nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2021‒09‒20
seven papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Supporting Egypt’s safety net programs for better nutrition and food security, inclusiveness, and effectiveness By CGIAR Research Program on Policies, Institutions, and Markets (PIM)
  2. Future Photovoltaic Electricity Production Targets and The Link to Consumption per Capita on The Policy Level in MENA Region By Mostafa Abdelrashied; Dikshita Bhattacharya
  3. What are the Poverty and Inequality Impacts of Fiscal Policy in Turkey? By P. Facundo Cuevas; Leonardo Lucchetti; Metin Nebiler
  4. Predictive Factors of Withdrawal Behavior among Profit-Sharing Investment Depositors in Morocco: A Qualitative Study from the Perspective of Push-Pull-Mooring Framework By Sana Rhoudri; Lotfi Benazzou
  5. Identifying the Main Factors of Iran's Economic Growth using Growth Accounting Framework By Mohammadreza Mahmoudi
  6. Structural Change Ramifications of Consumer Credit Expansion in a Two Sector Growth Model By Esra Nur Ugurlu
  7. Land for peace? Israel-Palestine through the lens of game theory By Amal Ahmad

  1. By: CGIAR Research Program on Policies, Institutions, and Markets (PIM)
    Abstract: The long partnership between the Government of Egypt and the International Food Policy Research Institute (IFPRI) began in the late 1970s but became much more active with the launch of IFPRI’s Egypt Strategy Support Program (ESSP) in 2016. Over the years, IFPRI’s research, with support from PIM since 2012, has informed important decisions on Egypt’s key safety net programs, including the food subsidy and the national cash transfer programs. This note summarizes some of the most recent outcomes of this work.
    Keywords: EGYPT; ARAB COUNTRIES; MIDDLE EAST; NORTH AFRICA; AFRICA; social protection; nutrition; food security; programmes; inclusion; subsidies; cash transfers
    Date: 2021
  2. By: Mostafa Abdelrashied; Dikshita Bhattacharya
    Abstract: This paper provides an overview of the status of the electricity market in the region, indicating the nexus between electricity consumption with population growth and GDP. It also analyzes the policy portfolio in different countries, indicating some of the in-action policies' effectiveness and recommended alternatives. World Bank datasets were used for the analysis between 2000 and 2014. We found that the MENA region is at an early stage for renewable energy with a high potential for solar energy, making it attractive for investors. However, the high dependency on oil for consumption and exporting might not provide a prosperous environment for renewable technologies to grow. Therefore, a greater focus on decoupling economic growth from energy consumption will have a long-lasting impact on fiscal revenues for net-oil exporting countries. Moreover, the consequences of the decoupling will allow more renewables penetration in the current energy mix enabling many countries to reach their Paris Agreement goals. For short-term energy policy actions, starting a subsidy reform towards the final repeal of subsidies is a must as these measures relate to all end-use sectors and impact fiscal stability in many countries. With its 1.65GW Benban Solar Park in Aswan, Egypt has shown an example of shifting from subsidizing fossil fuel products to commissioning renewable projects to get closer to its Paris Agreement targets.
    Date: 2021–09
  3. By: P. Facundo Cuevas; Leonardo Lucchetti; Metin Nebiler
    Abstract: Fiscal policy is central to not only macroeconomic stability and growth, but also to poverty and inequality reduction. This paper provides the most comprehensive assessment of the distributional incidence of Turkey’s fiscal policy to date. It analyzes the combined and individual incidence of direct and indirect taxes, transfers, and social spending and benchmarks Turkey’s achievements against peer countries. The results show that fiscal policy significantly reduces income inequality in Turkey, driven by social spending on education and health, and complemented by direct taxes and transfer schemes that countervail the inequality-increasing impact of indirect taxes. At the bottom of the income distribution, targeted transfers are insufficient to compensate for the effect of taxes, resulting in net increases in poverty. In the context of upper-middle-income countries, Turkey’s performance is below the median. This is driven by the relatively larger negative impacts of indirect taxes and the more limited positive impacts of direct transfers and taxes. From a policy perspective, the paper contributes to identifying entry points for improving the equity impact of the fiscal package. Among these, targeting the minimum subsistence allowance (AGI) program toward the poor could be an efficient way forward. More broadly, the study represents a platform to simulate the distributional implications of a variety of fiscal changes to inform stakeholders and the policy debate.
    Date: 2020–05
  4. By: Sana Rhoudri (UIT - Université Ibn Tofaïl); Lotfi Benazzou (UIT - Université Ibn Tofaïl)
    Abstract: The main purpose of this study is to examine the determinants of deposit withdrawal behavior amongst profit-sharing deposit account holders. Based on the Push-Pull-Mooring theory, a qualitative study was conducted, with fifteen personal interviews undertaken with profit-sharing investment depositors selected from three participatory banks using a purposive sampling technique. Assessment of the predictive factors determining deposit withdrawal behavior resulted in three categories. The push factors were found to be, in order of decreasing frequency: (1) Sharia non-compliance risk, (2) lower rate of return, (3) deposit guarantee scheme and (4) customer relationship quality failure. The push factors were labeled as (a) conventional term deposit attractiveness, (b) conventional banks history and (c) number of branches. The mooring factors were found to be: (i) religiosity, (ii) switching costs, (iii) third party influence and (iv) involuntary switching factors. This study has limitations that should be considered for future research. First and foremost, all interviewees were selected by the banks' managers. Moreover, they were identified as individual depositors; thus, they displayed opinions, which may differ from those of corporate depositors. Despite the discussed limitations, the findings generated from this study have important implications for researchers, financial marketing managers as well as the policy makers and regulators. In terms of contribution to the body of knowledge, the study aimed to investigate the predictive factors of deposit withdrawal behavior in another context, that of Morocco, which has not yet been explored in the literature. In addition, the findings of this study are critical to financial marketing managers for strategic marketing programs as it stresses the importance of satisfaction dimensions within a dual banking system, as is the case in Morocco. Furthermore, this study provides great indications to the policy makers and regulators on the perception of the Moroccan investment account depositors, in order to develop policies that could improve the participatory banking system in Morocco.
    Keywords: Withdrawal Behavior,Switching Behavior,Profit-Sharing Investment Deposits,Participatory Banks,Push-Pull-Mooring Theory
    Date: 2021–07–30
  5. By: Mohammadreza Mahmoudi
    Abstract: This paper aims to present empirical analysis of Iranian economic growth from 1950 to 2018 using data from the World Bank, Madison Data Bank, Statistical Center of Iran, and Central Bank of Iran. The results show that Gross Domestic Product (GDP) per capital increased by 2 percent annually during this time, however this indicator has had a huge fluctuation over time. In addition, the economic growth of Iran and oil revenue have close relationship with each other. In fact, whenever oil crises happen, great fluctuation in growth rate and other indicators happened subsequently. Even though the shares of other sectors like industry and services in GDP have increased over time, the oil sector still plays a key role in the economic growth of Iran. Moreover, growth accounting analysis shows contribution of capital plays a significant role in economic growth of Iran. Furthermore, based on growth accounting framework the steady state of effective capital is 4.27 for Iran's economy.
    Date: 2021–09
  6. By: Esra Nur Ugurlu (Department of Economics, University of Massachusetts Amherst)
    Abstract: This paper analyzes the structural change implications of consumer credit expansions in a dual-sector open economy growth model. Policy-induced increases in banks’ willingness and ability to lend result in new consumer lending, boosting consumption demand and average wages in the nontradable sector. Under the assumptions of fixed relative wages and mark-up pricing, wage pressures translate into inflationary pressures. The central bank, acting under the sole target of controlling inflation, raises the interest rate to contain inflationary pressures. This intervention causes a real exchange rate appreciation, followed by a loss of international competitiveness in the tradable sector. This way, the model illustrates that consumer credit expansions can trigger premature deindustrialization, shifting sectoral structure in favor of the nontradable sector. The formal model is inspired by the Turkish economy that experienced a notable expansion of consumer credit between 2002-2013.
    Keywords: Consumer credit, structural change, economic growth, inflation targeting, real exchange rate
    JEL: E58 F43 L16 O11 O41
    Date: 2021
  7. By: Amal Ahmad (Department of Economics, University of Massachusetts Amherst)
    Abstract: Why have Israel and the Palestinians failed to implement a “land for peace” solution, along the lines of the Oslo Accords? This paper studies the application of game theory to this question. I show that existing models of the conflict largely rely on unrealistic assumptions about what the main actors are trying to achieve. Specifically, they assume that Israel is strategically interested in withdrawing from the occupied territories pending resolvable security concerns but that it is obstructed from doing so by violent Palestinians with other objectives. I use historical analysis along with bargaining theory to shed doubt on this assumption, and to argue that the persistence of conflict has been aligned with, not contrary to, the interests of the militarily powerful party, Israel.
    Keywords: Israel-Palestine, international conflicts, strategic behavior
    JEL: D74 F51
    Date: 2021

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