nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒09‒29
eight papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Turkish Middle Income Trap and Less Skilled Human Capital By Gokhan Yilmaz
  3. Inequality of Educational Opportunities in Egypt By Lire Ersado; Jérémie Gignoux
  4. Tunisia Urban Development and Local Governance Program : Fiduciary Systems Assessment Report By World Bank
  5. Corporate Social Responsibility supporting SMEs: Lessons Learned from Egypt By Dina el Kayaly
  6. More Jobs, Better Jobs : A Priority for Egypt By World Bank Group
  7. Firm-Size Wage Gaps along the Formal-Informal Divide : Theory and Evidence By Binnur Balkan; Semih Tumen
  8. "Public Preferences for Redistributive Policies in Israel" By Yuval Elmelech

  1. By: Gokhan Yilmaz
    Abstract: This paper reviews the literature on the Middle Income Trap and compares Turkey to the rest of the trapped and non-trapped (non-middle income trapped) countries. We analyze country experiences by focusing on the role of well-designed and high quality education system to avoid the trap. When we compare Turkey’s human capital to human capital in non-trapped countries, we observe that Turkish education system will be critical to break out the trap. An education system that is consistent with development path of the economy could yield both “skilled and high capability human capital” and “innovative and competitive productive capacity” to overcome the trap. Our qualitative analysis also demonstrates that Turkey has not been benefitting from de-agriculturalization sufficiently. Surplus labor coming from agriculture is not being employed in the knowledge intensive manufacturing activities. Moreover, the speed of de-agriculturalization is slow, hence Turkey can’t fully exploit unrepeatable gains of structural transformation. Transferring these agriculture workers into high productivity tradable activities can yield significant labor productivity and per capita income gains.
    Keywords: Economic Growth, Convergence, Middle Income Trap
    JEL: O11 O40
    Date: 2014
  2. By: Dudu, Hasan; Cakmak, Erol H
    Abstract: This paper analyses the effects of climate change and trade liberalization on Turkish Economy between 2008 and 2099 by using a recursive dynamic CGE model. Results of a crop-irrigation requirement model are used to generate climate change shocks. The results suggest that the effects of climate change will be effective especially after 2030s with acceleration after 2060s. GDP loss gets as high as 3.5 percent. Main drivers of the loss in GDP are the significant decline in private consumption and up to two percent increase in imports. A trade liberalization scenario where tariffs on imports from EU are eliminated unilaterally by Turkey is also simulated to investigate the interaction between climate change and trade liberalization. Trade policy alleviates the negative effects of climate change only marginally for Turkey, as suggested by the literature for many other regions in the world. Trade liberalization with EU causes a trade diversion effect and decreases imports from other trading regions. The main adjustment mechanism of the economy under trade liberalization works through the substitution of factors for intermediate goods, imported consumption goods and intermediate inputs for domestic goods. Maize, oilseeds, fruits and processed food benefit from trade liberalization while production of other crops generally decline.
    Keywords: Climate Change, Trade Liberalization, Agriculture, Computable General Equilibrium, Turkey, Environmental Economics and Policy, Land Economics/Use, Research Methods/ Statistical Methods, C68, Q54, Q17,
    Date: 2014
  3. By: Lire Ersado (The World Bank - The World Bank); Jérémie Gignoux (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper documents inequalities in access to education and educational achievements at basic and secondary education levels in Egypt. Examination of three cohorts suggests that, although basic education has democratized, some inequities in access to general secondary and college education have persisted over the past two decades. The analysis of test-scores from TIMSS and national examinations over time shows that more than a quarter of learning outcome inequality is attributable to circumstances beyond the control of a student, such as socioeconomic background and birthplace. The high level of overall achievement inequality observed makes inequities in learning opportunities between Egyptian youth high compared to other countries in absolute levels. Moreover learning gaps among pupils from different backgrounds appear at early grades. High and unequal levels of expenditures in private tutoring and tracking into vocational and general secondary schools that depends on a high stakes examination substantially contribute to unequal learning outcomes.
    Keywords: Educational inequality ; Educational achievement ; Inequality of opportunity ; Tracking ; Private tutoring ; Egypt
    Date: 2014–09
  4. By: World Bank
    Keywords: Public Sector Corruption and Anticorruption Measures Banks and Banking Reform Finance and Financial Sector Development - Debt Markets Public Sector Economics Governance - National Governance Public Sector Development
    Date: 2014–06
  5. By: Dina el Kayaly (Penn State University)
    Abstract: Importance of the topic Corporate Social Responsibility (CSR) gained momentum in Egypt during the past decade, yet its impact seemed to be limited. This study provides a closer look on why and how is CSR practiced in Egypt, the challenges encountered, and possible improvement of CSR practices. The study presents a set of recommendations for using CSR as a catalyst of development in an emerging market. The objective of the article There is a fundamental gap between Western CSR theory and practice, and what is essentially happening in Egypt. CSR in Egypt is perceived as a long-standing charitable voluntary practice based on religious beliefs. Modern corporate concept of CSR was a spillover of Multinational Enterprises (MNEs) in Egypt in the beginning of the millennium. The purpose of this research is to identify the CSR dynamics that can help in development in an emerging market such as Egypt. Methodology To serve the purpose of this study a series of qualitative, semi-structured in-depth interviews were conducted with ten members of the CSR community in Egypt. Findings The interviews revealed several weaknesses in the current practice such as the lack of CSR vision, the lack of a CSR partnership model with SMEs, and that CSR is being used primarily as a Marketing Public Relations (MPR) tool. Practical Implications The researcher concluded with a series of recommendations suggested by interviewees proposing better cooperation between different stakeholders, and investing less in charitable activities, and more in development programs for the Egyptian emerging market. By giving importance to the development of SMEs, the effective partnership between big and SMEs companies regarding the CSR programs become very crucial too emerging Egypt. Social Implications An in-depth understanding of the CSR practices and gleaning insights will help policy makers in promoting sustainable practices by integrating social and environmental activities as well as economic aspects.
    Keywords: CSR community; CSR practices; competiveness, emerging markets
    Date: 2014–09
  6. By: World Bank Group
    Keywords: Finance and Financial Sector Development - Access to Finance Health, Nutrition and Population - Population Policies Economic Theory and Research Social Protections and Labor - Labor Policies Social Protections and Labor - Labor Markets Macroeconomics and Economic Growth
    Date: 2014–06
  7. By: Binnur Balkan; Semih Tumen
    Abstract: Observationally equivalent workers are paid higher wages in larger firms. This fact is often named as the “firm-size wage gap” and is regarded as a key empirical puzzle. Using micro-level data from Turkey, we document a new stylized fact : the firm-size wage gap is more pronounced for informal (unregistered) jobs than for formal (registered) jobs. To explain this fact, we develop a two-stage wage-posting game with market imperfections and segmented markets, the solution to which produces wages as a function of firm size in a well-defined subgame-perfect equilibrium. The model proposes two explanations. First, taxes on formal employment generate a wedge between formal and informal size wage gaps. Thus, government policy can potentially affect the magnitude of the firm-size wage gaps. The second explanation features a market-based framework with strategic interactions. Relative to small firms, large firms typically post higher wages for both formal and informal jobs they open. A high-wage formal job attracts a larger pool of applicants than a high-wage informal job. The larger pool of applicants for the formal job, in turn, allows the firm to somewhat lower the initial wage offer, while this second-round effect is negligible for informal jobs. As a result, size differentials are lower in formal jobs than informal jobs. We argue that the observed patterns in the use of social connections in job search and heterogeneity in job preferences can be used to justify the validity of this second mechanism.
    Keywords: Firm size, Wage gap, Informal job, Wage posting, Subgame perfection, Taxes, Social networks
    JEL: C78 J21 J31 L11
    Date: 2014
  8. By: Yuval Elmelech
    Abstract: This paper contributes to the literature on inequality and welfare policy by studying public support for redistributive policies in Israel, a society with an extreme level of socioeconomic inequality. Drawing on the relevant literature and taking into consideration the distinct demographic makeup of contemporary Israeli society, the study aims to describe public support for opportunity-enhancing and outcome-based redistributive policies and to explore the extent to which individual economic and demographic characteristics are associated with policy preferences. Analysis of data from a unique topical module of the 2008 Israel Social Survey reveals that support for opportunity-based programs is strong overall, but that the Israeli public is deeply divided along ethnic lines, religious affiliation, and immigration status. While results from multinomial regression analyses provide support for the self-interest theory, the findings also underscore the significance of various demographic and social indicators as determinants of policy preferences. These findings are discussed in light of the current debates on the sources of, and possible remedies for, the growing social and economic polarization within Israeli society.
    Keywords: Israel; Public Opinion; Redistributive Policies; Social Policy Preferences
    JEL: D63 H59
    Date: 2014–09

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