Economic Research Forum (ERF)

June

Dependency on natural resources and diversification of economies in MENA

It is widely understood that natural resource dependency can have a significant negative impact on a country’s long-term economic growth. This column explores evidence for how such outcomes arise – as well as potential diversification strategies that could help to reduce the resource curse in the economies of the Middle East and North Africa.

When market contestability is not enough

In economies where the state maintains a big footprint, as in the Middle East and North Africa, improving the performance of public enterprises and dominant private firms would seem to require a stronger threat of competition. But as this column explains, such enhanced market contestability may not be enough if there is inadequate competition in the marketplace for policy ideas and public opinion.

Harmonising rules of origin for the African continental free trade area

For the African continental free trade area to become fully operational, it is essential for the 54 signatory countries to reach agreement on harmonisation of rules of origins – the ‘Made in Africa’ criteria to ensure that only bona fide African products will benefit from tariff concessions. This column reports on progress and the remaining challenges.

Interactions of economic, political and cultural populism

Economic populism often leads to political and cultural populism, according to this column, the final one in a series of three on this increasingly prominent phenomenon. Because the returns to ‘election economics’ are positive in the short run – in terms of growth and popular support – but negative in the long run as the economy suffers, governments eventually have to resort to authoritarianism. Populists often end up blaming migrants, minorities, international institutions and foreign powers for the declining economy.

Economic and political populism – and an application to Turkey

Populist governments often practice ‘election economics’, boosting public spending ahead of a vote to attract more support and reining it in afterwards to avoid inflation. This column, the second in a series of three on the increasingly prominent economic and political phenomenon of populism, explores the experiences of Turkey.

Vulnerable workers in MENA a year into the pandemic

How are labour markets in the Middle East and North Africa performing a year into the pandemic? This column assesses the impact of the crisis on employment and earnings using data from the second wave of the ERF Covid-19 MENA monitor surveys in Egypt, Jordan, Morocco and Tunisia. There are glimmers of progress but persistent problems in these four countries’ labour markets.

Kuwaiti small businesses after the pandemic: time for a new social contract

Has the Covid-19 outbreak been a blessing in disguise for the social contract for micro, small and medium-sized enterprises in Kuwait? This column argues that the double crisis of the pandemic and low oil prices provides an opportunity to adopt the reforms that are necessary to make the country’s economy more dynamic, in particular encouraging innovation and job creation in the small business sector.

Three types of populism: economic, political and cultural

Governments that stimulate the economy before elections by increasing transfer payments, authoritarian leaders who suppress opposition and undermine institutions that provide checks and balances, and political parties and governments that espouse racist and anti-immigrant policies are all referred to as ‘populist’. This column, the first of three on this increasingly prominent phenomenon, argues that we should distinguish three different kinds of populism: economic, political and cultural.

Most read

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.

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.

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.

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.

The economics of Israeli war aims and strategies

Israel’s response to last October’s Hamas attack has led to widespread death and destruction. This column outlines the impact thus far, including the effects on food scarcity, migration and the Palestinian economy in both Gaza and the West Bank.

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.