the entrepreneurship track to identify impacts on labor market outcomes one year after graduation. The analysis finds that the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioral skills. Participation in the entrepreneurship track also heightened graduates' optimism toward the future shortly after the Tunisian revolution.
    Keywords: youth employment, self-employment, entrepreneurship training, program evaluation, behavioral skills, soft skills
    JEL: O12 J24 I21 L26
    Date: 2012–12
  11. By: Tounsi, Said; Ezzahid, El Hadj; Alaoui, Aicha El; Nihou, Abdelaziz
    Abstract: The exploration of the structural features and sectoral interdependences of and in an economy is fundamental for the understanding of its modes of functioning and of its transformations over time. Input-output analysis is largely used to fulfill this objective. Furthermore, information provided by the Leontief inverse matrix is useful for the identification of key sectors. This identification may guide policy makers in setting an adequate industrial strategy. In this paper, the classification of productive sectors is performed by using the unweighted Rassmussen approach. The ordering of sectors depends on the intensity of their links with other sectors. Two results ought to be highlighted. First, key sectors of the Moroccan economy reduced to two sectors in 2007 instead of four sectors in 1998. Second, the ordering of sectors is highly sensitive to the precision of the data and to the year in which the classification is realized. --
    Keywords: input-output analysis,backward linkage,forward linkage,unweighted Rassmussen approach,Morocco
    JEL: C67
    Date: 2012

This nep-ara issue is ©2013 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.