Economic Research Forum (ERF)

March

Africa’s continental free trade area: a stepping-stone to integration?

In a week that marks the anniversary of the treaty for an African continental free trade area, signed in Kigali on 18 March 2018, this column asks whether it is a turning point on the road towards economic integration. There are signs of progress: the inclusion of negotiations on trade in services; progress-tracking on removing barriers to trade in goods; easing the movement of persons; and improving hard and soft infrastructure to lower trade costs. But starting off with a small membership that does not include all the big players and the possibility of backsliding under the guise of indiscriminate promotion of regional value chains pose serious threats.

Transformation under radical uncertainty: the challenge for MENA

Shifting from a centralised rent-seeking society to a decentralised productive society is such a major transformation that it cannot be fully planned in advance. As Paul Collier explained in his keynote address at ERF’s 25th annual conference, it is subject to ‘radical uncertainty’ and as such depends on igniting rapid social learning so that society ‘error-corrects’ as it attempts change. His analysis draws lessons for MENA countries.

Productive jobs: rebasing growth in the MENA region

With the oil rents of the Middle East set to wane, it is essential to generate opportunities for jobs that are sufficiently productive to sustain the living standards that the population has come to expect. As Paul Collier explained in the opening keynote address at ERF’s 25th annual conference, the bare bones of building productivity at twenty-first century levels are not mysterious: clusters of firms capable of innovation have to be built and linked to vocational training that equips a workforce with the skills that firms need.

Knowledge, research networks and development policy: the ERF at 25

ERF’s annual conference has become the premier regional event for economists of the Middle East and North Africa (MENA). This column previews the 2019 conference, which takes place in Kuwait City next week (10-12 March) and which marks the 25th anniversary of the ERF. The central focus will be on the knowledge economy as an economic development model for the region.

Location and firm performance: evidence from Italy, Tunisia and Turkey

Clustering of economic activity has long been seen as an important way to boost employment, innovation and productivity. This column reports FEMISE research evidence for the positive impact on output and innovation performance of local ‘spillovers’ between domestic and foreign firms located in the same regions in Italy, Tunisia and Turkey. The results provide a benchmark for analysing the efficiency of clusters of small and medium-sized enterprises in southern Mediterranean countries.

The benefits of year-round daylight saving time: evidence from Turkey

Ever since Benjamin Franklin’s observation in the late eighteenth century that people wasted daylight by sleeping after sunrise and squandered wax by burning candles in the evening, energy conservation has been the main motivation for governments to follow ‘daylight saving time’ (DST). Using Turkey’s recent decision to extend DST to the whole year, this column summarises new evidence on how DST affects the consumption and generation of electricity, and related greenhouse gas emissions. The analysis suggests that while total consumption is unchanged, emissions may have gone down due to the policy change.

Kuwait and New Zealand: comparing GDP, competitiveness and social progress

A comparison between two economic indicators shows how competitiveness is more closely related to social progress than to GDP. This LSE Business Review column looks at how Kuwait, New Zealand and many other countries perform in terms of GDP per capita, the Global Competitiveness Index and a new Social Progress Index.

Most read

Happiness in the Arab world: should we be concerned?

Several Arab countries have low rankings in the latest comparative assessment of average happiness across the world. But as this column explains, the average is not a reliable summary statistic when applied to ordinal data. The evidence from more robust analysis of socio-economic inequality in happiness suggests that policy-makers should be less concerned about happiness indicators than the core development objective of more equitable social conditions for citizens.

It’s too early to tell what happened to the Arab Spring

Did the Arab Spring fail? This column presents a view the consensus view from ERF’s recent annual conference in Morocco: careful analysis of the fundamental drivers of democratic transitions suggests that it’s too early to tell.

Arab regional cooperation in a fragmenting world

As globalisation stalls, regionalisation has emerged as an alternative. This column argues that Arab countries need to face the new realities and move decisively towards greater mutual cooperation. A regional integration agenda that also supports domestic reforms could be an important source of growth, jobs and stability.

Reformed foreign ownership rules in UAE: the impact on business entry

In an effort to stimulate economic growth and diversify the economy, the government of the United Arab Emirates has recently implemented regulatory reform that allows 100% foreign ownership of companies operating in the country. This column examines the implications of the reform for entry of new firms in Dubai, using unique data on new business licences in the emirate.

Self-employment in MENA: the role of religiosity and personal values

How important are individual’s values and beliefs in influencing the likelihood that they will embrace the responsibilities, risks and entrepreneurial challenge of self-employment? This column presents evidence from 12 countries in the Middle East and North African region on the roles of people’s religiosity and sense of personal agency in their labour market choices.

Gender differences in business record-keeping and planning in Iraq

Only one in every ten informal businesses in Iraq is led by a woman. Yet as research summarised in this column reveals, those businesses are more likely to set budgets and sales targets, and to keep business records. This may be evidence of the role of social exclusion in motivating greater reliance on the formal bureaucratic system.

Conflict and debt in the Middle East and North Africa

With the global economy is in its third year of deceleration amid declining inflation and oil prices, the Middle East and North Africa grew by just 1.9% in 2023, with a forecast for growth in 2024 at 2.7%. In addition to heightened uncertainty brought on by the conflict centred in Gaza, many countries in the region are also grappling with pre-existing vulnerabilities, including rising debt levels. This column summarises a new report that unpacks the nature of debt in MENA – and explains the critical importance of keeping rising debt stocks in check.

Making aid-for-trade more effective in the MENA region

Aid-for-trade represents an important opportunity for developing countries to enhance their trade capacities. But the positive effect of aid-for-trade on exports can hinge on the quality of institutions in recipient countries. According to research reported in this column, in the Middle East and North Africa, it is specific aid types – such as aid to support trade policy reform and aid to enhance productive capacities – that matter most for exports.

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.

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.




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