nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2016‒02‒23
seven papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Institutions and Development in MENA Region: Evidence from the Manufacturing Sector By Ali Fakih; Mahmoud Arayssi
  2. What is new in the ‘borderlands’? The influence of EU external policy-making on security in Tunisia and Morocco after the uprisings By Federica Zardo; Francesco Cavatorta
  3. Unshrouding Effects on Demand for a Costly Add-on: Evidence from Bank Overdrafts in Turkey By Alan, Sule; Cemalcilar, Mehmet; Karlan, Dean S.; Zinman, Jonathan
  4. The Effects of Money Laundering (ML) on Growth: Application to the Gulf Countries By Issaoui, Fakhri; WASSIM, TOUILI; HASSEN, TOUMI
  5. Impact of Ethical Screening on Risk and Returns: the Case of Constructed Moroccan Islamic Stock Indexes By BOUSALAM, Issam; HAMZAOUI, Moustapha
  6. Evaluating Minimum-Traffic Guarantees for PPPs in Turkey by Real-Option Pricing By Ilker Ersegun Kayhan; Glenn P. Jenkins
  7. Démocratisation de l’éducation et inégalités scolaires au Maroc By Liouaeddine, Mariem

  1. By: Ali Fakih; Mahmoud Arayssi
    Abstract: This paper examines the role of institutions (including civil law origin), financial deepening and degree of regime authority on growth rates in the Middle East and North Africa (MENA) region using panel data through a fixed effect model. The results reveal that English civil law origin and the establishment of the rule of law work with the development of financial institutions to increase economic growth in these economies; however, the democratization of the political institutions and foreign direct investment do not assist financial development in promoting economic growth. The findings emphasize the prominence of overcoming institutional weaknesses and establishing transparent public policy governing businesses as a pre-requisite for successful universal integration in developing countries.
    Keywords: Eonomic growth, institutional development, financial development, MENA region,
    JEL: G2 O16 P48
    Date: 2015–02–05
  2. By: Federica Zardo; Francesco Cavatorta
    Abstract: The struggle between the contradictory objectives of security and democratic governance has dominated EU discourse, policies and practices when it comes to the southern bank of the Mediterranean since 1995. Ultimately, there is a scholarly consensus on the substantial failure of what had been the normative drive for setting up the partnership: no shared area of prosperity and democracy exists today because security concerns prevailed. As reliable partners for the EU on security issues, Tunisia and Morocco were crucial in entrenching the securitisation of the relationship. This holds true also after the uprisings, as encouraging premises quickly turned into considerable instability in the Middle East and North Africa. This study employs a borderlands approach to analysing the ways in which the EU outsources the management of key ‘border functions’ while attempting to connect the periphery in other issue-areas. More specifically, it examines the implications of the EU’s post-2011 revision of its security ‘cooperation’ with Tunisia and Morocco for two aspects of the relationship. First, it looks at the way in which domestic political reconfigurations have occurred and how these reconfigurations have influenced relations with the EU. Second, it explores the asymmetries of power between the two parties and the degree of ‘leverage’ Tunisia and Morocco have vis-à-vis the EU.Our main contention is that the soul-searching and reflective mode of EU officials was short-lived, and that the rhetoric about past mistakes and new beginnings in the early days of the uprisings has not been matched over time. As enthusiasm for the Arab Spring faded on both sides of the Mediterranean, the EU reverted to a business as usual approach, demanding and obtaining the cooperation of both Tunisia and Morocco, irrespective of the diverging post-uprising trajectories of the two countries.
    Keywords: European Union, Mediterranean, Arab Spring, Security, Neighborhood
    Date: 2016–01
  3. By: Alan, Sule; Cemalcilar, Mehmet; Karlan, Dean S.; Zinman, Jonathan
    Abstract: Models of shrouding predict that firms lack incentives to compete on add-on prices. Working with a large Turkish bank to test SMS direct marketing promotions to 108,000 existing checking account holders, we find that messages promoting a large discount on the overdraft interest rate reduce overdraft usage. In contrast, messages that mention overdraft availability without mentioning price increase usage. Neither change persists long after messages stop, suggesting that induced overdrafting is not habit-forming. Our results are consistent with a model of limited memory and attention.
    Keywords: advertising; consumer banking; contingent charges; deposit accounts; habit formation; limited attention; retail banking; salience
    JEL: D12 D14 G2
    Date: 2015–02
  4. By: Issaoui, Fakhri; WASSIM, TOUILI; HASSEN, TOUMI
    Abstract: the strategic goal of this paper is to study the effects of the prevention policies against money laundering on growth in the gulf countries (Saudi Arabia, Kuwait, Qatar, Bahrain, UAE and Oman) from 1980 to 2014. Thus, the logistic regression (logit model) had given three fundamental results. The first had shown that the main policies in matter of fight against money laundering (anti money laundering law AMLL, suspicious transaction reporting STR, the criminalizing of terrorist financing CTF) have had positive effects on the increasing of probabilities to realize more growth. The second is that the said policies have had positive effects on the increasing of the degree of openness of the whole sample. The third is that the variable (proximity) had a positive and significant effect on anti-money laundering policies.
    Keywords: Money laundering, growth, efficiency, gulf countries
    JEL: G14 G15
    Date: 2016–02–12
  5. By: BOUSALAM, Issam; HAMZAOUI, Moustapha
    Abstract: Despite the increasing attention given to Islamic investment, there is still existing few empirical papers that examined the performance and volatility of Islamic Funds and indices in comparison to their conventional unscreened counterparts. These studies provide mixed evidence with regards to risk and returns of Islamic funds and indices. This paper aims to expand the literature on this subject by studying the Moroccan case considering the recent introduction of Islamic finance in the country towards the end of 2015. Since there is still no Shariah compliant indices in Morocco, we first applied four Shariah screening methodologies of some of the world leading equity index providers (i.e. Dow Jones, FTSE, S&P and MSCI) to screen the public listed companies in Casablanca Stock Exchange for Shariah compliance. Next, we constructed four Islamic float-weighted indexes for which we modeled the dynamic volatility using an extension of the AutoRegressive Conditional Heteroskedasticity models, namely EGARCH(1,1). The findings show that the screening process resulted in a well diversified universe of Shariah compliant stocks (25.6%) to invest in. Furthermore, it is found that constructed Islamic indices outperformed the broad-based Moroccan All Shares Index (MASI) during the considered period of analysis (January 2013 to December 2014) and their long run volatility is higher. This indicates that investors in Shariah-compliant stocks do not sacrifice financial performance for their risky investment. The estimates of the model show that volatility for the MASI is more persistent and takes longer time to die, and the leverage effect is positive for all indices meaning that volatility of indexes' returns is influenced more by good news than bad news, a result that is in contrast to other studies for developed countries.
    Keywords: Islamic Index, Shariah screening, EGARCH volatility model, Morocco.
    JEL: C22 G11
    Date: 2016–01–02
  6. By: Ilker Ersegun Kayhan (Chevening/Abdullah Gül Research Fellow, Oxford Center for Islamic Studies, University of Oxford); Glenn P. Jenkins (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)
    Abstract: Minimum-traffic guarantees for build-operate-transfer toll-road projects are contingent liabilities that expose government to fiscal risk. Therefore, public authorities must value guarantees, thereby enabling informed decision-making about the level and type of guarantee provision. This study demonstrates the use of financial modeling and risk analysis in a toll-road project in Turkey, contributing to the narrowing of a capacity gap in the field. We present three types of guarantee, modeled as real options and evaluated by Monte Carlo simulation. We identify one criterion to determine the optimum level of guarantee for a given project, and one criterion to measure the extent to which a guarantee will reduce risk. Based on these and other complementary criteria, it is proposed that the guarantee with income ceiling is the most appropriate for the project considered here. The paper concludes with a discussion of the policy implications of the findings.
    Keywords: Contingent liabilities, government guarantees, real options, cost-benefit analysis, public-private partnerships, infrastructure, Turkey.
    JEL: G13 D61 H54 L33
    Date: 2016–02
  7. By: Liouaeddine, Mariem
    Abstract: This article aims to highlight first, the concept of educational democratization. Then it assesses the type of educational democratization achieved in Morocco through the analysis of the evolution of the specific enrollment rate. This indicator shows that the democratization of education is quantitative, qualitative and almost equalized in primary school, uniform in the secondary level and segregated in the high school level
    Keywords: Democratization, education, educational inequalities, Morocco
    JEL: I21 I24 I28
    Date: 2016

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