Economic Research Forum (ERF)

November

Did the Egyptian protests lead to change?

Egypt’s period of euphoria following the toppling of Mubarak in 2011 was followed by the sobering realities of the political transition process. This column reports research showing how a wave of dissatisfaction overtook the popular mood, providing support for the conservative backlash in the presidential elections of 2012.

Harnessing technology for export growth by small businesses

What policy actions can help small and medium-sized enterprises (SMEs) to enhance their integration into the global market for goods, services and ideas? This column outlines recommendations in a new book on the opportunities and challenges facing SMEs in developing countries, focusing in particular on the role of digital technology in supporting SMEs in Arab economies to export and grow.

Vocational training fails the cost-benefit test: evidence from Turkey

Rising unemployment in Turkey during the global financial crisis prompted the government to expand its provision of free vocational training. This column reports an evaluation of the newly introduced programme, which finds that the costs of training the unemployed exceeded the benefits.

Arab oil exporters: coping with a new global oil order

What are the implications of recent developments in global oil markets for the oil-exporting countries of the Arab region? This column outlines key issues discussed at an ERF conference hosted by the Arab Fund for Economic and Social Development in Kuwait in November 2017.

Effectiveness of export sanctions: evidence from Iran

Whether export sanctions are effective depends on their goal. This column highlights that if the goal is to reduce total exports of the targeted country, sanctions may be less effective as exporters can redirect their exports from one destination to another. But if the goal is to put pressure on exporters in the targeted country, then sanctions can be effective as exporters incur welfare losses while redirecting exports to new destinations.

From energy subsidies to universal basic income: lessons from Iran

In December 2010, Iran introduced an ambitious energy subsidy reform that combined large price increases for fuel with generous cash transfers. This column explains the key lesson: that despite severe flaws in the programme’s implementation, it is possible to reduce the distortions caused by cheap energy and offer citizens a minimum basic income that is not excessively harmful to work incentives.

Foreign investment and domestic production complexity in Turkey

Inflows of foreign direct investment can act as a catalyst for domestic firms to develop sophisticated manufacturing products, according to evidence from Turkey presented in this column. The authors conclude that investment promotion policies can play a key role in facilitating upgrading of the national production structure.

Arab development as freedom

There is widespread discontent and social unrest in the Arab world, a direct result of decades of failed economic and political transitions led by largely autocratic regimes. This column argues that economic development thinkers and practitioners need to present credible alternatives for a new Arab society that meets citizens’ aspirations and restores their essential freedoms.

Inflation targeting and exchange rate flexibility in Egypt

The degree of exchange rate flexibility within an inflation targeting framework matters in emerging economies. This column reports research that quantifies the impact of different approaches to the conduct of monetary policy on inflation and output variability in Egypt.

Policies to reduce air pollution in Cairo

Vehicle exhaust fumes are a major cause of air pollution in megacities like Cairo. This column outlines the policies that the Egyptian authorities have introduced in an effort to cut emission rates and raise the costs to users of polluting vehicles. Air pollution has been reduced but much remains to be done, notably investing in an effective public transport system.

Return migration and gender norms: evidence from Jordan

Migration can be responsible for the spread of new social norms about gender roles. This column explores the impact of temporary migration from Jordan to more conservative and highly unequal neighbouring countries. The results indicate that women in households with a return migrant become more conservative themselves.

Lebanon’s challenge of fiscal sustainability

New legislation by the Lebanese government, which provides a big boost to the salaries of public sector employees, puts considerable pressure on the country’s public finances. This column outlines the potential impact on inflation, interest rates, the balance of payments and the exchange rate – and the kind of austerity measures that are needed to restore fiscal sustainability without too much damage to potential economic growth.

Does political conflict hurt trade? Evidence from consumer boycotts

The use of trade policy tools such as boycotts, embargoes and sanctions has become increasingly prevalent in international conflicts. This column reports research that examines the impact of politically motivated consumer boycotts on trade relations. The two examples are conflicts between China and Japan; and between Denmark and the Muslim world.

Housing policy and marriage: evidence from Egypt, Jordan and Tunisia

At a time when young people in MENA countries face an increasingly protracted and difficult transition to adulthood, how can housing policy help them to marry and form independent households? This column explains how reforms to the rental housing market in Egypt helped to reverse a trend towards later marriages.

Air pollution and infant mortality: evidence from Turkey

The widespread replacement of coal with natural gas as Turkey’s key energy source over the past 25 years has led to much improved air quality. This column reports research showing that the environmental benefits of the transition to natural gas have resulted in a significant reduction in infant mortality.

Growth without change: MENA needs structural transformation

Although the Southern and Eastern Mediterranean region had been enjoying a decade of relatively high growth just prior to the Arab Spring, the fruits of prosperity remained unequally distributed. This column examines countries’ inability to ignite structural change and start shifting their large and young labour force towards well-paid jobs in the key sectors of a modern economy.

Economic policy management: a new framework for MENA countries

There is a clear need for MENA countries to create policy frameworks that will improve the credibility and effectiveness of economic policy-making. This column outlines the main institutional weaknesses that must be addressed, and the six key elements of a well-structured framework for economic policy management.

Getting more women into private sector jobs

Two interconnected challenges for the Arab countries are how to increase the low participation of women in the labour market and how to reduce a longstanding reliance on the public sector as ‘employer of last resort’, especially for women. This column explains the economic benefits of removing impediments to women’s employment in the private sector.

Most read

Making trade agreements more environmentally friendly in the MENA region

Trade policy can play a significant role in efforts to decarbonise the global economy. But as this column explains, there need to be more environmental provisions in trade agreements in which developing countries participate – and stronger legal enforcement of those provisions at the international level. The MENA region would benefit substantially from such changes.

Iran’s globalisation and Saudi Arabia’s defence budget

How might Saudi Arabia react to Iran's renewed participation in global trade and investment? This column explores whether the expanding economic globalisation of Iran, following the lifting of nuclear sanctions, could yield a peace dividend for Saudi Arabia, consequently dampening the Middle East arms competition. These issues have attracted increased attention in recent times, notably after a pivotal agreement between the two countries in March 2023, marking the resumption of their political ties after a seven-year conflict.

Labour market effects of robots: evidence from Turkey

Evidence from developed countries on the impact of automation on labour markets suggests that there can be negative effects on manufacturing jobs, but also mechanisms for workers to move into the services sector. But this narrative may not apply in developing economies. This column reports new evidence from Turkey on the effects of robots on labour displacement and job reallocation.

Global value chains and domestic innovation: evidence from MENA firms

Global interlinkages play a significant role in enhancing innovation by firms in developing countries. In particular, as this column explains, participation in global value chains fosters a variety of innovation activities. Since some countries in the Middle East and North Africa display a downward trend on measures of global innovation, facilitating the GVC participation of firms in the region is a prospective channel for stimulating underperforming innovation.

Food insecurity in Tunisia during and after the Covid-19 pandemic

Labour market instability, rising unemployment rates and soaring food prices due to Covid-19 are among the reasons for severe food insecurity across the world. This grim picture is evident in Tunisia, where the government continues to provide financial and food aid to vulnerable households after the pandemic. But as this column explains, the inadequacy of some public policies is another important factors causing food insecurity.

Manufacturing firms in Egypt: trade participation and outcomes for workers

International trade can play a large and positive role in boosting economic growth, reducing poverty and making progress towards gender equality. These effects result in part from the extent to which trade is associated with favourable labour market outcomes. This column presents evidence of the effects of Egyptian manufacturing firms’ participation in exporting and importing on their workers’ productivity and average wages, and on women’s employment share.

Sustaining entrepreneurship: lessons from Iran

Does entrepreneurial activity naturally return to long-term average levels after big economic disturbances? This column presents new evidence from Iran on trends in entrepreneurship among various categories of firm size, sector and location – and suggests policies that could be effective in promoting entrepreneurial activities.

Intimate partner violence: the impact on women’s empowerment in Egypt

Although intimate partner violence is a well-documented and widely recognised problem, empirical research on its prevalence and impact is scarce in developing countries, including those in the Middle East and North Africa. This column reports evidence from a study of intra-household disparities in Egypt, taking account of attitudes toward gender roles, women’s ownership of assets, and the domestic violence that wives may experience from their husbands.

Do capital inflows cause industrialisation or de-industrialisation?

There is a clear appeal for emerging and developing economies, including those in MENA, to finance investment in manufacturing industry at home with capital inflows from overseas. But as the evidence reported in this column indicates, this is a potentially risky strategy: rather than promoting industrialisation, capital flows can actually lead to lower manufacturing value added and/or a reallocation of resources towards industries with lower technology intensity.

Financial constraints on small firms’ growth: pandemic lessons from Iran

How does access to finance affect the growth of small businesses? This column presents new evidence from Iran before and during the Covid-19 pandemic – and lessons learned by micro, small and medium-sized enterprises.