nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2019‒05‒13
nine papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Are the Gulf States poised to become Uganda’s No. 1 trading partners? Emerging trends and imperatives By Ayoki, Milton
  2. Estimating the cost of capital for wind energy investments in Turkey By Gustav Fredriksson; Simone Tagliapietra; Georg Zachmann
  3. The Effect of the Arab Spring on the Preferences for Redistribution in Egypt By Bilal El Rafhi; Alexandre Volle
  4. The Economy-Wide Impact of Subsidy Reform: A CGE Analysis By Louise Roos; Philip Adams
  5. Trajectories of Knowledge Economy in SSA and MENA countries By Asongu, Simplice; Andrés, Antonio
  6. Harnessing the commons to govern water as a flow By Julie Trottier
  7. Achieving Sustainable Development Goals in MENA countries: an Analytical and Econometric Approach By Iyad Dhaoui
  8. Taxing Identity: Theory and Evidence from Early Islam By Saleh, Mohamed; Tirole, Jean
  9. Der Einfluss von organisatorischer Gerechtigkeit auf das berufliche Engagement in den jordanischen Ministerien By Shawabkeh, Yazan Taher; AL-Lozi, Musa; Masa'deh, Ra'ed

  1. By: Ayoki, Milton
    Abstract: For centuries, Europe has been an important market for products from Sub-Saharan Africa. In the turn of the twenty-first century, however, the boundary of the trade geography dramatically changed, with African products increasingly going to the Gulf region. Using the World Bank WITS database, this paper examines the nature and evolution of the Uganda’s exports to the Gulf States over the last 15 years. Evidence shows high exports concentration within the top-5 products—precious stones and glass, raw materials, animal, vegetable, and consumer goods—with Uganda’s strongest revealed comparative advantage (RCA) being in vegetables. Uganda’s RCA profile has evolved over the years; its export sector strengths changed from hides and skins, and stone and glass, to vegetables and is trending towards animals and food products. This trend partly reflects the dynamic natures of the Gulf markets, suggesting continuous efforts at both government and industry level, to harness productivity and product quality, to stay ahead of completion.
    Keywords: Bilateral trade, revealed comparative advantage, Uganda, Gulf States, Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates (UAE)
    JEL: F13 F14 F15
    Date: 2019–01–31
  2. By: Gustav Fredriksson; Simone Tagliapietra; Georg Zachmann
    Abstract: The research was carried out with the kind support of Stiftung Mercator. Wind power represents a key component of Turkey’s energy strategy. Increased investment will be required to meet Turkey’s wind power target and, as such, there is a need to understand the viability of wind power projects there. The cost of capital is a crucial element in wind power investment decisions owing to the high capital intensity of wind power plants. A reduction in the cost of capital through support policies can lower overall project costs and increase investment. We estimate the cost of capital for wind power projects in Turkey using data on 138 installations that participated in the Turkish feed-in tariff scheme in 2017. Our estimates indicate an upper bound of 12% for the cost of capital. This suggests the cost of capital for wind power projects in Turkey is not higher than in south-eastern European Union countries. However, because of adverse macroeconomic conditions, the cost of Turkey’s main renewable support scheme increased by 46% between 2016 and 2017 in Turkish lira terms. We argue that continued commitment to the current support schemes by the Turkish authorities is crucial for the development of the Turkish wind power sector.
    Date: 2019–05
  3. By: Bilal El Rafhi (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Alexandre Volle (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: The present paper investigates the effect of the revolution occurred in January 2011 in Egypt on the Preferences of Redistribution. This shock has been an important event enhancing the freedom situation and political structure. In a first step taking into account the main determinants explaining Preferences of Redistribution displayed in literature, our results differ showing a positive impact of the religion and a negative impact of the altruistic attitude. In a second step, we rely on a diff-in-diff approach to estimate the effect of the revolution using as control group three similar countries. We find that Egyptians became much more favorable to redistribution after the Arab Spring. Moreover, the revolution effect is stronger for the poorest people and those who are interested in politics.
    Keywords: Revolution political rivalries,political situation,Redistributive preferences,Revolution,Arab spring,Freedom,Political situ- ation
    Date: 2019–02–07
  4. By: Louise Roos; Philip Adams
    Abstract: Oil prices fell from around $US110 per barrel in 2014 to less than $US50 per barrel at the start of 2017. This put enormous pressure on government budgets within the Gulf Cooperation Council (GCC) region. The focus of GCC economic policies quickly shifted to fiscal reform, including the removal of domestic subsidies on energy products. In this paper we use a dynamic Computable General Equilibrium (CGE) model to investigate the economic impact of the gradual removal of subsidies on refined petroleum and electricity, with specific reference to the Kingdom of Saudi Arabia (KSA). Our study shows that removing subsidies eliminates a large distortion in the economy. This improves the efficiency of resource use, so that even though employment and capital in most years fall relative to baseline levels, real GDP rises. In addition, we show that fully-funded compensation payments offset the increases in energy prices, leaving economic welfare of the Saudi-national population little affected. Removing the energy subsidies leads to an improvement in the net volume of trade, while leading to a mixed outcome for industries.
    Keywords: Computable General Equilibrium (CGE) models, Energy Subsidies, Trade
    JEL: C68 D58 E63 O53
    Date: 2019–05
  5. By: Asongu, Simplice; Andrés, Antonio
    Abstract: In the first critical assessment of knowledge economy dynamic paths in Africa and the Middle East, but for a few exceptions, we find overwhelming support for diminishing cross-country disparities in knowledge-based economy dimensions. The paper employs all the four components of the World Bank’s Knowledge Economy Index (KEI): economic incentives, innovation, education, and information infrastructure. The main finding suggests that sub-Saharan African (SSA) and the Middle East and North African (MENA) countries with low levels of KE dynamics and catching-up their counterparts of higher KE levels. We provide the speeds of integration and time necessary to achieve full (100%) integration. Policy implications are also discussed.
    Keywords: Knowledge economy; Principal component analysis; Panel data; Convergence; Development
    JEL: F42 O10 O38 O57 P00
    Date: 2019–01
  6. By: Julie Trottier (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVD - Université de Perpignan Via Domitia - UM3 - Université Paul-Valéry - Montpellier 3 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper examines the usefulness of recognizing the commons governing irrigation water. It harnesses the commons to understand the power interactions at play in transformations over local, national and international scales. It proposes to harness the positive externalities commons generate in order to transform political and economic interactions at the national and international scales. Although it uses a Palestinian case study, this conceptual development can apply anywhere. Palestinians have long managed irrigation as commons at the local level. But the overwhelming attention paid to their national struggle has led most researchers to focus on national institutions instead. It has also favored treating water as a stock rather than a flow. All West Bank aquifers are shared with Israel. The Oslo agreements treated them as a stock and divided them quantitatively between two users: Israel and the Palestinian Authority. Recognising the existence of commons in Palestinian irrigation allows treating water as a flow. Indeed, the same water drops flow successively through several institutions, some Palestinian and others Israeli, deploying different property regimes over varying scalar levels. This paper examines the usefulness of considering water as a flow that is managed successively by such a variety of institutions. At the local level, it allows us to understand the interactions between smallholders and neighboring agribusinesses, for example. It allows us to understand the upheaval in power interactions when a merchant economy attempts to supplant a human economy. At the national level, it allows us to address the governance of the paracommons. This term designates the material gains potentially generated by the improvement of efficiency within various systems all drawing on the same source of water. Such gains are dynamic because the efficiency gain in one system often entails a loss in a neighbouring system or in a distant, yet interlinked, system. These material gains thus constitute a new commons, the appropriation of which needs to be governed. It is a paracommons because it doesn't exist until the projects designed to improve the efficiency of different systems are implemented. Donors are funding heavily projects purporting to improve irrigation efficiency. Addressing the governance of the paracommons of Palestinian irrigation is now urgent. This paper analyses the manner the social capital developed in existing commons can contribute to this. Finally, at the international level, including the institutions emerging from the commons into an institutional structure that manages water as a flow allows us to break the deadlock of present water negotiations between Israel and the Palestinian Authority. The paper details the manner this can be achieved.
    Abstract: Cet article explore l'utilité de reconnaître les communs qui gouvernent l'eau destinée à l'irrigation. Il mobilise la notion de communs pour comprendre les interactions de pouvoir en jeu au sein des transformations se réalisant sur des échelles locale, nationale et internationale. Il propose de se saisir des externalités positives générées par les communs afin de transformer les interactions politiques et économiques aux échelles nationale et internationale. Bien qu'il s'appuie sur une étude de cas palestinienne, ce développement conceptuel peut être appliqué n'importe où. Les Palestiniens gèrent depuis longtemps l'irrigation en tant que communs au niveau local. Cependant, l'attention massive qu'a suscitée leur combat national a mené les chercheurs à se focaliser sur les institutions nationales plutôt que sur les institutions locales. Cette focalisation sur l'échelle nationale a aussi favorisé la perception de l'eau en tant que stock plutôt qu'en tant que flux. Tous les aquifères de Cisjordanie sont partagés avec Israël. Les accords d'Oslo les ont traités comme un stock et les ont divisés quantitativement entre deux utilisateurs : Israël et l'Autorité Palestinienne. Reconnaître l'existence de communs au sein de l'irrigation palestinienne nous permet de traiter l'eau comme un flux. En effet, la même goutte d'eau coule successivement au travers de plusieurs institutions. Certaines sont palestiniennes et d'autres sont israéliennes. Chacune déploie des régimes de propriété définis sur des niveaux d'échelle différents. Cet article examine l'utilité de considérer l'eau comme un flux qui est géré successivement par cette variété d'institutions. Au niveau local, ceci nous permet de comprendre les interactions entre les petits agriculteurs et les agribusiness voisines, par exemple. Ceci nous permet de comprendre les bouleversements au sein des interactions de pouvoir qui ont lieu lorsqu'une économie marchande entre en interaction avec une économie humaine. Au niveau national, ceci nous permet de nous pencher sur la gouvernance des paracommuns. Ce terme désigne les gains matériels qui sont potentiellement générés par l'amélioration de l'efficience au sein de différents systèmes s'approvisionnant tous auprès de la même source d'eau. De tels gains sont forcément dynamiques car l'amélioration de l'efficience au sein d'un système implique souvent une perte pour un système voisin ou pour un système éloigné mais lié au premier. L'ensemble de ces gains matériels potentiels constituent un nouveau commun dont l'appropriation doit être gouvernée. Il s'agit d'un paracommun car il n'existe que si les projets d'amélioration de l'efficience de différents systèmes sont réalisés. Les bailleurs financent massivement de nombreux projets visant à améliorer l'efficience de l'irrigation. Il est maintenant urgent de faire face à la question de la gouvernance des paracommuns de l'irrigation palestinienne. Cet article analyse la façon dont le capital social élaboré au sein des communs existants peut contribuer à cela. Enfin, au niveau international, inclure les institutions émergeant des communs au sein d'une structure institutionnelle qui gère l'eau en tant que flux nous permet de sortir de l'impasse actuelle des négociations concernant l'eau entre Israël et l'Autorité Palestinienne. Cet article détaille la façon dont ceci peut être réalisé.
    Keywords: irrigation,commons,Israeli-Palestinian conflict,paracommons,water governance,communs,conflit israélo-palestinien,paracommuns,gouvernance de l’eau
    Date: 2018–07
  7. By: Iyad Dhaoui (Tunisian Institute for Competitiveness and Quantitative Studies)
    Abstract: This paper assesses the achievements and disparties toward SDGs in MENA countries in two-stage performance analysis. First, we use a descriptive approach and then a composite indicator 'SDG achievement index' (SDGI) for the social develoment in the the region through Principle Component Analysis weighting. After that, the analysis examines the coherence between this index and income per capita. The descriptive analysis and the composite indicator confirm the existence of disparties between the countries of the region in all components of social development. Furthermore, the results reveal consistency between the SDGI and GDP per capita for some countries and inconsistency for others.
    Date: 2019–04–12
  8. By: Saleh, Mohamed; Tirole, Jean
    Abstract: A ruler who does not identify with a social group, whether on religious, ethnic, cultural or socioeconomic grounds, is confronted with a trade-off between taking advantage of the out-group population's eagerness to maintain its identity and inducing it to ``comply'' (conversion, quit, exodus or any other way of accommodating the ruler's own identity). This paper first analyzes the ruler's optimal mix of discriminatory and non-discriminatory taxation, both in a static and an evolving environment. The paper then uses novel data sources to test the theory in the context of Egypt's conversion to Islam between 641 and 1200. The evidence is broadly consistent with the theoretical predictions.
    Keywords: identity taxation; Islam; Laffer Curve; Legitimacy; Poll tax
    JEL: D82 H2 N45 Z12
    Date: 2019–04
  9. By: Shawabkeh, Yazan Taher; AL-Lozi, Musa; Masa'deh, Ra'ed
    Abstract: The aim of this study was to investigate the impact of organizational justice on job commitment in Jordanian ministries. Data were collected through a questionnaire distributed to 450 employees in three Jordanian ministries, namely, the Ministry of Education; Ministry of Health; and Ministry of Awqaf Islamic Affairs and Holy Places. Data were analyzed via descriptive, simple linear regression analysis, and stepwise multiple linear regression analysis. The hypotheses of the research were tested and the probabilities of their acceptance were rejection. Findings revealed a statistically significant impact between organizational justice and job commitimnt. Results also indicated that informational justice has the highest influential effect on employee job commitmint, while procedural justice had the lowest impact on it. Furthermore, this study reports differences between the dimensions of the (OJ) in their impacts on the dimensions of job commitment. Moreover, the study found that the three dimensions of organizational justice (information justice, personal justice, and distributive justice) combined had a higher predictive capacity of job commitment than that of any independent dimension or two dimensions of organizational justice. In view of the results, the researcher gives some recommendations to the decision makers in Jordanian ministries that may guide them to promote the concept and practice of organizational justice in their ministries such as the need for increasing the levels of organizational justice, especially the distributive justice, and focusing on compatibility of income of the employee with their academic level and practical experience, in addition to necessity of improving the system of rewards in the Jordanian ministries because the rewards have a significant impact on the employees' perception of justice and on her/his interest in supporting her/his colleagues when doing additional work in the ministry. In other respects, this study has practical implications for future research such as attracting attention to the need to study job satisfaction and job engagement as mediatingvariables of association of employee’s job commitment with organizational justice. This is in addition to conducting studies similar to the present one in different environments inside and outside Jordan.
    Keywords: Organizational Justice, Job Commitment, Ministries
    JEL: A2 H71 M12
    Date: 2019–04–01

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