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on MENA - Middle East and North Africa |
| By: | Leyla Mocan (Federal Reserve Board of Governors) |
| Abstract: | In 1997 Turkey passed a law making middle school completion compulsory, increasing the mandatory education from 5 to 8 years. At the time of this policy change, only 3-in-5 students were completing middle school in Turkey. In this paper, I employ data from the 2011 and 2012 Turkish Household Labor Force Survey to investigate the effect of this law on educational attainment, the impact of the increase in education on wages, and to explore how this varied across individuals. The results indicate that the fraction of children completing middle school increased more than 20 percentage points as a result of this reform. The effects were especially pronounced for girls (particularly those living in rural areas): I estimate that as a result of the reform, an additional half a million girls attained a middle school diploma. There are also considerable spillover effects into high school completion rates. Despite the large policy-induced increase in educational attainment, I find little evidence of a corresponding increase in labor force participation or full-time work. The results suggest large wage gains of about 14 percent per year of schooling, with these benefits concentrated among females. Taken together, the findings demonstrate that the policy change induced a dramatic change in educational attainment among the youth of this predominantly Muslim developing country, but that the economic benefits of the change were limited to women. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1424&r=ara |
| By: | Fulya Memisoglu |
| Abstract: | Turkey, at the crossroads of Europe, Middle East and Asia, has confronted with mounting pressures of mixed migration flows in recent decades. This paper aims to explore Turkey’s contemporary approach to migration management by focusing on the adoption of the country’s first comprehensive immigration law (Law on Foreigners and International Protection) and the signing of the readmission agreement with the European Union in 2013. This incorporates an analysis of both policy continuities and changes in migration management in Turkey, while also providing an understanding of the interplay between internal and external factors, namely internationalisation and Europeanisation processes and the responsiveness of domestic actors to such pressures. The paper argues that migration policies driven solely by state-centric concerns are becoming increasingly inefficient in responding to the challenges caused by interlinked pressures of globalisation and multi-layered migratory flows. As Turkey’s role as a transit and receiving country grows, issues of international migration, and irregular migration in particular, are becoming dynamic topics in defining its role in a globalised world and as well as the trajectory of its relations with the EU. |
| Keywords: | Turkey; Europeanization |
| Date: | 2014–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0419&r=ara |
| By: | Ucal, Meltem; Bilgin, Mehmet Hüseyin; Haug, Alfred A. |
| Abstract: | This paper explores how foreign direct investment (FDI) and other determinants impact income inequality in Turkey in the short- and long-run. We apply the ARDL (Auto-Regressive Distributed Lag) modelling approach, which is suitable for small samples. The data for the study cover the years from 1970 to 2008. The empirical results indicate the existence of a cointegration relationship among the variables. The positive impact of the FDI growth rate on income inequality, worsening inequality, is shown to be significant in the short-run, though at the 10% significance level only and with a quantitatively small impact, and insignificant in the long-run. In other words, FDI increases income inequality initially somewhat but this effect disappears in the long run. The literacy rate clearly reduces inequality in the long run, but also in the short run. On the other hand, population growth worsens inequality in the long run, and the effect is quite large, though it has no statistically significant effect on inequality in the short run. Also, an increase in GDP growth reduces inequality especially in the short run (at a 5% level of significance) but also in the long run (though only at the 10% level). |
| Keywords: | Income inequality, foreign direct investment, ARDL estimation, FM-OLS estimation, Turkey |
| JEL: | C13 C32 D31 F21 |
| Date: | 2014–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61104&r=ara |
| By: | Akarçay- Gürbüz, Ayça; Polat, Sezgin |
| Abstract: | We evaluate public-private sector wage differentials in Turkey for the years 2005 and 2011, a period marked by educational upgrading and restructuring in public employment. Using micro data from Household Labour Force Surveys we find a positive premium for low wage earners and a penalty of working in the public sector at the higher end of the distribution. Although the penalty has not disappeared, the price effect has increased, especially at the end of the distribution owing to a relatively uneven wage increase in the private sector along the distribution, rather than an explicit public wage policy. |
| Keywords: | employment; wage differentials; decomposition; quantile regression |
| JEL: | C31 J31 J45 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60872&r=ara |
| By: | Breisinger, Clemens; Ecker, Olivier; Maystadt, Jean-François; Trinh Tan, Jean-François; Al-Riffai, Perrihan; Bouzar, Khalida; Sma, Abdelkarim; Abdelgadir, Mohamed |
| Abstract: | This Food Policy Report explains why there is a need to place even higher priority on food security-related policies and programs in conflict-prone countries, and offers insights for policymakers regarding how to do so. To understand the relationship between conflict and food security, this report builds a new conceptual framework of food security and applies it to four case studies on Egypt, Somalia, Sudan, and Yemen. It argues that food security-related policies and programs build resilience to conflict insofar as they are expected not only to help countries and people cope with and recover from conflict but also to contribute to preventing conflicts and support economic development more broadly: by helping countries and people become even better off. |
| Keywords: | food security, Conflict, Economic development, Prices, Natural disasters, subsidies, Poverty, Climate change, Insurance, Governance, Institutions, Nutrition, malnutrition; EGYPT, YEMEN, SOMALIA, SUDAN, NORTH AFRICA, MIDDLE EAST, ARAB COUNTRIES, EAST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:fprepo:9780896295667&r=ara |
| By: | Celbis M.G.; Crombrugghe D.P.I. de (UNU-MERIT) |
| Abstract: | This study presents novel evidence regarding the role of regional internet infrastructure in reducing regional per capita income disparities. We base our study on the assumptions that 1 the diffusion of information homogenizes regional economies through reducing the dissimilarities in institutions and culture, and 2 the telecommunication capacity, represented as the internet infrastructure of a region, facilitates this flow of information. Using the data from the 26 statistical regions of Turkey, we find evidence that internet infrastructure has contributed to regional convergence during the period 1999-2011. We also observe that the Turkish economic geography is defined by a strong core-periphery pattern and significant spatial clustering. |
| Keywords: | Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data); Public Goods; Telecommunications; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure; Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence; Size and Spatial Distributions of Regional Economic Activity; |
| JEL: | R12 L96 E20 H41 O18 O47 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014078&r=ara |
| By: | Eric ROUGIER |
| Abstract: | In this paper, we argue that the Arab spring can be understood as a violent criticism of and attack against the post-Independence social contract that prevailed in most Middle East and North African countries. We show that this social contract, characterized by the combination of high levels of redistribution and low political accountability and social inclusiveness may well explain (1) the slow pace of structural change relative to the rest of the world and (2) the specific political economy that have triggered social discontent among the young, and broad cohorts of educated workers, and eventually thrown populations onto the streets. More specifically, it is shown that authoritarianism reduces the positive effect of redistribution on structural change, with this adverse effect being even larger when the likely endogeneity of the social contract to the export structure is controlled for. We also describe the specific political economy that was conducive to the low democracy-low diversification equilibrium featured by most Arab economies. |
| Keywords: | Social contract, redistribution, authoritarianism, structural change, export diversification, export sophistication, political economy, Middle East and North Africa, inequality of opportunities |
| JEL: | I38 O14 O43 P16 P48 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2014-22&r=ara |
| By: | Maria A Albino-War; Svetlana Cerovic; Francesco Grigoli; Juan Flores; Javier Kapsoli; Haonan Qu; Yahia Said; Bahrom Shukurov; Martin Sommer; SeokHyun Yoon |
| Abstract: | Over the past decade, rising oil prices have translated into high levels of public investment in most MENA and CCA oil exporters. This has prompted questions about the efficiency of public investment in generating growth and closing infrastructure gaps, as well as concerns about fiscal vulnerabilities. When public investment is inefficient, higher levels of spending may simply lead to larger budget deficits, without sufficiency increasing the quantity or quality of public infrastructure in support of economic growth. This paper examines the efficiency of public investment in the MENA and CCA oil exporters using several techniques, including a novel application of the efficiency frontier analysis, estimates of unit investment costs, and assessments of public investment processes. The analysis confirms that these oil exporters have substantial room to improve public investment efficiency. Reforms in the public financial and investment management systems are needed to achieve this objective. |
| Keywords: | Public investment;Middle East and Central Asia;North Africa;Central Asia and the Caucasus;Expenditure efficiency;Infrastructure;Transportation;Oil exporting countries;Public investment efficiency, natural resources, oil exporters, resource wealth management |
| Date: | 2014–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfsdn:14/10&r=ara |
| By: | Alotaibi, Abdullah R; Mishra, Anil V |
| Abstract: | This paper examines the effects of return spillovers from regional (Saudi Arabia) and global (US) markets to GCC stock markets (Bahrain, Oman, Kuwait, Qatar, United Arab Emirates). The paper develops various bivariate GARCH models for regional and global returns: BEKK, constant correlation and dynamic correlation. The specification tests are used to choose between the models with and without asymmetric effects. The estimated innovations for the regional and global returns are then used as input for the univariate volatility spillover model which allows the unexpected returns of any particular GCC stock market be driven by three sources of shocks: local, regional from Saudi Arabia and global from US. We find significant return spillover effects from Saudi Arabia and US to GCC markets. Trade, turnover and institutional quality has significant impacts on regional volatility spillovers from Saudi Arabia to GCC markets. There are macroeconomic policy implications associated with the strengthening of intra-regional and cross-border trade in goods, services and assets and regulatory framework. |
| Keywords: | Volatility spillovers; GCC stock markets; GARCH; BEKK; CCC; DCC |
| JEL: | F3 |
| Date: | 2015–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61101&r=ara |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Keywords: | Fiscal policy;Public investment;Private sector;Employment;Islamic banking;Shadow economy;Macroprudential Policy;Selected Issues Papers;Kuwait; |
| Date: | 2014–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/334&r=ara |
| By: | Driouchi, Ahmed; Achehboune, Amale; Gamar, Alae |
| Abstract: | Abstract: This paper attempts to reveal the intangible components of wealth that need to be considered for further economic and social policies in Morocco. This objective is achieved through selecting secondary time series data and international indices and regressing the residual intangible wealth as measured by the World Bank method, on different components that are likely to be tested as genuine wealth indicators for Morocco. The attained results are not different from those revealed in previous publications. Governance, Intellectual capital besides Safety and Peace in addition to some cultural features appear to be the main components of the intangible wealth in Morocco. They consequently constitute new directions for economic policy improvements. |
| Keywords: | Keywords: Intangible capital, regression analysis, wealth intangible components. |
| JEL: | E21 E22 O11 Q57 |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60904&r=ara |
| By: | International Monetary Fund. European Dept. |
| Abstract: | KEY ISSUES Context: Turkey’s economy has grown on average by 6 percent annually since 2010, but this has come at the expense of a persistently large external deficit making the economy sensitive to changes in external financing conditions. Inflation is high and above the authorities’ target, and real policy interest rates remain negative. The exchange rate continues to be stronger than suggested by fundamentals. Challenges: Policies should focus on rebalancing the economy, reducing the external deficit—by boosting savings rather than decreasing investment—and lowering inflation to preserve competitiveness. Over the medium term, implementation of the ambitious structural reform agenda is critical to raising potential growth. Key policy recommendations: • Fiscal policy should be tighter, raising domestic savings by increasing the primary surplus by 2 percent of GDP by 2017. • Renewing the focus of monetary policy on the inflation target, by setting and sustaining a positive real policy interest rate. • Expanding the (macro)prudential toolkit to contain risks to financial stability, in particular the banking system’s wholesale external foreign exchange funding. Traction of past Fund advice: The authorities and staff agree that the external imbalance should be reduced, and that this should be done while preserving investment. They also concur that lowering inflation is a key objective. Moreover, to preserve financial stability, the authorities introduced well-targeted macroprudential measures to slow the rise in household leverage and encourage banks to increase core funding. They plan to tackle structural issues through the 10th Development Plan. However, the authorities believe risks are lower than what staff believes and that the economy has enough buffers to withstand reasonable shocks. Thus fiscal and monetary policies would remain more accommodative than recommended by staff. |
| Keywords: | Article IV consultation reports;Economic growth;Capital inflows;Fiscal risk;Fiscal policy;Debt sustainability;Monetary policy;Banking sector;Macroprudential Policy;Economic indicators;Staff Reports;Press releases;Turkey; |
| Date: | 2014–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/329&r=ara |
| By: | Resul Cesur; Bahadir Dursun; Naci Mocan |
| Abstract: | Although the impact of education on health is important for economic policy in developing countries, the overwhelming majority of research to identify the health returns to education has been done using data from developed countries. We use data from three waves of a nationally-representative health survey, conducted between 2008 and 2012 in Turkey, and exploit an education reform that increased the mandatory years of schooling from 5 to 8 years in 1997. Using exposure to the reform as an instrument for education, we find that for women ages 18-30, education has no impact on self-reported health, BMI, overweight, obesity, or on the propensity or intensity of smoking. Education does not influence women’s daily consumption of fruits, vegetables, or their propensity to get a flu shot either. The same results are obtained for men of the same age group with one exception: education increases men’s BMI and the propensity to be overweight and obese. Potential explanations for these findings are provided. |
| JEL: | I1 I12 I15 I21 I25 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20764&r=ara |
| By: | AfDB AfDB |
| Date: | 2014–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2150&r=ara |
| By: | AfDB AfDB |
| Date: | 2014–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2149&r=ara |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Abstract: | Conclusions * Algeria will need to undertake significant and consistent fiscal consolidation to restore fiscal sustainability. In the wake of the crisis, Algeria expanded wages, subsidies, and transfers in an effort to address social demands. At the same time, revenues declined as a result of slumping hydrocarbon exports. Five consecutive years of fiscal deficits, combined with declining hydrocarbon exports and a relatively short time horizon for hydrocarbon resources, have placed fiscal policy on an unsustainable trajectory that threatens to leave future generations less well off. Fiscal consolidation initiated in 2013 was welcome but limited in scope. Future consolidation must be more ambitious and sustained over many years to restore sustainability. 30. Successful fiscal consolidation depends on both mobilizing more revenues and rationalizing expenditures. On the revenue side, Algeria must find ways to increase nonhydrocarbon revenues, given finite hydrocarbon resources and the volatile nature of oil prices. Although statutory tax rates are not especially low, the tax base is small, implicit subsidies are costly in terms of foregone revenues, and more can be done to strengthen tax administration. On the expenditure side, Algeria must contain current spending while preserving growth-enhancing capital 14 The authorities intend to have a medium-term budget framework and performance-based budgeting in place by 2016, with a transition period beginning in 2015. |
| Keywords: | Fiscal policy;Revenue mobilization;Government expenditures;Hydrocarbons;Exports;Private sector;Labor markets;Employment;Selected Issues Papers;Algeria; |
| Date: | 2014–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/342&r=ara |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Abstract: | KEY ISSUES Context. High oil prices and production have contributed to sizable fiscal and external surpluses. Non-oil growth has picked up, mainly driven by consumption and investment. Political developments in the last few years have had an adverse impact on the implementation of public investment program. A new five-year Development Plan for 2015–19 has been proposed to the Parliament. The authorities are initiating subsidy and public wage reforms, as well as fiscal and financial institutional and regulatory reforms. Kuwait is at an inflection point as economic diversification, a key policy priority, has to start now to generate a higher and sustainable growth path. Recent oil price developments. The recent decline in oil prices further highlights current challenges. While the consultation with the authorities took place when oil prices were projected to decline from $105 per barrel in 2014 to $96 per barrel in 2019, since then they have fallen by about 20–25 percent. Staff’s policy recommendations on the pace of fiscal and structural reforms remain valid if the current drop in oil prices is temporary. Staff also developed with the authorities a downside scenario, with oil prices lower by $20 over the five year period. Under this scenario, with substantial buffers that have been built-up, a decline in oil prices should not trigger immediate spending cuts, especially in capital expenditure, but it places more urgency on implementing the government’s medium-term consolidation plans to contain current spending consistent with intergenerational equity. Political setting. Since the formation of the last Parliament after elections in July 2013, some tensions resurfaced in early 2014 (six parliamentary elections were held during 2006–13). It is vital for the government and the parliament to agree on an agenda to place the public investment program on track and continue structural reforms. Outlook and risks. Kuwait’s near- and medium-term economic outlook is favorable. Non-oil GDP growth in Kuwait is expected to pick up to 4.0–5.0 percent in the medium term, supported by government investment in infrastructure and the oil sector, and by consumption. The main downside risk to the outlook arises from lower global oil demand and prices. Macroeconomic policies. The current strong fiscal position notwithstanding, spending rigidities and reliance on oil revenues have highlighted fiscal risks. Containing current spending growth by restraining the wage bill and reforming subsidies (combined with targeted mitigating measures and a well-designed communication strategy) is important 2 INTERNATIONAL MONETARY FUND for ensuring fiscal sustainability. Developing a supportive fiscal policy framework underpinned by medium-term macroeconomic and expenditure frameworks, while preparing for an adoption of fiscal rules, would strengthen the reform process. In the context of the exchange rate basket peg, the central bank should continue to be proactive in liquidity management. Enhancing financial stability. Prudent regulation and supervision by the central bank has ensured banking system stability. Risks to the financial system from investment companies are contained, although a few companies continue to make losses and deleverage and restructure their balance sheets and operations. Enhancing the macroprudential policy framework would further strengthen systemic stability. Economic Diversification. Reforms are needed for improving the business environment, public investment efficiency, and education and skills. In addition, measures to realign incentives for firms and national workers to promote entrepreneurship and private sector employment are required. These would include increasing private sector competition, reducing wage gaps between the public and private sector, and containing public employment. |
| Keywords: | Article IV consultation reports;Economic growth;Fiscal policy;Fiscal reforms;Monetary policy;Macroprudential Policy;Banking sector;Bank supervision;Economic indicators;Debt sustainability analysis;Staff Reports;Press releases;Kuwait; |
| Date: | 2014–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/333&r=ara |