nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒04‒11
seventeen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Action du pouvoir public, IDE, Contrôle de la corruption et Croissance économique dans la région MENA By Mtiraoui, Abderraouf
  2. Jordan and the Middle-Income Growth Trap: Arab Springs and Institutional Changes By Bénédicte Coestier
  3. Authoritarianism and labor market : preference of labor policies in the Arab Gulf countries By Matsuo, Masaki
  4. Evidence of Added Worker Effect from the 2008 Economic Crisis By Ayhan, Sinem H.
  5. The Next Chapter of ASEAN Economic Community through Integrating with the existing FTA partners (RCEP), Turkey, and Pakistan By durongkaveroj, wannaphong
  6. An evaluation of the 2014 subsidy reforms in Morocco and a simulation of further reforms By Verme,Paolo; El Massnaoui,Khalid
  7. Estimating the size of external effects of energy subsidies in transport and agriculture By Commander,Simon John; Nikoloski,Zlatko Slobodan; Vagliasindi,Maria
  8. Migration and Employment Interactions in a Crisis Context: the case of Tunisia By Marouani, Mohamed Ali; David, Anda
  9. Openness, Human Capital and Economic Growth in MENA: Theoretical foundations and application to Dynamic panel data By Mtiraoui, abderraouf
  10. Enhancing Financial Capability and Inclusion in Morocco : A Demand-Side Assessment By World Bank Group
  11. Middle East and North Africa : Epidemiology and Economics Intelligence to Inform Policy Decisions on Resource Allocation for HIV/AIDS Programs By World Bank
  12. CORE INFLATION INDICATORS FOR SAUDI ARABIA By William Barnett; Ryadh M. Alkhareif
  13. DSGE models for developing economies: an application to Morocco By Lahcen, Mohammed Ait
  14. The quest for subsidy reforms in Libya By Araar,Abdelkrim; Choueiri,Nada; Verme,Paolo
  15. Migration, labor and business in the worlding cities of the Arabian Peninsula By Gardner, Andrew M.
  16. Kurdistan Region of Iraq : Economic and Social Impact Assessment of the Syrian Conflict and the ISIS Crisis By World Bank
  17. Kurdistan Regional Government : Economic and Social Impact Assessment of the Syrian Conflict and ISIS Insurgency By Sibel Kulaksiz

  1. By: Mtiraoui, Abderraouf
    Abstract: The objective of this article is to show the effect of the action of public power on economic growth, control of corruption and foreign direct investment (FDI) in the MENA region. Our study focuses on the various aspects of the influence of two important aspects of institutional quality, namely government effectiveness and control of corruption and one of the most important aspects of global economic integration in the MENA region during the 1984-2012 period while using the model of simultaneous equations
    Keywords: Economic Growth, FDI, Control of corruption, Action of public power, simultaneous equation models.
    JEL: P3 P33
    Date: 2015–04–06
  2. By: Bénédicte Coestier
    Abstract: Although Jordan reached middle-income status more than three decades ago, the country has not made the additional leap, like most developing countries in the Middle East, to become a high-income economy. In this paper, we argue that institutions, namely formal rules (constitution, judiciary, political system) as well as “personality-based” informal rules (tribalism, wasta) might explain the middle-income growth trap. More precisely, we highlight that informal institutions, as well as the distorted use of formal institutions, are a by-product of the process of state formation. They play a part in the preservation of personal/anonymous relationships between the state and society and in the persistence of the rentier system. Jordanian Spring events reveal that a demand for reforming the power structure prevails over the overthrow of the Monarchy. Finally, to assess the undergoing transition process in Jordan, we resort to the social orders conceptual framework (North et al. (2009, 2012)) with an emphasis on impersonality (Wallis (2011)). The “Arab Springs” events have put pressure on the power structure to advance the rule of law (impersonal relationships among elites), and on the Monarchy in Jordan to create a “perpetual” state.
    Keywords: Economic development, middle-income growth trap, rentier system, institutions, rule of law, tribalism, wasta, Arab springs.
    JEL: D02 H11 O43 O53 N45 Z1
    Date: 2015
  3. By: Matsuo, Masaki
    Abstract: Migrant and labor issues are a primary concern in the Arab Gulf countries. With focus on the economic and political conditions that influence actors' decisions when framing labor policies, this study analyzes how preferences of such policies are formed and explains why the governments of the Arab Gulf countries attempt to implement less economical policies. The findings suggest that governments avoid concessions for enterprises required to implement more economical policies and chose uneconomical ones to maintain authoritarian regimes.
    Keywords: Gulf Countries, Labor market, Migrant labor, Migration, Authoritarianism, Labor policy, Arab Gulf countries
    JEL: F22 J31 J61 N35
    Date: 2015–03
  4. By: Ayhan, Sinem H. (IZA)
    Abstract: This paper contributes to the research on interdependencies in spousal labor supply by analyzing labor supply response of married women to their husbands' job losses ("added worker effect"). It empirically tests the hypothesis of added worker effect relying on a case study on Turkey during the global economic crisis of 2008. Identification is achieved by exploiting the exogenous variation in the output of male-dominated sectors that were hit hard by the crisis and the high degree of gender segmentation that characterizes the Turkish labor market. Findings based on the instrumental variable approach suggest that the probability of entering the labor force for a woman increases by up to 29% in response to her husband's unemployment. However the effect is not contemporaneous; it appears with a quarter of lag and remains existent only for two quarters.
    Keywords: spousal labor supply, added worker effect, discouraged worker effect, global economic crisis
    JEL: C26 D10 J16 J22
    Date: 2015–03
  5. By: durongkaveroj, wannaphong
    Abstract: Economic integration is nowadays likely to be larger in major economies around the world, especially among the ten active countries in the Southeast Asia. The purpose of this study is to investigate the impacts of the possible trade agreement between the ASEAN and its current FTA partners as RCEP, Turkey, and Pakistan through Computable General Equilibrium (CGE) model using Global Trade Analysis Project (GTAP) model. This study reveals that most of the ASEAN member countries is positively affected under various trade bloc on their GDP, export, import, and regional household income. However, there is the difference in the level of gains among all members which leads to an urgent responsibility to create an inclusive growth.
    Keywords: AEC; FTA; RCEP; Trade liberalization; CGE model; GTAP model
    JEL: C68 F0 F1 F15 F5
    Date: 2015–03–21
  6. By: Verme,Paolo; El Massnaoui,Khalid
    Abstract: Under increasing budget pressure, Morocco carried out an extensive set of subsidy reforms in 2014 and is planning for further reforms for 2015?2017, which will eliminate most consumers'subsidies. This paper evaluates (ex post) the 2014 reforms and simulates (ex ante) the impact on household welfare, poverty, and the government budget of the total elimination of subsidies. The paper considers food and energy subsidies and estimates direct and indirect effects using SUBSIM, a subsidies simulation model designed by the World Bank. It finds that the 2014 reforms have been a good mix of reforms from a distributional, welfare, poverty, and government budget perspectives. They are perhaps the most rational reforms undertaken in the Middle East and North Africa region in recent years. The analysis also finds further reforms costly for the poor and more complex from a political economy perspective, especially for liquefied petroleum gas.
    Keywords: Markets and Market Access,Energy Production and Transportation,Taxation&Subsidies,Transport Economics Policy&Planning,Emerging Markets
    Date: 2015–03–30
  7. By: Commander,Simon John; Nikoloski,Zlatko Slobodan; Vagliasindi,Maria
    Abstract: It is widely accepted that the costs of underpricing energy are large, whether in advanced or developing countries. This paper explores how large these costs can be by focussing on the size of the external effects that energy subsidies in particular generate in two important sectors?transport and agriculture?in two countries in the Middle East and North Africa, the Arab Republic of Egypt (transport) and the Republic of Yemen (agriculture). The focus is mainly on the costs associated with congestion and pollution, as well as the impact of underpriced energy for depletion of scarce water resources, including through crop selection. Quantifying the size of external effects in developing countries has received relatively little analytical attention, although there is a significant body of literature for developed countries. By building on earlier research, as well as employing the United Nations ForFITS model, the paper provides indicative estimates of the external costs of energy subsidies, as manifested in congestion and pollution. The estimates using simulations indicate that these costs could be materially reduced by elimination or reduction of energy subsidies. The paper also describes the impact of energy subsidies on water consumption in a region where water resources are particularly limited. The findings provide further evidence of the adverse and significant consequences of subsidizing energy.
    Keywords: Transport and Environment,Energy Production and Transportation,Transport Economics Policy&Planning,Climate Change Economics,Climate Change Mitigation and Green House Gases
    Date: 2015–04–01
  8. By: Marouani, Mohamed Ali; David, Anda
    Abstract: This article analyses how a crisis impacts labor markets in origin countries through migration channels. For this purpose, we develop a novel dynamic general equilibrium model with a focus on the interlinkages be- tween migration, the labor market and education. The main innovation of the paper is the retrospective modeling in general equilibrium of the impact of an economic crisis to isolate the impact of migration on local unemployment. The impact of the crisis on education decision is captured through endogenous returns to education. The simultaneity of the crisis in Tunisia and its partners worsened the labour market situation mainly through the increase in labour supply. The main result is that migration is indeed one of the main determinants of the unemployment increase and that remittances have a higher impact than the variation of emigration flows. The low skilled bear the highest costs in terms of unemployment and wage decline.
    Keywords: International migration; remittances; labour supply; CGE; Tunisia; Migration internationale; transferts de fonds; offre de travail; équilibre général calculable; Tunisie;
    JEL: F22 F24 J21 C68
    Date: 2015–03
  9. By: Mtiraoui, abderraouf
    Abstract: Several econometrical recent studies carried on international comparison data puts into question the opinion according to which education as a human capital indicator would encourage growth. This result comes in a context of opening to the outside. The evaluations are made on data of dynamic panel with the generalized moment's method GMM, with a tertiary schooling rate as indicator reflecting the human capital. This human capital coefficient varies stochastically from a country to the other according to national features. Several among them permit to explain these differences of quality: educational infrastructures, capacity to provide education in an equal way, initial endowment in human capital in case of opening. We introduce several variables related to the structural, institutional features and to the development of the human capital to test their effects on growth in the M.E.N.A zone during the period 1994-2006. Most of the found results show the existence of a relation between the policies of opening, structural, institutional, human capital factors and the growth in these countries.
    Keywords: Human Capital, Growth, Opening to the outside, GMM, MENA
    JEL: F1 F10
    Date: 2015–01–22
  10. By: World Bank Group
    Keywords: Finance and Financial Sector Development - Access to Finance Banks and Banking Reform Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Finance and Financial Sector Development - Financial Literacy
    Date: 2014–12
  11. By: World Bank
    Keywords: Health Monitoring and Evaluation Health, Nutrition and Population - Adolescent Health Disease Control and Prevention Health, Nutrition and Population - Population Policies Health, Nutrition and Population - HIV AIDS
    Date: 2014–04
  12. By: William Barnett (Department of Economics, The University of Kansas; Center for Financial Stability, New York City; IC2 Institute, University of Texas at Austin); Ryadh M. Alkhareif (Economic Research Department, Saudi Arabian Monetary Agency)
    Abstract: This paper constructs and analyzes core inflation indicators for Saudi Arabia for the period of March 2012 to May 2014 using two alternative approaches: the Exclusion Method (ex food and housing/rent) and the Statistical Method. The findings of the analysis suggest that the ex food and housing/rent inflation is more volatile than the overall CPI inflation over the sample period. In contrast, the statistical core inflation is relatively more stable and less volatile. Moreover, the ex food and housing/rent inflation is only weakly correlated with headline inflation, whereas the statistical core inflation exhibits a stronger correlation. This combination of lower volatility and higher correlation with headline inflation makes the statistical method a much better choice for policymakers. From a monetary policy standpoint, using a bundle of core inflation measures, including both properly constructed Exclusion and Statistical methods, is more desirable, especially when variation across measures is widespread, as is the case in Saudi Arabia.
    Keywords: consumer price index, core inflation, generalized dynamic factor model, monetary policy.
    JEL: C51 E31 E58
    Date: 2015–03
  13. By: Lahcen, Mohammed Ait
    Abstract: In this thesis we try to understand the impact of some macroeconomic features of developing economies, in particular the existence of a large informal sector, on the reaction of these economies to different shocks. In order to achieve this objective, we derive a simple New Keynesian Small Open Economy DSGE model featuring multiple sectors with monopolistic competition, nominal rigidities in prices, a fixed exchange regime and the introduction of a simple medium-sized informal sector. We estimate the model with Bayesian estimation using quarterly data from Morocco. The model does a good job in capturing the unconditional second moments of the data. It is also able to replicate well some of the historical data series. Estimation results suggest a relatively weaker role of price rigidities in the non-tradables sector. It also suggests a much more aggressive reaction of the central bank to inflationary pressures with a relatively higher weight given to fluctuations in inflation compared with fluctuations in output and the real exchange rate. The study of the Bayesian impulse-response functions confirm the shock absorbing role of the informal sector for productivity shocks and pleads towards excluding imported inflation from the inflation target. However, no evidence is found of a shock absorbing role of the informal sector in the case of interest rate or foreign demand shocks.
    Keywords: DSGE, developing economies, informality, small open economy, new-keynesian
    JEL: E26 E31 E32 E37 E52 E58
    Date: 2014–08–29
  14. By: Araar,Abdelkrim; Choueiri,Nada; Verme,Paolo
    Abstract: Shortly before the 2011 Libyan revolution, consumers'subsidies were rapidly increased by the regime in an effort to reduce social discontent. In the aftermath of the revolution, these subsidies became important for people's subsistence, but also a very heavy burden for the state budget. Since then, the Libyan government has been confronted with the necessity of reforming subsidies in a politically and socially complex environment. This paper uses household survey data to provide a distributional analysis of food and energy subsidies and simulate the impact of subsidy reforms on household wellbeing, poverty, and the government's budget. Despite the focus on direct effects only, the results indicate that subsidy reforms would have a major impact on household welfare and government revenues. The elimination of food subsidies would reduce household expenditure by about 10 percent and double the poverty rate while saving the equivalent of about 2 percent of the government budget. The elimination of energy subsidies would have a similar effect on household welfare, but a larger effect on poverty while government savings would be almost 4 percent of the budget. The size of these effects, the weakness of market institutions, and the current political instability make subsidy reforms extremely complex in Libya. It is also clear that subsidy reforms will call for some form of compensation for the poor, a gradual rather than a big bang approach, and a product-by-product sequence of reforms rather than an all-inclusive reform.
    Keywords: Economic Theory&Research,Markets and Market Access,Energy Production and Transportation,Taxation&Subsidies,Food&Beverage Industry
    Date: 2015–03–30
  15. By: Gardner, Andrew M.
    Abstract: This short essay, built on a foundation of more than a decade of fieldwork in the hydrocarbon-rich societies of the Arabian peninsula, distills a set of overarching threads woven through much of that time and work. Those threads include a discussion of the social heterogeneity of the Gulf State citizenries, the central role of development and urban development in these emergent economies, the multifaceted impact of migrants and migration upon these host societies, and the role of foreign 'imagineers' in the portrayal of Gulf societies, Gulf values, and Gulf social norms.
    Keywords: Gulf Countries, Migrant labor, Migration, Urban development, Anthropolgy, Arabian Gulf States, Demography, Development
    JEL: F22 J11 J61 N35
    Date: 2015–03
  16. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Environmental Economics and Policies Finance and Financial Sector Development - Debt Markets Transport Economics Policy and Planning Public Sector Expenditure Policy Public Sector Development Transport Environment
    Date: 2015–02
  17. By: Sibel Kulaksiz
    Keywords: Transport Economics Policy and Planning Urban Development - City Development Strategies Education - Education For All Finance and Financial Sector Development - Debt Markets Health, Nutrition and Population - Population Policies Transport
    Date: 2015–03

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