nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2017‒09‒03
sixteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The regional pricing of risk: An empirical investigation of the MENA equity determinants By Khaled Guesmi; Sandrine Kablan; Aymen Belgacem
  2. Optimal Taxation and Economic Growth in Tunisia: Short and Long Run Cointegration Analysis By Chokri Terzi; Anis El Ammari; Ali Bouchrika; Khalil Mhadhbi
  3. Excluded Generation: The Growing Challenges of Labor Market Insertion for Egyptian Youth By Assaad, Ragui; Krafft, Caroline
  4. Do political connections affect banks' leverage? Evidence from some Middle Eastern and North African countries By Rihem Braham; Lotfi Belkacem; Christian De Peretti+
  5. Fiscal Incidence and Poverty Reduction: Evidence from Tunisia By Nizar Jouini; Nora Lustig; Ahmed Moummi; Abebe Shimeles
  6. An application of the CEQ Effectiveness indicators: The case of Iran By Ali Enami
  7. The Impact of Domestic Investment in the Industrial Sector on Economic Growth with Partial Openness: Evidence from Tunisia By Bakari, Sayef; Mabrouki, Mohamed; elmakki, asma
  8. The impact of the shadow economy on aid and economic development nexus in Egypt By Hassan, Mai
  9. The Three-Way Linkages between Export, Import and Economic Growth: New Evidence from Tunisia By Bakari, Sayef
  10. How incentives matter ? An illustration from the Targeted Subsidies reform in Iran By Stéphane Gauthier; Taraneh Tabatabai
  11. Violent Conflict and Breastfeeding: The Case of Iraq By Diwakar, Vidya; Malcolm, Michael; Naufal, George S
  12. A Practitioner’s Guide for Building the Interregional Input-Output System for Morocco, 2013 By Eduardo Amaral Haddad; Fatna El Hattab; Abdelaaziz Aït Ali
  13. The Impact of the Action Plan for Promoting Employment and Combating Unemployment on Employment Informality in Algeria By Souag, Ali; Assaad, Ragui
  14. Organizational Excellence in Palestinian Universities of Gaza Strip By Naser Elshobaki
  15. Child Discipline in Times of Conflict By Malcolm, Michael; Diwakar, Vidya; Naufal, George S
  16. Requirements for Applying DSS in Palestinian HEI -Applied Study on Al - Aqsa University in Gaza By Naser Elshobaki

  1. By: Khaled Guesmi (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Sandrine Kablan (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Aymen Belgacem (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Using a sample of five-MENA emerging countries (Egypt, Tunisia, Morocco, Jordan, and Turkey) during the period 1996-2013, this study highlights the main factors that might influence regional integration of stock markets. We propose an advantageous econometric approach based on a conditional version of the International Capital Asset Pricing Model (ICAPM) to explore major sources of time-varying risks. We specifically apply the multivariate BEKK-GARCH process to simultaneously estimate the ICAPM for each country. The study puts in evidence that inflation, volatility of exchange rates, yield spread, current account deficit, dividend yield and economic growth are among the key determinants of regional integration in the MENA context whatever is the measure of exchange rate risk.
    Keywords: Multivariate GARCH,regional integration,ICAPM,MENA JEL Classification: F36,C32,G12
    Date: 2017–05–24
  2. By: Chokri Terzi (IMM - Institut Marcel Mauss - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Anis El Ammari (IMM - Institut Marcel Mauss - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Ali Bouchrika (IMM - Institut Marcel Mauss - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Khalil Mhadhbi (IMM - Institut Marcel Mauss - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Tax policy is among the most common and relevant instruments in the toolkit of policy-makers when thinking about promoting growth, yet there is not compelling evidence regarding its effect in Tunisia. Using a variety of approaches, we measure firstly the optimal tax burden rate using Scully’s static model and the quadratic model. For Scully’s static model, gross domestic product is the dependent variable. For the quadratic model, growth rate is a dependent variable explained by tax rate in level and in square including dummy variables. Secondly and according to stationary and cointegration test results, we focus on the long-term effects on gross domestic product of the important taxes, namely tax revenue and private receipts including dummy variable. In this second study, we use a basic Scully model and we develop a vector error correction model technique. Our results show that optimal tax burden rate has to be situated between 12.8% and 19.6% of gross domestic product which is widely lower than the current rates. The long-term analysis estimates an optimal rate of 15.2% of gross domestic product which can participate to increase economic growth, to stabilize the tax evasion and to encourage investment especially after the Tunisian revolution.
    Keywords: cointegration,tax burden rate, growth, vector error correction model
    Date: 2017–06–22
  3. By: Assaad, Ragui (University of Minnesota); Krafft, Caroline (St. Catherine University)
    Abstract: Youth in Egypt hold rising aspirations for their adult lives, yet face an increasingly uncertain and protracted transition from school to work and thus into adulthood. This paper investigates how labor market insertion has been evolving over time in Egypt and how the nature of youth transitions relates to gender and social class. We demonstrate that youth today face poorer chances of transitioning into a good job than previous generations, despite large increases in educational attainment. Social class is playing an increasing role in determining the success of the transition from school to work in Egypt. Whether youth successfully make transitions to formal jobs, embark on such transitions and fail, or pursue a traditional route to adulthood depends on a complex and changing interaction between their own educational attainment and the resources of their families. In light of these findings, we discuss the policies that can help facilitate successful transitions for struggling youth in Egypt.
    Keywords: transition from school to work, youth, adulthood, life course, Egypt
    JEL: I24 J24 J45 J62 O15
    Date: 2017–08
  4. By: Rihem Braham (LAREMFIQ - Laboratory Research for Economy, Management and Quantitative Finance - Institut des Hautes Etudes Commerciales (Université de Sousse)); Lotfi Belkacem (LAREMFIQ - Laboratory Research for Economy, Management and Quantitative Finance - Institut des Hautes Etudes Commerciales (Université de Sousse)); Christian De Peretti+ (SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1)
    Abstract: This study examines the association between political patronage and banks' financing decision in a sample of 34 commercial banks operating in Middle East and North Africa region for the period 2003-2014. Linear and nonlinear Panel Data analysis is used to investigate this relationship. The results reveal that politically backed banks tend to be more leveraged. Additionally, the indirect effect of political patronage on leverage is found to be not so large but significant through interaction with profitability, that is, politically backed banks with higher profitability are positively associated with leverage. Our findings imply that the privileges resulting from political ties in terms of market power and easier access to financing sources make banks more profitable and this also leads to higher leverage. In line with the related literature, a strong political presence in the board of banks can be considered as an important intangible asset enabling banks to draw more direct rents from the government which would not otherwise be available; also, as one of the factors driving bank financing decisions.
    Keywords: political patronage, leverage, indirect effect, panel data, commercial banks
    Date: 2017–05–09
  5. By: Nizar Jouini (Doha Institute for High Graduates); Nora Lustig (Department of Economics, Tulane University); Ahmed Moummi (African Development Bank); Abebe Shimeles (African Development Bank)
    Abstract: Applying standard fiscal incidence analysis to the National Survey of Consumption and Household Living Standards for 2010, this paper estimates the impact of Tunisia's tax and transfer system on inequality and poverty and assesses who benefits from public spending on education and health. Our results show that Tunisia fiscal policy reduces inequality and extreme poverty through redistributive public spending. However, the headcount ratio with the national poverty increases implying that a large number of the poor pay more in taxes than what they receive in cash transfers and subsidies. This is due to a relatively high burden of personal income taxes and social security contributions for low-income households.
    Keywords: Benefit incidence, inequality, poverty, Tunisia
    JEL: D31 H22 I38
    Date: 2017–08
  6. By: Ali Enami (Department of Economics, Tulane University)
    Abstract: This chapter provides an application of the new CEQ effectiveness indicators for the case of Iran. The Impact and Spending Effectiveness indicators are used to assess the performance of the taxes and transfers in reducing inequality while Fiscal Impoverishment and Gains Effectiveness indicator is utilized to measure the performance of the components of the Iran's fiscal system with regard to the reduction in poverty (or not exacerbating it in the case of taxes). I find that in the case of Iran, transfers are relatively more effective in reducing inequality than taxes. For example, direct transfers together realize about 40% of their potential to reduce inequality while direct taxes together only realize about 20% of their potential. Direct and indirect taxes are especially effective in raising revenue without causing poverty to rise, a desirable property of fiscal systems. While transfers are not targeted toward the poor, they reduce poverty significantly. The main driver is the Targeted Subsidy Program (TSP), a universal cash transfer program implemented in 2010 to compensate individuals for the elimination of energy subsidies. In spite of its large poverty reducing impact, the effectiveness of TSP is rather low because of its universality.
    Keywords: Inequality, poverty, fiscal incidence, marginal contribution, effectiveness indicator, Iran
    JEL: D31 H22 I38
    Date: 2017–08
  7. By: Bakari, Sayef; Mabrouki, Mohamed; elmakki, asma
    Abstract: This paper investigates the relationship between industrial domestic investment and economic growth in Tunisia. In order to achieve this purpose, annual data for the periods between 1969 and 2015 were tested using the Johansen co-integration analysis of VECM and the Granger-Causality tests. According to the result of the analysis, it was determined that there is a negative relationship between industrial domestic investment and economic growth in the long run term. Otherwise, and on the basis of the results of the Granger causality test, we noted a unidirectional causal relationship from economic growth to industrial domestic investment in the short term. These results provide evidence that domestic investment in industrial sector, thus, are not seen as the source of economic growth in Tunisia during this large period and suffer a lot of problems and poor economic strategy.
    Keywords: Industrial Investment, Economic Growth, Tunisia, Cointegration, VECM and Causality.
    JEL: A1 E22 F0 O4 O47 O55
    Date: 2017–08
  8. By: Hassan, Mai
    Abstract: Egypt suffers from low growth rates, increasing unemployment, poverty and a persistent shadow economy. Yet, Egypt is among the top 10 recipients of aid to promote economic development. Given this controversy, the purpose of this study is to examine the impact of the shadow economy on economic development and on aid effectiveness in Egypt from 1976 to 2013. There is a limited number of studies focusing on aid-development nexus for the case of Egypt which are inconclusive of the main channels that influence this nexus. Therefore, this paper adds to the literature by intersecting the shadow economy as an indirect channel affecting the aid-development nexus in Egypt. To this end, the fully modified OLS methodology is applied. The results indicate that the shadow economy has a negative impact on economic development and a diminishing effect on aid effectiveness. Because the effect of a change in aid on income is conditional on the size of the shadow economy in Egypt, it is important to calculate the marginal effect of aid on income for different values of the shadow economy. Based on the calculation of the marginal effect, one can conclude that the effect of aid on income is reversed given the presence of the shadow economy. The persistent existence of the shadow economy poses a major challenge for policy makers due its depressing effect on economic development and on aid effectiveness.
    Keywords: Development aid; shadow economy; FMOLS; Egypt
    JEL: C32 F35 O11 O17
    Date: 2017–08–10
  9. By: Bakari, Sayef
    Abstract: This study investigates the nexus between exports, imports and economic growth in Tunisia using annual time series data for the period 1965 - 2016 by implementing cointegration analysis and vector error correction model. The empirical results show that in the long run (i) exports affect negatively on economic growth, (ii) imports have positive effect on economic growth, (iii) economic growth have positive effect on exports, and imports have positive effect on exports. However in the short run empirical results show that there is (i) bi-directional causal relationship between exports and economic growth, (ii) uni-directional causal relationship from exports to imports, (iii) uni-directional causal relationship from imports to economic growth. These results provide evidence that imports and exports are necessary in Tunisia's economy and are presented as an engine of growth since they cause economic growth in the short term. But exports are not carried out and treated with a solid and fair manner according to their negative effect on economic growth in the long run, which offer new insights into Tunisia’s openness policy for promoting economic growth.
    Keywords: Exports, Imports, Economic growth, Openness Policy, Tunisia.
    JEL: F0 F10 F11 F14 F43 O47 O55
    Date: 2017–08
  10. By: Stéphane Gauthier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Taraneh Tabatabai (UP1 - Université Panthéon-Sorbonne)
    Abstract: We use the Targeted Subsidies Reform implemented in Iran in 2011 to recover empirically the social valuations of Iranian households relying on the assumption of optimal taxes. Unlike the existing literature, we do not restrict attention to a specific pattern for the incentive constraints associated with nonlinear income taxation. Instead we recover the Lagrange multipliers corresponding to these constraints. We find evidence of a significant redistribution toward the bottom three deciles of the income distribution before the reform. This redistribution is however limited by an incentive constraint where the rich envy the social treatment of the poor. At the outcome of the reform incentives no longer matter and the social welfare function of the government of Iran displays a Benthamite-like form.
    Keywords: Principal-agent,incentive constraints,Iran,Targeted Subsidies,social valuations,AIDS, D82, H21, L51
    Date: 2017–06
  11. By: Diwakar, Vidya (Overseas Development Institute); Malcolm, Michael (West Chester University of Pennsylvania); Naufal, George S (Texas A&M University)
    Abstract: This study explores the relationship between armed conflict and breastfeeding practices of Iraqi mothers. Using a unique pairing of the Iraq Body Count database, in conjunction with the 2006 and 2011 Multiple Indicator Cluster Surveys for Iraq, we find that increases in conflict-related casualties are associated with a decline in breastfeeding incidence, with some mixed results on breastfeeding duration. We also explore a number of potential causal channels, including interactions with household wealth and accessibility of formula. The results are informative in the context of designing policy aimed at stabilizing the long-term health and productivity of populations in conflict areas.
    Keywords: conflict, breastfeeding, Middle East, Iraq
    JEL: D74 I1 J13 J18
    Date: 2017–08
  12. By: Eduardo Amaral Haddad; Fatna El Hattab; Abdelaaziz Aït Ali
    Abstract: This paper reports on the recent developments in the construction of an interregional input-output matrix for Morocco (IIOM-MOR). As part of an ongoing project that aims to specify and calibrate an interregional CGE (ICGE) model for the country, a fully specified interregional input-output database was developed under conditions of limited information. Such database is needed for future calibration of the ICGE model. We conduct an analysis of the intraregional and interregional shares for the average total output multipliers. Furthermore, we also show detailed figures for the output decomposition, taking into account the structure of final demand.
    Date: 2017–08
  13. By: Souag, Ali (University of Mascara); Assaad, Ragui (University of Minnesota)
    Abstract: This paper examines whether the Action Plan for Promoting Employment and Combating Unemployment, a labor market intermediation program adopted by the Algerian government in 2008, reduced the informality of employment in Algeria. Using repeated cross-section data from the Household Survey on Employment for the period from 1997 to 2013, and a difference-in-difference methodology, we estimate whether the Action Plan has reduced the probability that workers are employed informally in enterprises of more than 5 workers – the type of enterprise that is most likely to be directly affected by the Action Plan. Our results show that the Action Plan has in fact contributed to reducing employment informality in such enterprises, but with heterogeneous effects. More precisely, it reduced informality for employees of establishments of 10 workers or more but had no significant effects on informality for those working in enterprises of 5 to 9 workers. Furthermore, when we restrict our estimates to new entrants only, we do not find statistically significant effects.
    Keywords: Algeria, informal employment, labor market programs
    JEL: J08 J48 O17
    Date: 2017–08
  14. By: Naser Elshobaki (AUG - Department of Information Techology)
    Abstract: The research aims to identify the organizational excellence in Palestinian universities of Gaza Strip, from the perspective of senior management. The questionnaires were distributed the top senior management in the Palestinian universities, and the study population was (344) employees in senior management in Palestinian universities. A stratified random sample were selected from of employees in the Palestinian universities consist of (182) employees at return rate of (69.2%). SPSS program for analyzing and processing the data was used. The study reached the following results: the senior management agrees largely on the importance of the axis of "Leadership Excellence" and "Excellence service sectors". The senior management agrees moderately about the importance of the axis of the " Knowledge excellence". The study showed that there is a weakness in the employment of scientific research to serve the community, there is weakness in the follow-up of the universities management for the performance of their graduates in the institutions in which they work. Senior management agrees on the importance of the "Organizational Excellence" moderately. The recommendations of study includes: the need to develop principles and fair criteria for the selection of the best candidates for the university and university leaders based on specialization, competence, experience, skills, integrity and not on the basis of favoritism.
    Keywords: Senior Management,Palestinian universities,Gaza Strip,Leadership Excellence,Organizational Excellence
    Date: 2017–06–08
  15. By: Malcolm, Michael (West Chester University of Pennsylvania); Diwakar, Vidya (Overseas Development Institute); Naufal, George S (Texas A&M University)
    Abstract: Using a unique pairing of household survey data and geolocational conflict data, we investigate the relationship between local conflict intensity and the disciplinary methods employed by Iraqi households. We find that parents in high-conflict areas are more likely to use both moderate and severe corporal punishment, and are less likely to use constructive parenting techniques like redirection. While there is a general sense that war has profound long-term impacts on the psychological health of children, research on transmission mechanisms is very limited. These are among the first results that rigorously document an association between violent conflict and child maltreatment and, to our knowledge, the first that document changes in child discipline practices even across a mainstream parenting spectrum. Given the persistence of early childhood outcomes into adulthood, these results are potentially an important piece of assessing and mitigating the long-term costs of war on the civilian population.
    Keywords: Iraq war, child discipline, mental health, Middle East, household interactions
    JEL: D10 F51 J13 N45
    Date: 2017–08
  16. By: Naser Elshobaki (SFL - Structures Formelles du Langage - UP8 - Université Paris 8, Vincennes-Saint-Denis - CNRS - Centre National de la Recherche Scientifique - UPLUM - Université Paris Lumières, Académie de Créteil, Campus Condorcet)
    Abstract: The purpose of this research is to explain the requirements of applying decision support systems in Palestinian higher education institutions-an applied study on Al-Aqsa University in Gaza. The researchers used the descriptive and analytical methods. The study population is the staff members of Al-Aqsa University in Gaza. The researchers used the random sample method. 150 questionnaires were distributed to the study population and 126 responses were obtained back with a recovery rate (84%). The results of the study showed the followings: There was an approval by the sample members of the requirements of the application of decision support systems in general. The approval of "Support of senior management for the use of decision support systems" reached (62.60%). While the level of approval for "the possibilities for using decision support systems" (69.03%). Finally, the level of approval for the type of decision support systems used was 69.73%. The results showed that there were no statistically significant differences between the responses of respondents on the requirements of applying decision support systems due to the demographic variables (gender, age, qualification, and years of service). The study also concluded with a number of recommendations, the most important of which are the need to keep abreast of developments in the field of business, including the adoption of modern organizations on decision support systems, which represent the true value of organizations. It is a good for the university to rely entirely on decision support systems because it provides the management with the good information that the university needs. It is good for the university to increase attention and rely on modern systems because it works to develop performance and achieve the objectives of planning.
    Keywords: Decision Support Systems,Palestinian Higher Education Institutions,Palestinian Universities,Al-Aqsa University,Gaza Strip
    Date: 2017–06–06

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