nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2019‒09‒30
thirteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Analyzing the Perceptions of Egyptian Youth about the Arab Spring By Fakih, Ali; Ghazalian, Pascal L.
  2. The Arab Inequality Puzzle: The Role of Income Sources in Egypt and Tunisia By Krafft, Caroline; Davis, Elizabeth E.
  3. Legal Architecture and Design for Gulf Cooperation Council Economic Integration By Bashar H. Malkawi
  4. The educational consequences of migration for women and men. Migrant and Europe-born Turkish origin people compared to non-migrants in Turkey By Bayrakdar, Sait; Güveli, Ayse
  5. The Effect of Oil Price on United Arab Emirates Goods Trade Deficit with the United States By Osama D. Sweidan; Bashar H. Malkawi
  6. Panel Modeling of Z-score: Evidence from Islamic and Conventional Saudi Banks By Ghassan, Hassan B.; Guendouz, Abdelkarim
  7. Integration Costs and Missing Women in Firms By Conrad Miller; Jennifer Peck; Mehmet Seflek
  8. The Design and Operation of Rules of Origin in Greater Arab Free Trade Area: Challenges of Implementation and Reform By Bashar H. Malkawi; Mohammad I. El-Shafie
  9. Facts on Business Dynamism in Turkey By Ufuk Akcigit; Yusuf Emre Akgunduz; Seyit Mumin Cilasun; Elif Ozcan Tok; Fatih Yilmaz
  10. Sociologic Factors and Social Structure in Preparation of Tax Acts and The Assessment of Personal Income Tax in Terms Of Suitability to Social Structure By Ahmet Ak
  11. Removing Fossil Fuel Subsidies to Help the Poor By Haqiqi, Iman; Yasharel, Sepideh
  12. Monitoring and Forecasting Cyclical Dynamics in Bank Credits: Evidence from Turkish Banking Sector By Mehmet Selman Colak; Ibrahim Ethem Guney; Ahmet Senol; Muhammed Hasan Yilmaz
  13. Les enjeux de la réforme du régime de change du Maroc By Sylviane Guillaumont Jeanneney

  1. By: Fakih, Ali (Lebanese American University); Ghazalian, Pascal L. (University of Lethbridge)
    Abstract: Egyptian youth played a central role in the Arab Spring (AS) uprisings, yearning for changes in the political system and for better economic conditions. This paper investigates the perceptions of young Egyptians about the AS. The empirical analysis uses a bivariate ordered probit model to examine the factors influencing these perceptions through proxies that cover political, social, and economic conditions. The results reveal that social values and ideological characteristics matter more than the standard socio-economic attributes in understanding the perceptions of young Egyptians. They indicate that individuals with secularist, non-traditionalist, and gender equality inclinations formed more favourable perceptions about the AS. Also, they suggest that the AS has led to unfavourable perceived circumstances for the Arab Nationalism and pan-Islamism ideologies, and propitious perceived conditions for further connection with the global system. These findings signal that the AS may have set a path toward a significant transformation in the Egyptian society.
    Keywords: Arab Spring, Egypt, youth, perceptions, social change, bivariate ordered probit
    JEL: A13 P48 Z13
    Date: 2019–09
  2. By: Krafft, Caroline; Davis, Elizabeth E.
    Abstract: Egypt and Tunisia are perceived to have high levels of inequality, yet based on standard measures, inequality in these two countries is not unusually high. In this study we explore a new dimension of inequality in Egypt and Tunisia by using a more complete measure of income and decomposing inequality by income sources (factor components). We find that higher-income households have more income sources than lower-income ones. Informal wage work and earnings from household enterprises are more common in Egypt than Tunisia, while formal wage work, pensions, and social assistance are more common in Tunisia. Social assistance does little to offset income inequality in either country. Enterprise earnings (in Egypt) and agricultural earnings (in Tunisia) as well as rent and other capital income in both countries play a large role in inequality. High inequality in these non-wage income sources may help explain why inequality is perceived to be high.
    Keywords: Income inequality,inequality decomposition,wages,Egypt,Tunisia
    JEL: D31 O15 P46
    Date: 2019
  3. By: Bashar H. Malkawi
    Abstract: The Cooperation Council for the Arab States of the Gulf (GCC) is generally regarded as a success story for economic integration in Arab countries. The idea of regional integration gained ground by signing the GCC Charter. It envisioned a closer economic relationship between member states.Although economic integration among GCC member states is an ambitious step in the right direction, there are gaps and challenges ahead. The best way to address the gaps and challenges that exist in formulating integration processes in the GCC is to start with a clear set of rules and put the necessary mechanisms in place. Integration attempts must also exhibit a high level of commitment in order to deflect dynamics of disintegration that have all too often frustrated meaningful integration in Arab countries. If the GCC can address these issues, it could become an economic powerhouse within Arab countries and even Asia.
    Date: 2019–09
  4. By: Bayrakdar, Sait; Güveli, Ayse
    Abstract: Research commonly compares the educational outcomes of migrants and the second generation to their native peers in destination countries, often finding the former groups lagging behind in education. Their outcomes are rarely compared to their non-migrant peers in the origin countries. Using the dissimilation from origins perspective, we ask whether Turkish-origin men and women in Europe benefit from migration by comparing their educational outcomes to non-migrants in Turkey. At the same time, we comparatively examine the intergenerational transmission of education to determine whether individuals are better off than their parents and grandparents. Analysing the novel 2000 Families data, we show that migrants and their descendants in Europe obtain higher education than their nonmigrant peers in Turkey. While both men and women experience educational benefits from migration, women’s gains are higher. Another salient finding is that Turkish-origin parents in Europe are less able to pass on their socioeconomic resources to their children than their counterparts in Turkey. Overall, the findings corroborate the theory of the dissimilation of Turkish-origin Europeans from their Turkish peers in educational attainment.
    Date: 2019–09–23
  5. By: Osama D. Sweidan; Bashar H. Malkawi
    Abstract: We seek to investigate the effect of oil price on UAE goods trade deficit with the U.S. The current increase in the price of oil and the absence of significant studies in the UAE economy are the main motives behind the current study. Our paper focuses on a small portion of UAE trade, which is 11% of the UAE foreign trade, however, it is a significant part since the U.S. is a major trade partner with the UAE. The current paper concludes that oil price has a significant positive influence on real imports. At the same time, oil price does not have a significant effect on real exports. As a result, any increase in the price of oil increases goods trade deficit of the UAE economy. The policy implication of the current paper is that the revenue of oil sales is not used to encourage UAE real exports.
    Date: 2019–09
  6. By: Ghassan, Hassan B.; Guendouz, Abdelkarim
    Abstract: Several studies on the banking sector have shown that Islamic banks are more financially robust and stable compared to conventional banks, mostly in periods of financial crises. The aim of this research is to measure and compare the level of stability between Islamic and conventional banks in Saudi Arabia using quarterly data. The sample covers around two-thirds of banks operating in the Saudi stock market, and data comprises the last global financial crisis. The panel data model shows that Islamic banks relatively reduce the financial stability index; meanwhile, they contribute efficiently to enhance financial stability through the diversification of their assets. According to our findings Riyad Bank and SAMBA positively impact the financial stability, while Al-Rajhi bank has a positive but moderate role in enhancing the banking stability. As well, the Saudi banking sector exhibits a weak competitiveness which negatively impact the banking stability. Consequently, the limited presence of Islamic banks in the Saudi banking sector menaces any efforts to improve the financial stability.
    Keywords: Islamic Banks, Financial Crisis, Financial Stability, Z-score Model, Saudi Arabia.
    JEL: C12 C23 G21 G28 G33
    Date: 2018–02–03
  7. By: Conrad Miller; Jennifer Peck; Mehmet Seflek
    Abstract: Where social norms favor gender segregation, firms may find it costly to employ both men and women. If the costs of integration are largely fixed, firms will integrate only if their expected number of female employees under integration exceeds some threshold. Motivated by a simple model of firm hiring, we develop a methodology that uses the distribution of female employment across firms to estimate the share of firms with binding integration costs and counterfactual female employment at all-male firms. We validate our approach using administrative data and unique policy variation from Saudi Arabia. We provide suggestive evidence that integration costs reduce aggregate female employment. Using survey data on manufacturing firms in 65 countries, we find significant integration costs in the Middle East, North Africa, and South Asia but not in other regions.
    JEL: J16 J23 J71 O53
    Date: 2019–09
  8. By: Bashar H. Malkawi; Mohammad I. El-Shafie
    Abstract: Rules of origin (ROO) are pivotal element of the Greater Arab Free Trade Area (GAFTA). ROO are basically established to ensure that only eligible products receive preferential tariff treatment. Taking into consideration the profound implications of ROO for enhancing trade flows and facilitating the success of regional integration, this article sheds light on the way that ROO in GAFTA are designed and implemented. Moreover, the article examines the extent to which ROO still represents an obstacle to the full implementation of GAFTA. In addition, the article provides ways to overcome the most important shortcomings of ROO text in the agreement and ultimately offering possible solutions to those issues.
    Date: 2019–09
  9. By: Ufuk Akcigit; Yusuf Emre Akgunduz; Seyit Mumin Cilasun; Elif Ozcan Tok; Fatih Yilmaz
    Abstract: In this paper, we investigate various trends on competition and business dynamism in the Turkish manufacturing sector. More speci?cally, using micro level administrative data sets of ?rm balance sheets, credit registry and social security records, we focus on moments such as ?rm entry, exit, pro?tability, worker reallocation, labor share, labor productivity and credit distributions, among several others. Our results indicate that business dynamism in the Turkish manufacturing sector was relatively stable and even improving until 2012 but has been declining since then. We ?nd that market concentration and exit rates have started to rise, yet new business creation, labor share of output and economic activities of young ?rms have declined. Using a model with endogenous market competition, we show that an adverse shock to cost of R&D investment can explain these empirical trends. We identify increases in ?nancing costs after 2012 of followers as a potential mechanism for our ?ndings in Turkey. We next perform a policy analysis with our model which suggests that providing support (e.g., R&D subsidy) to immediate followers can undo the adverse effects of the negative shock to ?nancing costs and therefore foster competition and faster growth.
    Keywords: Business dynamism, Market concentration, Competition, Turkish economy
    JEL: E22 E25 L12 O31 O33 O34
    Date: 2019
  10. By: Ahmet Ak (Ankara Haci Bayram Veli University)
    Abstract: Social state law has a need to regular fiscal source to maintain its sovereignty and to fulfill the duties the Constitution levies. Fort his reason, use of taxation power is a political obligation. The regulations related to tax concerns the whole society. Tax acts has a lot of features not included in other many acts. The most important one of these is that tax acts have to show a suitable change to the economic life altering constantly. In every society, if the rules found or created are not suitable to expectations, necessities and conditions of a society in a specified time period, the society makes them out of order eventually whatever compeller power of them is inflexible and decisive. While acts are prepared, it is compulsory to determine the real needs by observing the society studiously. Because tax acts have to be especially suitable to the fundamentals of moral and personal interest. In legislating, changing or annulment of tax acts, it has to be cared social structure, market conditions, and suitability to menatlity and beliefs of the society rather than concrete or abstract reasons. Otherwise, even force or sanctions becomes insufficient in obeying the law. In this study, it is aimed to search what sociologic factors are in legislation of acts and suitability of tax acts to social structure as is in other acts and to reveal tax acts by considering the regulations related to Turkish Personal Income Tax Act and literature review method is used as research method.
    Keywords: Keywors: Tax Law,Tax Acts,Social Structure and Taxes,Tax Law Designing,Tax Law Drafting,Income Tax
    Date: 2018–11–30
  11. By: Haqiqi, Iman; Yasharel, Sepideh
    Abstract: Phasing out energy subsidies may increase the price of energy and adversely affect the poor. However, the households may benefit from the redistribution of the revenue from this policy in the economy. Here, we investigate the impacts of phasing out energy subsidies and direct transfer of the policy revenue to households. Employing a Computable General Equilibrium model, we measure the impacts on labor-leisure choice and on labor supply. Considering the Foster-Greer-Thorbecke index and the Food Ratio Method, we construct several poverty indices: the Gini index, the ratio of none-food expenditures to food expenditure, the ratio of income of the richest decile to the poorest decile, and the ratio of income of the two richest deciles to the two poorest deciles. We analyze the effects of an increase in energy prices and direct transfer of revenues to the households in the Iranian economy. The findings suggest a considerable improvement in income distribution and a significant improvement in food to non-food ratio. The results also show an improvement in rural-urban income distribution.
    Keywords: food security; income distribution; poverty; computable general equilibrium
    JEL: C68 D31 D58 D63 Q25 Q43
    Date: 2018
  12. By: Mehmet Selman Colak; Ibrahim Ethem Guney; Ahmet Senol; Muhammed Hasan Yilmaz
    Abstract: Credit growth rate deviating from its long-run trend or equilibrium value holds importance for policymakers given the implications on economic activity and macro-financial interactions. In the first part of this study, the main aim is to construct indicators for determining the episodes of moderate-to-excessive credit slowdown and expansion by utilizing time-series filtering methods such as Hodrick-Prescott filter, Butterworth filter, Christiano-Fitzgerald filter and Hamilton filter over the time period 2007-2019. In addition to filtering choices, four different credit ratios (which are credit-to-GDP ratio, real credit growth, logarithm of real credit, credit impulse ratio) are included in the methodology to ensure the robustness. This framework enables one to generate monitoring tools for not only total loans, but also for financial intermediation activities with different loan breakdowns regarding type, sector and currency denomination. Moreover, industry-based dynamics of commercial loans are examined by using micro-level Credit Registry data set. In the following part, the credit cycle implied by macroeconomic dynamics are investigated by using factor-augmented predictive regression models. In this context, factors representing the global economic developments, banking sector outlook, local financial conditions and economic growth tendencies are created from large data set of 107 time series by utilizing principal component analysis. Analysis conducted for January 2009-April 2019 interval seems to be in line with exogenous shocks affecting the credit market in the corresponding period. To gain more knowledge about the predictive power of factor-augmented regression models, out-of-sample forecasting exercises are performed. It is found that global forces and economic activity provide substantial improvement in terms of predictive power over simple autoregressive benchmark models given low level of relative forecast errors.
    Keywords: Credit cycle, Macroeconomic dynamics, Filtering, Factor models, Forecasting
    JEL: G21 E51 C38 C53
    Date: 2019
  13. By: Sylviane Guillaumont Jeanneney (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Etudes et de Recherche en Droit de l'Immatériel - UP1 - Université Panthéon-Sorbonne - UP11 - Université Paris-Sud - Paris 11)
    Abstract: Le choix d'un régime de change par un pays en développement est toujours une décision difficile. Le taux de change réel qui exprime le prix relatif des biens locaux par rapport aux prix des biens étrangers, et plus généralement le prix des biens faisant l'objet du commerce international par rapport aux biens n'en faisant pas l'objet ou biens domestiques, influence l'ensemble de la structure des prix et ce faisant exerce des impacts multiples, financiers, économiques et sociaux. Quant au choix de son régime des changes le Maroc semble à la croisée des chemins.
    Date: 2019–09–13

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