Economic Research Forum (ERF)

December

Low social and political returns to education in the Arab world

Arab societies urgently need to start looking at how to improve education systems, not just in ways to improve the marketability of individuals but, as importantly, to improve their social and political impact on society. Drawing on evidence from the World Values Survey, this column argues for strengthening a sense of community, beefing up values of civic engagement, inculcating democratic principles, supporting gender equality and promoting social tolerance.

Replace discretion with rules to boost economic performance

A government that adopts institutional reform to increase policy credibility and enhance the degree of competition may be rewarded with improved economic performance. This column reports the experience of Turkey in the early 2000s, a period in which anti-corruption and economic reform programmes that promoted more rule-based policy-making made significant positive contributions to growth.

Brain gain from return migration: evidence from Egypt

Far from causing ‘brain drain’ in the developing world, temporary migration can lead to a ‘brain gain’ for the sending countries. This column reports research on Egypt showing that migrants acquire significant human capital while they are overseas, which increases their probability of upward occupational mobility when they return home. This provides a potential source of economic growth for their country of origin.

Unemployment and the marginally attached

While the standard definition of unemployment is useful for international comparisons, it may not be adequate for assessing the degree of labour market attachment in many developing countries. This column reports evidence from Turkey that there is a significant group of ‘marginally attached’ individuals who appear to be non-participants in the labour market but are in fact ready for employment when work is available.

Better measures of the health of Egypt’s labour market

Policy discussions about the health of Egypt’s labour market focus almost exclusively on one indicator: the unemployment rate. This column argues that the unemployment rate is a poor indicator of the cyclical performance of the economy. What’s more, it focuses attention on the plight of a very specific group of people, who are not the most vulnerable to poor labour market conditions.

Fiscal rules: how to reduce pro-cyclical public spending

Fiscal pro-cyclicality is a defining trait of many MENA countries and other emerging economies: public spending typically rises in good times and falls in bad times. This column reports research on the effectiveness of fiscal rules in countering this widespread tendency. The evidence from 120 countries over a 30-year period indicates that rules on government expenditure can reduce the pro-cyclicality of public spending by around 40% on average.

Microcredit: choosing between inclusion and impact?

The microfinance industry continues to grow rapidly in the MENA region. This column reports research from across the world showing that giving people access to microcredit does not lead to significant declines in poverty. But while microcredit is not yet a powerful anti-poverty strategy, the evidence shows that it is a useful financial tool.

A new exchange rate regime for oil-exporting countries

Currency pegs in the Gulf economies have forced monetary policy to be pro-cyclical, exacerbating the effects of swings in the oil market on the business cycle. This column proposes a new exchange rate regime for oil-exporting countries: one in which the currency is pegged to a basket that includes commodities along with currencies.

Climate change policy in MENA after Paris

The Paris Agreement on climate change has set ambitious targets for reducing the carbon footprints of the signatory countries. This column outlines the commitments and challenges for policy-makers in the Middle East and North Africa.

How to reform: lessons for MENA from post-communist transition

What can reformers in the MENA region learn from the transition experiences of the formerly communist countries of Central and Eastern Europe and the former Soviet Union? This column outlines several insights – first and foremost, that economic reforms do not succeed without political reforms.

Anti-corruption strategies: successes and failures

Countries in the Middle East and North Africa don’t typically score well in term of corruption. This column looks at anti-corruption strategies around the world to explore what might be done. Overall evidence points to an absence of monitoring as well as potential capture by governments and donors as the main reasons for the lack of success of such strategies.

Pension reform that avoids harming MENA labour markets

To tackle the deficits in their pension systems, should governments in Arab countries raise social security contributions, reduce pension levels or increase the statutory retirement age? This column summarises the results of research assessing the costs and benefits of different pension reforms in terms of their impact on different generations and on the labour market.

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