Economic Research Forum (ERF)

February

Religion as a catalyst for trade: evidence from Turkish exports

Does religious affinity help firms to get access to foreign markets? This column reports evidence that sharing Islamic beliefs with potential customers abroad eases the first-time access to export markets of manufacturing firms active in Turkey. The nexus between religiosity and trade may help to explain the recent tightening of Turkey’s trading relationship with the Muslim world – and between Muslim-majority countries more generally.

Improving the economic policy debate in the MENA region

The Forum, a policy portal for the Middle East and North Africa, was launched in October 2017 with the aim of becoming ‘the platform’ for rich and relevant debates in the region on economic, social and political development issues. This column reviews progress to the end of 2018.

On autocracy, democracy and populism: Tunisia and the wider Arab region

Different circumstances offer different opportunities for the emergence of populism. This column contrasts the rise of populist movements in the established democracies of the West with the uprisings against entrenched autocracies in the Arab region. While many of the latter have been reversed or sparked civil conflict, there is hope in Tunisia’s gradual transition towards consolidating a fully-fledged democracy.

Electoral participation in Turkey: what drives high voter turnout?

Well-functioning democracies and economies require voters that evaluate the economic performance of governments and reward or punish them accordingly. For that reason, low and steadily declining electoral participation in North America and Western Europe is viewed with alarm. There is no such tendency in Turkey, where the turnout rate is about twice as high as in many industrialised countries. This column discusses key factors that determine electoral participation in Turkey.

Equity capital inflows, corporate finance and growth in emerging economies

Studies of the relationship between foreign investor participation in public equity markets and aggregate economic activity in emerging economies find strong effects on productivity, investment, economic growth and the price of publicly traded stocks – but it is not clear why. This VoxEU column shows that equity capital inflows increase the supply of funding available to firms in emerging economies, encouraging them to obtain more equity financing to invest and expand. Large firms benefit most from the inflows.

Ownership structure and multinationals’ productivity: evidence from Turkey

Evidence is mixed on the effects of multinational activity on productivity and competitiveness in host economies. This column provides new evidence that previous estimates of the effects of multinationals on productivity may have been under-estimated. Analysis of data from Turkey’s manufacturing census suggests that the ownership structure of multinationals and foreign acquisitions play an important role in driving aggregate productivity growth.

Fiscal policy in the GCC countries: towards ensuring sustainability

The countries of the Gulf Cooperation Council (GCC) are all seeking to promote diversification of their economies away from continued dependence on the energy sector, yet oil prices remain the main driver of economic growth in the region. This column discusses how the GCC countries should respond to the ‘new normal’ of ‘low for long’ oil prices, with a goal of supporting growth while ensuring fiscal sustainability and macroeconomic stability.

Most read

Sanctions and carbon emissions in Iran

How are Iran’s energy use and emissions of carbon dioxide affected by the imposition of economic sanctions? This column summarises new research that analyses a range of different scenarios and which takes account of multiple economic, social and environmental dimensions, notably what happens to growth and energy intensity, and whether sanctions are lifted.

Economic roots of early marriage in Iran

Despite the documented harms of being married off before the age of 18, particularly for girls, early marriage remains common in parts of Iran. This column summarises research that sheds light on the economic factors that drive this practice, using unique provincial data to show that poverty, inflation and income inequality are key determinants –while religiosity is not. The findings suggest that economic policies can play a crucial role in reducing the prevalence of child marriage.

Can a free trade area in services boost trade within the Arab region?

With trade in goods among Arab countries remaining modest, trade in services could play the pivotal role of an engine of growth in economic integration within the region, as well greater participation in global value chains. This column outlines progress to date and what needs to be done to make a success of AFTAS, the Arab free trade area in services.

Natural disaster literacy in Iran: survey evidence from Tehran

The frequent floods, earthquakes, and heat waves in the Middle East and North Africa underscore the urgent need to assess the region's preparedness for natural disasters. This column summarizes the state of 'natural disaster literacy' in various parts of Tehran, the capital of Iran and one of the most populous metropolitan areas in MENA. Data from a survey conducted in the winter of 2020/21 enabled the development of a disaster literacy index, which helps to identify the city's most vulnerable districts.

Should Arab countries join the WTO’s agreement on government procurement?

Not all members of the World Trade Organization are signatories of the institution’s Agreement on Government Procurement – the GPA. Indeed, although many developing economies are now joining the agreement or at least acquiring observer status, it has long been thought that the costs outweigh the benefits. This column re-evaluates the pros and cons of GPA accession for Arab countries.

Financial development, corruption and informality in MENA

Reducing the extent of informality in the Middle East and North Africa would help to promote economic growth. This column reports evidence on how corruption and financial development influence the size of the informal economy in countries across the region. The efficiency of the financial sector in MENA economies reduces the corruption incentive for firms to seek to join and stay in the formal sector.

EU climate policy: potential effects on the exports of Arab countries

The carbon border adjustment mechanism aims to ensure that Europe’s green objectives are not undermined by the relocation of production to parts of the world with less ambitious climate policies – but it could impose substantial costs on developing countries that export to the European Union. This column examines the potential impact on exporters in the Arab world – and outlines possible policy responses that could mitigate the economic damage.

Climate change threats and how the Arab countries should respond

The Arab region is highly vulnerable to extreme events caused by climate change. This column outlines the threats and explores what can be done to ward off disaster, not least moving away from the extraction of fossil fuels and taking advantage of the opportunities in renewable energy generation. This would both mitigate the potential for further environmental damage and act as a catalyst for more and better jobs, higher incomes and improved social outcomes.

Exchange rate undervaluation: the impact on participation in world trade

Can currency undervaluation influence participation in world trade through global value chains (GVC)? This column reports new evidence on the positive impact of an undervalued real exchange rate on the involvement of a country’s firms in GVCs. Undervaluation acts as an economy-wide industrial policy, supporting the competitiveness of national exports in foreign markets vis-à-vis those of other countries.

Child stunting in Tunisia: an alarming rise

Child stunting in Tunisia seemed to have fallen significantly over the past two decades. But as this column reports, new analysis indicates that the positive trend has now gone dramatically into reverse. Indeed, the evidence is unequivocal: the nutritional health of the country’s youngest citizens is rapidly deteriorating and requires immediate and decisive action.




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