nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2020‒11‒02
sixteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Identification of Wealthy Households from the Residential Property Price Index Database for Sample Selection for Household Surveys By Evren Ceritoglu; Ozlem Sevinc
  2. Return Migration and Earnings Mobility in Egypt, Jordan and Tunisia By Vladimir Hlasny; Shireen AlAzzawi
  3. Do Investment Incentives Promote Regional Growth and Income Convergence in Turkey? By Hulya Saygili
  4. Constructing individual identity within traditional society: The case of young Arabs in Israel, graduates of alternative education By Oriana Abboud Armaly; Moshe Sharabi
  5. Evaluation Design Report for the Secondary Education Activity of the Morocco Education & Training Project By Paolo Abarcar; Emilie Bagby; Galina Lapadatova; Caroline Lauver; Audrey Moore; Matt Sloan
  6. Determinants of Growth Performance of High Growth Firms: An Analysis of The Turkish Manufacturing Sector By Fatma M. Utku-ismihan; M. Teoman Pamukçu
  7. Expressway to Power: Infrastructure Projects and Political Support By Akbulut-Yuksel, Mevlude; Okoye, Dozie; Turan, Belgi
  8. Informal Employment in the Kabylia Region (Algeria): Labor Force Segmentation, Mobility and Earnings By Youghourta Bellache; Omar Babou; Oksana Nezhyvenko; Philippe Adair
  9. What makes Moroccans happy: A micro-data study By Kamal Kasmaoui
  10. Synchronization, Concordance and Similarity between Business and Credit Cycles: Evidence from Turkish Banking Sector By Mehmet Selman Colak; Abdullah Kazdal; Muhammed Hasan Yilmaz
  11. Trade and Exchange Rate Effects: Evidence from Firm-Level Data By Nazire Nergiz Dinçer; Anirudh Shingal; Ayça Tekin-Koru
  12. Formation of inflation expectations: Does macroeconomic and policy environment matter? By Eda Gulsen; Hakan Kara
  13. Examining the Performance of Oman’s Economy By Razzak, Weshah
  14. Civil War Onset, Natural Resource Rents and Social Cohesion By Ibrahim El-Badawi; Hosam Ibrahim; Chahir Zaki
  15. Coronavirus (COVID-19) Crisis: What's the Economic Alternative in Tunisia? By Fridhi, Bechir
  16. Syrian Civil War Victims Trust Each Other, but Punish When and Whomever They Can By El-Bialy, Nora; Fraile Aranda, Elisa; Nicklisch, Andreas; Saleh, Lamis; Voigt, Stefan

  1. By: Evren Ceritoglu; Ozlem Sevinc
    Abstract: This paper aims to identify wealthy households in Turkey for sample selection for household surveys. In the absence of income and wealth tax data, we analyze house prices from the Residential Property Price Index (RPPI), which is constructed by the Central Bank of the Republic of Turkey (CBRT) from dwelling appraisal reports to monitor price movements. RPPI is announced monthly by the CBRT for Turkey and 26 geographical regions at NUTS2 level since 2012, but data actually starts from January 2010. The RPPI database comprises more appraisal observations from Istanbul and western provinces, where house prices are significantly higher than country average. However, the number of appraisal observations is low for the Eastern provinces, since the number of house sales is limited in poor and small provinces. Moreover, the percentage of mortgaged house sales is even lower in these regions, whereas the RPPI database is based on dwelling appraisal reports on house sales, which are subject to mortgage loans.
    Keywords: Unit house prices, Wealthy households, Panel data, Sampling design, Oversampling
    JEL: C33 C83 R21 R31 R32
    Date: 2020
  2. By: Vladimir Hlasny (UN ESCWA); Shireen AlAzzawi (Santa Clara University)
    Abstract: We examine the role of cross-border return migration in the intertemporal and intergenerational transmission of status across seven surveys from Egypt, Jordan and Tunisia. We use transition matrices and instrumental variable regressions to link prime-age men’s present outcomes to those in prior years and to their fathers’ outcomes. Earnings in prior years are inferred using job-type and occupation-group cell means. We find that return migrants land higher-earning jobs and are more inter-generationally mobile. However, they outperform non-migrants not only currently but even in past years. Controlling for mitigating factors, the role of migration disappears, suggesting that individual-level effects and demographics are responsible.
    Keywords: Return migration, intergenerational socioeconomic mobility, MENA
    JEL: F22 O15 R23 J61 J62
    Date: 2020–10
  3. By: Hulya Saygili
    Abstract: This paper contributes to the literature on the growth and income convergence effects of investment incentives in Turkey in four ways: Firstly, it uses the most recent investment incentives data from 2004-2018 for 81 provinces grouped into 6 regions. Secondly, it investigates the significance of the lagged impact of investment incentives. Thirdly, it applies Prais-Winsten regressions with heteroskedastic panels-corrected standard errors (PCSE) to address autocorrelation, heterogeneity, and endogeneity problems in a panel context. Fourthly, in addition to neoclassical conditional Beta-convergence, it modifies the Sigma-convergence approach to investigate the direct impact of investment incentives directly on regional convergence. The estimation results indicate convergence, but investment incentives have significant time-lagged impacts in relatively high income regions only.
    Keywords: Regional income convergence, Regional investment incentives, Panel data analysis, Turkey
    JEL: R11 R50 O47 C23
    Date: 2020
  4. By: Oriana Abboud Armaly (Yezreel Valley College); Moshe Sharabi (Yezreel Valley College)
    Abstract: Studies on Arab society as a minority group in Israel, most often deal with the role of identity in the Arab-Israeli conflict and minority-majority relations. While the fact that Arab society in Israel is a minority ruled by a Jewish majority is of great importance, it is not the sole factor that influences and shapes processes within Arab society. As such, this study examined the intra group relations within Arab minority in Israel.Identity touches on how individuals and societies perceive themselves within conflict, and it also forms a link between the individual and society (Burke & Stets, 2009). The present study examined the conflict between the individual identity and the social identity of young Arabs, graduates of alternative education, that encouraged them to intellectually and normatively differentiate themselves from the Arab society. Method: Semi-structured interviews were conducted with 26 young men and women from the Arab society, Christians and Muslims, aged 18-25. The interviews were analyzed using two combined methods: content analysis and structural analysis.The findings suggest that the alternative educational experience fostered a normative intra-group conflict, and identity conflict at the individual level. Findings: a) Individual identity was constructed within Alternative education as "incubator", saturated with dialogue and critical pedagogy. b) Meeting traditional Arabic society, the young people face ideological and behavioral gaps. c) Identity conflict accrue and escalate between their individual identity and their social identity. d) The young cope with conflict using four main strategies: Verbal dialogue, "Dialogue through actions", Placation and Avoidance. Each strategy is used according to a specific component of the conflict. Apparently, constructing an identity with individualistic characteristics within traditional Arab society is accompanied by a process of socialization and loyalty to the educational experience, while accompanied by acute conflict between young Arabs and their own traditional society.
    Keywords: Conflict, Identity, Intragroup relations, Alternative education, Individualism, Arab society
    JEL: I21
  5. By: Paolo Abarcar; Emilie Bagby; Galina Lapadatova; Caroline Lauver; Audrey Moore; Matt Sloan
    Abstract: In this report we describe a mixed-methods evaluation to assess the effects of the MCC-funded Secondary Education Activity in Morocco.
    Keywords: Morocco, Secondary Education, Evaluation Design Report, RCT, Implementation study, ERR
  6. By: Fatma M. Utku-ismihan (Ministry of Agriculture and Forestry); M. Teoman Pamukçu (Middle East Technical University, Ankara, Turkey)
    Abstract: Due to their important contribution to overall growth performance of economies policy makers have attributed great importance to high growth firms (HGFs). In order to examine and support their efforts, researchers have tried to identify the factors that initiate and promote the growth performance of HGFs. However, this is not a simple task since the factors that contribute to the growth performances of firms seem to vary across sectors and countries. This study examines the characteristics of HGFs and attempts to identify those factors that stimulate HGFs in the Turkish manufacturing sector using a rich firm-level dataset over the period 2003-2014.
    Date: 2020–10–20
  7. By: Akbulut-Yuksel, Mevlude (Dalhousie University); Okoye, Dozie (Dalhousie University); Turan, Belgi (University of Houston)
    Abstract: This paper provides causal evidence on how political parties consolidate power in an electoral democracy. We collect administrative data on expressway construction by the Justice and Development Party (AKP) in Turkey, and use province-by-year variation in expressway construction to show that vote shares for the AKP increased in response to the expressways. For the average province in which the length of the expressway network increased from 51km to 193km, the estimates imply that the expressway expansion increased the AKP's vote share by 4.2 percentage-points or one-third of the increase from 2002 to 2011. Electoral gains by the AKP primarily came at the expense of its more established rivals. The estimates account for province and year fixed effects, which allows us to control for any fixed province characteristics and time-specific factors that might be related to expressway expansion and vote shares. We further show that the estimates are robust to arbitrary region-specific time trends, province-specific quadratic time trends, and are not driven by province-by-year variation in other investments undertaken by the AKP. Examining mechanisms, we do not find evidence that increased economic growth due to the express-ways drove increased vote shares for the AKP. We find evidence that the visibility and success of the expressway expansion project signalled competence and stability. The electoral benefits of the expressway were stronger in provinces that experienced greater political instability between 1995 and 2002, losses for the rival parties were greater in provinces they previously controlled indicating changes in perception, and there were no similar electoral gains to less visible projects.
    Keywords: expressways, political economy, voting, Turkey
    JEL: H54 N45 N95 O18 P16
    Date: 2020–10
  8. By: Youghourta Bellache (University of Bejaia); Omar Babou (Université of Tizi-Ouzo); Oksana Nezhyvenko (National University of Kiev Mohyla Academy, Ukraine. ERUDITE); Philippe Adair (University Paris-Est Créteil, France. ERUDITE)
    Abstract: This investigation on informal employment uses a pooled sample of 3,290 workers from two household surveys conducted at a regional level, which proves quite representative and the only one of its kind in Algeria. First, multinomial logistic regressions applied to the overall sample capture the individual determinants of access to the formal vs. informal segments of the labour market. Being a young single female with low educational attainment increases the likelihood of informal employment. Second, two subsamples show that labour market segmentation does not preclude occupational mobility of three out of five workers, which occurs most often from informal segments towards formal segments, due to age (youth), gender (female) and (low) educational attainment. Third, earnings functions analyse the determinants of wages for the subsample of 1,753 formal and informal employees (twenty per cent, among which three out of five are males). The wage gap between formal and informal employees, over twenty-five per cent, may be due to the difference in human capital and is higher among men than among women. The gender pay gap is higher in formal employment than in informal employment. Last, a decomposition model disentangles the explained and unexplained parts of the formalinformal employees segmentation (over two thirds are explained, rather from the supply-side than from the demand-side), as well as the male/female divide, whereby unexplained variables account for the highest share.
    Date: 2020–09–20
  9. By: Kamal Kasmaoui (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau)
    Abstract: Using data from the latest wave (2010-2014) of the World Values Survey, we examine the relationship between subjective well-being and its micro-determinants in Morocco. We use life satisfaction as a measure of subjective well-being. Our results show that the main factors of subjective well-being in Morocco are: state of health, income scale, educational attainment and freedom of choice. Our empirical analysis shows that there is a slight difference in terms of results between the OLS and Ordered Probit approaches used in this work to estimate the satisfaction function.
    Keywords: Subjective well-being,Life satisfaction,Morocco
    Date: 2020–10–03
  10. By: Mehmet Selman Colak; Abdullah Kazdal; Muhammed Hasan Yilmaz
    Abstract: In this study, we provide a comprehensive quantification of the co-movement between credit and business cycles in the Turkish case for the period 2007-2020. To this end, we construct synchronization, concordance and similarity index, which aim to measure the time-varying degree of coherence between credit and output dynamics. In specific, these indices are designed to capture the location, momentum and size aspects of the cyclical correlation respectively. Our empirical analysis also covers the cyclical association of 13 different loan sub-categories with the course of the output gap by employing disaggregated data. Overall, index results show that credit-output nexus in the Turkish case present heterogeneities across loan types, sample episodes and cyclical characteristics (location, momentum, and size). We also examine the impact of local and global macroeconomic and financial factors on cyclical coherence by utilizing Tobit regressions. The empirical results indicate that movements in local financial conditions, fluctuations in macroeconomic volatilities, and the course of capital flows are influential determinants of cyclical co-movements.
    Keywords: Credit cycle, Business cycle, Synchronization, Filtering, Tobit regression
    JEL: G21 E32 C35 C38
    Date: 2020
  11. By: Nazire Nergiz Dinçer (TED University); Anirudh Shingal (European University Institute, Florence and World Trade Institute, University of Bern); Ayça Tekin-Koru (Australian College of Kuwait)
    Abstract: We estimate an augmented gravity model using a firm-level database on Turkish firms to revisit the trade-exchange rate relationship over 2003-2015 at the intensive export margin. Besides several additional layers of analysis made possible by unique attributes of our firmlevel database, we also examine exchange rate effects separately for firms engaged in manufacturing and services activities, which is a significant departure from existing literature. Our findings suggest considerable heterogeneity in the exchange rate effects on exports at the intensive margin. On the whole, for existing trade flows, more GVC-intensive production is found to attenuate the effect of an exchange change, especially for the servicesintensive firms in the sample.
    Date: 2020–10–20
  12. By: Eda Gulsen (Central Bank of Turkey); Hakan Kara (Bilkent University)
    Abstract: This paper investigates the changing behavior of inflation expectations in response to the macroeconomic and policy environment. Using a panel of professional forecasters covering thirteen years of inflation targeting period from Turkey, we present evidence on the behavioral shifts in the inflation expectations associated with evolving macroeconomic and policy performance. We use a unique survey with the feature of including matched policy rate and fixed-horizon inflation expectations at the individual level, therefore enabling to estimate the impact of monetary policy surprises on inflation expectations without reliance on strong identifying assumptions. Moreover, we employ a novel technique where direct feedback from survey respondents is used to determine the baseline empirical model governing expectations dynamics. Interpretation of the empirical findings joint with the direct feedback results from the survey indicate that the anchoring power of inflation targets depend on the policy performance. The weights attached to inflation targets in forming expectations are strongly associated with the size of the inflation deviation from the targets. When the targets no longer serve as a strong anchor, the survey participants assign increasingly higher weight to past inflation and the relationship between exchange rates and inflation expectations becomes stronger. Overall, our results imply that expectations behavior display significant and rapid shifts with the underlying economic and policy performance.
    Keywords: Inflation expectations; Monetary policy; Inflation; Survey data.
    JEL: C51 C53 E31 E37 E58
    Date: 2020–10
  13. By: Razzak, Weshah
    Abstract: We examine the economic performance of Oman’s economy over the period from 1998 to 2016, where data are readily available. Our focus is on the performance of the non-hydrocarbon sector (NHC sector) relative to the hydrocarbon sector (HC sector), nominal versus real GDP growth, productivity measures, the drivers of growth, and the return to investments. We also compare Oman non-hydrocarbon sector performance to Dubai, which is the closet non-oil economy. We have a number of finding that could help policymakers.
    Keywords: Productivity, (un) skilled labor, investments, Oman, Dubai
    JEL: E0 E01 E22 E23 E24
    Date: 2020–10–08
  14. By: Ibrahim El-Badawi (Economic research forum); Hosam Ibrahim (International Food Policy Research Institute); Chahir Zaki (Cairo University and ERF)
    Abstract: This paper examines the nexus between civil war onset, natural resource rents, and social cohesion. Indeed, the main hypothesis is centered on the role of the hydrocarbon resource in promoting conflicts, especially in societies characterized by discrimination. Hence, using a comprehensive dataset, this paper’s contribution is twofold. First, we test the non-linear effect of institutions and rents on the likelihood of civil war onset. Second, we introduce several measures of social cohesion and institutions. Our main findings show that both political institutions and rents have a non-linear effect on the outbreak of civil wars. Moreover, social cohesion variables measured by the share of discriminated population increases the probability of a civil war onset. These results remain robust in different econometric specifications, various estimation techniques and diverse measures.
    Date: 2020–09–20
  15. By: Fridhi, Bechir
    Abstract: Our article introduces a coronavirus (COVID-19) pandemic impact on the economy from a variety of dimensions such as economic outlook, growth shock, the role of regulators and proposed long term strategies. This paper also analyzes the impact of the coronavirus (COVID-19) pandemic on the growth of the economy and the Imperative to Establishing a New Global Economic Order. Also, this study used the secondary published data from International financial institutions such as World Bank (WB) and International Monetary Fund (IMF) as to describe the current growth and also predict the post-COVID economic growth of Tunisia. How did a health crisis translate to an economic crisis? Why did the spread of the coronavirus bring the global economy to its knees? The answer lies in two methods by which coronavirus stifled economic activities. First, the spread of the virus encouraged social distancing which led to the shutdown of financial markets, corporate offices, businesses and events. Second, the exponential rate at which the virus was spreading, and the heightened uncertainty about how bad the situation could get, led to flight to safety in consumption and investment among consumers, investors and international trade partners. We focus on the period from the start of 2020 through June, when the coronavirus began spreading into other countries and markets. We draw on real-world observations in assessing the restrictive measures, monetary policy measures, fiscal policy measures and the public health measures that were adopted during the period.
    Keywords: Coronavirus (COVID-19),Economic Shock,Financial crisis,Governance,Global Recession
    JEL: G21 G28 I11 I18
    Date: 2020
  16. By: El-Bialy, Nora; Fraile Aranda, Elisa; Nicklisch, Andreas; Saleh, Lamis; Voigt, Stefan
    Abstract: The civil war in Syria has been raging since 2011. We ask whether civil war experience affects voluntary cooperation and its coordination by means of peer punishment. To answer that question, we ran experiments with Syrians and Jordanians, and use a victimization index to measure the individual war exposure among Syrians. Despite being more trusting, severely victimized Syrians tend to be less cooperative when subsequent peer punishment is possible. Severely victimized participants punish whenever possible, not distinguishing between their opponent s decisions. Our findings show that experiencing extreme violence deteriorates the adequate use of sanctioning mechanisms.
    Keywords: Civil war,Victimization,Trust,Cooperation,Punishment
    JEL: C72 C93 D91 O15 Z13
    Date: 2020

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