Economic Research Forum (ERF)

May

Oil rents and Iran’s middle class

Iran’s middle class has experienced persistent expansion over the past 50 years, excluding the period coinciding with revolutionary turmoil and the Iran-Iraq war. As this column explains, the growth of the middle class has been significantly influenced by oil revenues acting to expand non-oil trade, the service sector and the real estate sector. But growth has not been accompanied by improvements in the quality of political institutions.

Improving access to finance and social cohesion in MENA

The Covid-19 crisis is exacerbating income inequalities in the Middle East and North Africa, pushing many vulnerable people into poverty and causing bankruptcy for multiple micro-enterprises and small and medium-sized enterprises. This column explores some financial innovations to help address these huge challenges, particularly focusing on improving access to finance for individuals and small businesses.

Living with debt: how institutions can chart a path to recovery in MENA

Public debt has been a critical tool for governments dealing with Covid-19, but it is a double-edged sword: as the pandemic subsides, tensions will inevitably arise between potential short-run gains and long-run costs. As the World Bank report summarised in this column concludes, institutional reforms to improve governance and transparency can address the trade-off. Such measures can be implemented with limited fiscal costs – and they hold the promise of boosting long-run growth.

Covid-19 impacts could be severe and long-lasting for developing countries

The United Nations High-level Advisory Board on Economic and Social Affairs, of which ERF Managing Director Ibrahim Elbadawi is a member, convened its first meeting recently. As this column reports, the experts urge international solidarity to prevent the Covid-19 crisis from pushing countries further apart.

Cash-based assistance programmes for refugees: evidence from Lebanon

What are the immediate and longer-term effects of at-scale cash-based assistance programmes on refugee populations? This column reports results from an evaluation of two of the largest humanitarian aid programmes currently in operation, targeted at families in Lebanon that have fled the continuing conflict in Syria.

Access to finance for Egypt’s private sector during the pandemic

In response to the global pandemic, public authorities in Egypt responded with a comprehensive package aimed at tackling the health emergency and supporting economic activity. This column examines how private sector firms perceived ease of access to finance before and after the emergence of Covid-19 in 2020.

Socio-economic inequality across religious groups in Egypt

Socio-economic inequality across religious groups has been at the centre of public debate in the Middle East for decades. This column argues for the value of taking a longer historical perspective: in Egypt, for example, inequality is not simply a consequence of postcolonial policies but rather has colonial and, perhaps more importantly, long-standing pre-colonial roots.

Public sector reform in MENA: the achievable governance revolution

Across the Middle East and North Africa, there are countries working to modernise state institutions to make them more efficient, effective and responsive. This column argues that while it is common for Arab governments to look elsewhere for reform ideas, there is a wealth of experience within the region that practitioners should consider. Lessons from public sector reform in MENA from the past two decades suggest that transformative change is possible.

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.