nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒03‒15
eighteen papers chosen by
Paul Makdissi
University of Ottawa

  1. Average Effective Tax Rates on Consumption for Turkey : New Data and a Comparative Analysis By Murat Ungor
  2. Research Ranking Place of Turkish Economists in the World By Ferda, HALICIOGLU
  3. Macroprudential Policies as Buffer Against Volatile Cross-border Capital Flows By Ahmet Faruk Aysan; Salih Fendoglu; Mustafa Kilinc
  4. "Time and Consumption Poverty in Turkey" By Thomas Masterson; Emel Memis; Ajit Zacharias
  5. Impact of Internal Migration on Political Participation in Turkey By Ali T. Akarca; Aysit Tansel
  6. Turning Back to Turkey - or Turning the Back to Germany?: Remigration Intentions and Behavior of Turkish Immigrants in Germany between 1984 and 2011 By Claudia Diehl; Elisabeth Liebau
  7. Managing Short-Term Capital Flows in New Central Banking: Unconventional Monetary Policy Framework in Turkey By Ahmet Faruk Aysan; Salih Fendoglu; Mustafa Kilinc
  8. Was migrating beneficial? Comparing social mobility of Turks in Western Europe to Turks in Turkey and Western European natives By Carolina V. Zuccotti; Harry Ganzeboom; Ayse Guveli
  9. Is crime in Turkey economically rational? By Lauridsen, Jørgen T.; Zeren, Fatma; Ari, Ayse
  10. Interest Rate Corridor, Liquidity Management and the Overnight Spread By Hande Kucuk; Pinar Ozlu; Anil Talasli; Deren Unalmis; Canan Yuksel
  11. The impact of Migrant Workers ' Remittances on the Living Standards of families in Morocco: a Propensity Score Matching Approach By Miftah, Amal; Bouoiyour, Jamal
  12. Capital Requirements, Banking Supervision and Lending Behavior: Evidence from Tunisia By Guizani, Brahim
  13. SAM Multiplier and its Application to Total Poverty Gap By durongkaveroj, wannaphong
  14. Labor mobility, economic shocks, and jobless growth : evidence from panel data in Morocco By Verme, Paolo; Barry, Abdoul Gadiry; Guennouni, Jamal; Taamouti, Mohamed
  15. Resistance to the Regulation of Common Resources in Rural Tunisia By Xiaoying Liu, Mare Sarr and Timothy Swanson
  16. Market Power and Collusion on Interconnection Phone Market in Tunisia : What Lessons from International Experiences By Sami Debbichi; Walid Hichri
  17. Can the UAE Avoid the Oil Curse by Economic Diversification? By Haouas, Ilham; Heshmati, Almas
  18. Demokrasiye Gecis, Reel ucretler ve Verimlilik: Turk Imalat Sanayiinden Bulgular By Erol Taymaz; Ebru Voyvoda; Kamil Yilmaz

  1. By: Murat Ungor
    Abstract: [EN] Consumption taxes are the most important source of revenues used to finance public spending in Turkey, where the share of taxes on consumption (general and specific) is more than 40%. This study computes the average effective tax rates on consumption for Turkish economy and provides a glimpse of how Turkey stands in comparison with other OECD countries. We provide new estimates, in a comparative perspective, using national income accounts and tax revenue statistics. Average effective tax rates on consumption increased from around 10.5% in 1998 to around 15.5-16.5% in 2012. Turkey has one of the lowest average effective tax rates on consumption in the OECD and the calculated tax rates are very similar to those for Greece in recent years. We present an exercise and show the importance of time-variant consumption taxes to understand the changes in aggregate labor supply in Turkey. We also note that the revision to the national accounts has effects on the calculated tax rates. [TR] Turkiye’de, tuketim (genel ve ozel) uzerindeki vergiler, yuzde 40’in uzerinde bir pay ile kamu harcamalarini finanse etmek icin kullanilan vergi gelirlerinin en onemli kaynagidir. Bu calisma, milli gelir hesaplari ve vergi hasilati istatistiklerini kullanarak, Turkiye ekonomisi icin, diger OECD ulkeleri ile karsilastirmali bir bicimde, tuketim uzerindeki ortalama efektif vergi oranlarini sergilemektedir. Hesaplanan vergi oranlari kullanilarak, tuketim uzerindeki efektif vergi oranlarinin tuketim-calisma uzerine etkileri incelenmektedir. Turkiye ve diger ulkeler icin rapor edilmis olan seriler, ulke karsilastirmalarini iceren degisik calismalarda kullanilabilir.
    Date: 2014
  2. By: Ferda, HALICIOGLU
    Abstract: This research note presents the research rankings of Turkish economists in the world using RePEc database as of January 2014. The long-run research ranking data running from 2003 to 2013 are utilized to identify the research success of Turkish economists working at universities and institutions all over the world.
    Keywords: Research Ranking, Economics, Turkey, World
    JEL: A1 A2 F0
    Date: 2014
  3. By: Ahmet Faruk Aysan; Salih Fendoglu; Mustafa Kilinc
    Abstract: This paper investigates the effectiveness of macroprudential policies introduced by Turkey in late 2010. The unprecedented quantitative easing policies of advanced countries after the global financial crisis have presented serious financial stability concerns for most emerging countries including Turkey. To cope with these challenges, Turkey has devised new policy tools such as asymmetric interest rate corridor and reserve option mechanism. From the perspective of capital flows, the interest rate corridor works mainly through stabilizing supply of foreign funds, and the reserve option mechanism through decreasing the sensitivity of equilibrium exchange rate to shifts in the demand for foreign funds. Using a large panel of 46 countries and employing Bruno and Shin (2013a,b)’s methodology, we investigate whether the new policy framework in Turkey has been successful in cushioning the economy from volatile cross-border capital flows from a comparative perspective. The results show that, after controlling for a set of domestic and external variables and relative to a group of advanced and emerging countries, cross-border capital flows to Turkey have been less sensitive to global factors after the implementation of macroprudential policies.
    Keywords: Capital Flows, Macroprudential Policies
    JEL: E58 F32 F34
    Date: 2014
  4. By: Thomas Masterson; Emel Memis; Ajit Zacharias
    Abstract: The Levy Institute Measure of Time and Consumption Poverty (LIMTCP) is a two-dimensional measure that takes into account both the necessary consumption expenditures and the household production time needed to achieve a minimum standard of living -- factors often ignored in official poverty measures. In the case of Turkey, application of the LIMTCP reveals an additional 7.6 million people living in poverty, resulting in a poverty rate that is a full 10 percentage points higher than the official rate of 30 percent.
    Date: 2014–02
  5. By: Ali T. Akarca (Department of Economics, University of Illinois at Chicago); Aysit Tansel (Department of Economics, METU)
    Abstract: During last sixty years, Turkish population moved from one province to another at the rate of about 7-8 percent per five-year interval. As a consequence of this massive internal migration, population residing in a province other than the one they were born in increased from 12 percent in 1950 to 39 percent in 2011. Impact of this population instability on provincial turnout rates in 2011 parliamentary election is studied, controlling for the effects of other socio-economic, demographic, political and institutional factors. Consequences of migration both at destinations and origins are considered. According to robust regressions estimated, the relationship between turnout and education is inverse U-shaped, and between turnout and age, U-shaped. The latter reflects generational differences as well. Large population, large number parliament members to be elected from a constituency, participation by large number of parties, and existence of a dominant party depress the turnout rate. A percentage increase in the proportion of emigrants among the people born in a province reduces turnout rate in that province by 0.13 percentage points, while a percentage increase in the ratio of immigrants in the population of a province reduces it by 0.06 percentage points. However, at destinations where large numbers of immigrants from different regions are concentrated, the opportunity afforded to immigrants to elect one of their own, reduces the latter adverse impact significantly and in some cases turns it to positive.
    Keywords: election turnout, internal migration, political participation, Turkey, voter behavior.
    JEL: D72 J61
    Date: 2014–03
  6. By: Claudia Diehl; Elisabeth Liebau
    Abstract: By applying event-history analysis to all available waves of the German Socio-Economic Panel, we analyze how remigration intentions and actual remigration of Turkish migrants to Germany have evolved over time. The study draws from a broad set of theoretical approaches to remigration and it takes a different focus than previous studies by concentrating on long-term change in these rates. Our findings reveal an increase in remigration intentions and rates for first generation migrants after the turn of the millennium. Those who plan to return have a stronger emotional attachment to Turkey than those who plan to stay. Nevertheless, the two groups differ neither with respect to their educational levels nor in terms of their identification with Germany and perceptions of discrimination. Similarly, the small though slightly increasing group of immigrants that actually returns does not have a clear profile in terms of educational level, national identification, and perceptions of being disadvantaged in Germany. We thus argue that for first-generation migrants from Turkey after 2001, rising remigration intentions and actual remigration are unrelated to their integration into German society. Rather, the increase seems to be triggered by macro-structural changes in the country of origin.
    Date: 2014
  7. By: Ahmet Faruk Aysan; Salih Fendoglu; Mustafa Kilinc
    Abstract: During the global financial crisis of 2008-2009, both advanced and emerging countries have implemented significant easing policies on monetary and fiscal fronts. Yet, the recovery, especially in advanced countries, was not as quick or strong as expected. These quantitative easing policies, coupled with weak recovery and restricted fiscal positions, have created not only abundant but also excessively volatile global liquidity conditions, leading to short-term and excessively volatile capital flows to emerging markets. To contain potential risks due to such flows, emerging countries have augmented their existing policy frameworks. Central Bank of the Republic of Turkey (CBRT), for example, has introduced two new policy tools in its new monetary policy framework: the asymmetric interest rate corridor and the reserve option mechanism. From a capital flows perspective, the interest rate corridor helps smooth fluctuations in supply of foreign funds, whereas the reserve option mechanism helps contain movements in demand for foreign funds. Both policies have been actively used by the CBRT and appeared to be effective in containing financial stability risks stemming from excessively volatile capital flows.
    Keywords: Capital flows, macroprudential policies, central banking
    JEL: E44 E52 E58
    Date: 2014
  8. By: Carolina V. Zuccotti (European University Institute); Harry Ganzeboom (Vrije Universiteit Amsterdam); Ayse Guveli (University of Essex)
    Abstract: Research on educational and occupational achievement of immigrants in Europe has mainly followed an assimilationist approach, focused on comparisons with natives or other immigrant groups (see for example Heath & Cheung 2007). However, this may not be at all the perspective that migrants themselves find most relevant, if we assume that people move to improve their life chances relative to what they would have been in the origin society without migrating. Following this argument, the paper studies social mobility and status attainment among Turkish migrants and their descendants in nine Western European countries in comparison with Turks in Turkey (and native populations in Western Europe). The emphasis is therefore on the origins, through a twofold perspective: with respect to parents and with respect to non-migrants in Turkey. This way, the widely used approach of 'ethnic penalties' (also included in the analysis) is complemented with a focus on the benefits (and limitations) of migrating, not only in terms of average achievements with respect to those left behind, but also in terms of the possibilities that migration opens for social mobility processes. The study is based on a combined dataset from the European Social Survey (2002-2010) and the European Values Study (2008). Among the main findings, the paper shows that 'ethnic penalties' in terms of occupational status have been declining between the generations, as more Turks in Western Europe have been educated in the destination country. However, the comparison with Turks in Turkey shows that migration has not favoured immigrants on all accounts. While second generation Turks are on average less dependent on their parental background than Turks in Turkey, and those with lower class backgrounds (which comprises most of cases) are indeed better able to move relative to their parents in terms of education, they continue to be disadvantaged in terms of the occupations they get. This is due to the fact that in Turkey the same education leads to a higher occupational status, which makes the occupational 'gains' that second generation Turks obtain in Western Europe (on average) transform into lags with respect to those left behind. These lags also seem to be particularly pronounced for higher educated women.
    Keywords: Turkish migrants; first generation; second generation; Turks in Turkey; social mobility; status attainment
    JEL: J15
    Date: 2014–03–04
  9. By: Lauridsen, Jørgen T. (Department of Business and Economics); Zeren, Fatma (Inonu University); Ari, Ayse (Istanbul University)
    Abstract: The study investigates whether crime in Turkey is governed by economic rationality. An economic model of rational behaviour claims that the propensity to commit criminal activities is negatively related to risk of deterrence. Potential presence of higher risk profiles for certain population segments is investigated. Panel data aggregated to sub-regional levels and observed annually for the years 2008 to 2010 are applied. Controls for endogeneity among criminal activity level and risk of deterrence, intra-regional correlation, inter-temporal heterogeneity and spatial spillover are exerted. A positive effect of risk of deterrence on criminal activity is found which conflicts with the hypothesised economic rationality. Certain population segments are identified as obvious target groups for regional policy initiatives aiming to reduce criminal activities. These are in particular unemployed and males. On the other hand, educational attainment, poverty and youngsters are less obvious target groups, while the relationship between population density and crime is ambiguous. Finally, spatial spillover patters related to criminal activities seem to be highly relevant, thus implying that while initiatives toward criminal activities may well be formed at the regional level, coordination across regions might obviously be called for.
    Keywords: Crime; risk of deterrence; Turkey; panel data; spatial spillover
    JEL: C21 C23 K42
    Date: 2014–03–03
  10. By: Hande Kucuk; Pinar Ozlu; Anil Talasli; Deren Unalmis; Canan Yuksel
    Abstract: Recently, massive global liquidity has compelled many emerging market economies to change their monetary policy frameworks in order to address the financial stability challenges posed by volatile capital flows. In this respect, as of the second half of 2010, the Central Bank of the Republic of Turkey (CBRT) has developed additional policy instruments to support the adoption of financial stability as a complementary objective to price stability. Liquidity management has actively been used in conjunction with a wide interest rate corridor to smooth excessive volatility in shortterm capital inflows. As a result, the spread between the Borsa Istanbul overnight repo interest rate and the CBRT average funding rate (overnight spread) has become wider and more volatile. We analyze the determinants of the overnight spread using data from both the traditional and the new monetary policy episodes and empirically document that this spread has recently been influenced by various factors which are directly or closely related to the liquidity policy of the CBRT.
    Keywords: Overnight interest rate; liquidity policy; monetary policy; operational framework
    JEL: E43 E52 C22
    Date: 2014
  11. By: Miftah, Amal; Bouoiyour, Jamal
    Abstract: This article attempts to assess empirically the impact of remittances on household expenditure and relative poverty in Morocco. We apply propensity score matching methods to the 2006/2007 Moroccan Living Standards Measurement Survey. We find that migrants’ remittances can improve living standards among Moroccan households and affect negatively the incidence of poverty. The results show a statistically significant and positive impact of hose remittances on recipient households’ expenditures. They are also significantly associated with a decline in the probability of being in poverty for rural households; it decreases by 11.3 percentage points. In comparison, this probability decreases by 3 points in urban area.
    Keywords: Poverty; Remittances; propensity score matching; Morocco;
    JEL: F24 I32 O15 O55
    Date: 2014–02
  12. By: Guizani, Brahim
    Abstract: This paper represents a contribution to the still meager literature on the impact of prudential regulation bank behavior in Tunisia. It aims to examine the effect of the capital requirements on bank credits during the period from 1999 through 2010 and to assess the effectiveness of the banking supervision policy in containing banking system’s risk. For this purpose a dynamic model is built and then an empirical regression is estimated. The results shows that regulatory capital framework has been binding bank lending in Tunisia during the period of study; well-capitalized banks have lent more than less-capitalized ones. Despite the apparent stringency of the bank regulator in Tunisia, banking supervision has been weakly effective in restraining banks’ overall risk. Further strengthening of the banking supervision policy is still needed on the part of the central bank of Tunisia; i.e., the bank regulator.
    Keywords: capital requirements, Basel Accords, dynamic model, banking supervision, non-performing loans.
    JEL: C63 D92 G21 G28
    Date: 2014–03–08
  13. By: durongkaveroj, wannaphong
    Abstract: The purpose of this study was to present an application of SAM multiplier to Total Poverty Gap using simulation and speculation method. Also, an appropriate trade policy was derived in each region aimed at reducing poverty. The results revealed that income level and exogenous macroeconomic shock were an important factor in getting the poor out of destitution. Moreover, to reduce poverty, meat sector should be strongly supported to be exported commodity in North America, Latin America, and EU25. Additionally, processed food sector should be encouraged in Oceania, Southeast Asia, and South Asia. Light manufacturing products should be promoted in East Asia and Sub-Saharan Africa. And Middle East and North Africa can reduce its poverty through an increase in heavy manufacturing sector
    Keywords: sam multiplier, multiplier, poverty, total poverty gap
    JEL: C6 C67 C68 D31 I32 O15 O24 O5 O57
    Date: 2014–02–27
  14. By: Verme, Paolo; Barry, Abdoul Gadiry; Guennouni, Jamal; Taamouti, Mohamed
    Abstract: During the past 20 years, Morocco has implemented a wide range of macroeconomic, social, and labor market reforms that have delivered in terms of growth of gross domestic product and household welfare. Yet, these positive developments are not reflected by the main labor market indicators, a phenomenon observed elsewhere in developed and developing economies alike and labeled as"jobless growth."For the first time for Morocco, this paper uses quarterly panel data to investigate the question of labor mobility in an effort to determine whether people have moved to better sectors and jobs. The results point to significant labor mobility between labor statuses with quite distinct features across population groups. All groups experience some form of labor market mobility every quarter and women are as mobile as men. However, the transitions that women experience are very different from the transitions than men experience and women's performance is worse than men’s performance in almost all aspects of labor mobility.
    Keywords: Labor Markets,Population Policies,Labor Policies,Housing&Human Habitats,Markets and Market Access
    Date: 2014–03–01
  15. By: Xiaoying Liu, Mare Sarr and Timothy Swanson
    Abstract: We examine the effect of the introduction of uniform water-charging for aquifer management and provide evidence using a survey-based choice experiment of agricultural water users in rural Tunisia. Theoretically, we show that the implementation of the proposed second-best regulation would result both in efficiency gains and in distributional effects in favour of small landholders. Empirically, we find that resistance to the introduction of an effective water-charging regime is greatest amongst the largest landholders. Resistance to the regulation of common resources may be sourced in the manner in which heterogeneity might determine the distributional impact of different management regimes.
    Keywords: Resistance, Regulation, Common Resources, Tunisia
    Date: 2014
  16. By: Sami Debbichi (AEDD, Faculty of Economics and Management of Tunis el Manar, Tunisia); Walid Hichri (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)
    Abstract: We try in this paper to characterize the state of mobile phone market in Tunisia. Our study is based on a survey of foreign experience (Europe) in detecting collusive behavior and a comparison of the critical threshold of collusion between operators in developing countries like Tunisia. The market power is estimated based on the work of Parker Roller (1997) and the assumption of "Balanced Calling Pattern". We use then the model of Friedman (1971) to compare the critical threshold of collusion. We show that the “conduct parameter” measuring the intensity of competition is not null during the period 1993-2011. Results show also that collusion is easier on the Tunisian market that on the Algerian, Jordanian, or Moroccan one.
    Keywords: Termination rate, Market power, Competition, Mobile phone Market
    JEL: D41 L96 L71
    Date: 2014
  17. By: Haouas, Ilham (Abu Dhabi University); Heshmati, Almas (Sogang University)
    Abstract: Recent research conclude that the GCC economies have failed to address the oil curse. They are far behind other countries, especially those in the G7, which possess huge reserves of oil wealth but have undertaken economic diversification to correct the ill-effects of an oil curse. This paper takes an in-depth look into the UAE economy as a model but also as a reminder of the struggles ahead. The findings support the fact that the UAE is facing an oil curse. Declining levels of total factor productivity, GDP volatility, negative returns on investment, and a labor force that is too reliant on government's supply of jobs are among the many reasons that support the thesis. The UAE has made good progress in recent years to diversify its economy. However, the drivers of economic growth in the UAE are vulnerable to external shocks outside of the Emirate's control. It is now critical that the UAE take steps to mitigate economic disruptions that might result from these shocks. In this case study the UAE economic performance is examined, and a data-driven roadmap for sustainable growth is suggested. The analysis shows that greater efforts are needed to stimulate the diversification of the production base by encouraging increased domestic, especially private, investment. Well-targeted policies should be adopted to accelerate reform and facilitate the involvement of the private sector in the economy.
    Keywords: growth accounting, TFP, oil curse, economic diversification, UAE
    JEL: C22 E20 L16 L71 O11 O53
    Date: 2014–02
  18. By: Erol Taymaz (METU); Ebru Voyvoda (METU); Kamil Yilmaz (Koc University)
    Abstract: Turkiye, 1980 askeri darbesiyle ara verilen demokrasiye yedi yil sonra yapilan serbest secimlerle geri dondu. Bu makalede, Turkiye imalat sanayiinde reel ucretler ve isyeri duzeyinde emek ve toplam faktor verimliliginin 1987’de demokrasiye gecis sonrasindaki hareketleri incelenmektedir. 1988’den 1993’e imalat sanayiinde ortalama reel ucretler %120 artti. Yine ayni donemde toplam faktor ve emek verimliliginde daha once rastlanmayan duzeyde artislar gerceklesti. O donemdeki siyasi ve ekonomik gelismeleri yakindan izleyen iktisatcilar olarak, bu gozlemlerden yola cikarak reel ucret artislarinin rekabet guclerini kaybetmek istemeyen sirketleri, emek ve toplam faktor verimliligini artirmaya zorladigi hipotezini test ediyoruz. Isyeri duzeyinde zaman serilerini kullanarak yaptigimiz Granger nedensellik testleri, nedenselligin reel ucretlerden verimlilige dogru oldugunu ortaya koymaktadir. Bu bulgular, Turkiye’nin yani sira 1980’lerin sonunda demokrasiye gecis surecini sorunsuz bir sekilde gerceklestiren G. Kore, Sili ve Tayvan gibi ulkelerde gecis doneminde yasanan hizli verimlilik artislarini da dolayli olarak aciklamakta, “demokrasiler daha yuksek ucret oderler” hipotezini (Rodrik, 1999) desteklemektedir.
    Keywords: Demokratik gecis, Sendikalar ve grevler, Reel ucretler, Toplam faktor verimliligi, Emek verimliligi, Uzun-vadeli buyume.
    Date: 2014–03

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