How “Private” are MENA Capital Markets?

This blog is written by Alissa Amico (Program Manager, MENA, Corporate Affairs Division, OECD).

Most stock exchanges in the Middle East, with the exception of the Palestine Stock Exchange, the Dubai Financial Market and a few broker-owned markets in North Africa are – unlike their largest global peers – state owned. While some exchanges in the Middle East have explored privatization or ownership restructuring, only the Kuwait Stock Exchange has moved in this direction. It is debatable whether and under what conditions other exchanges in the region will follow and if the timing is right, with the impending opening of Tadawul to foreign investors and the intense competition among financial centers in the region.

Even less known than the ownership model of exchanges, is the type of investors who dominate markets in the region. While the dependence of MENA markets on retail investors is no secret, less is known about the behavior and profile of institutional investors. And this is crucial as exchanges seek to attract foreign capital flows and encourage long-term investment. Institutional investors in the region are quite different in profile from developed or even other emerging markets, which are dominated by investment and pension funds and insurance companies.

ERF Holds Workshop on the Political Economy of the Private Sector in the Middle East

The Economic Research Forum is organizing a workshop on “The Political Economy of the Private Sector in the Middle East,” June 5-6, 2015, in Oxford, UK. The workshop, being held in collaboration with the Oxford Center for Islamic Studies, will discuss the first drafts of a number of papers covering various topics related to cronyism in the banking sector and capital markets, corruption in the job market, firm ownership, rules versus deals and public private partnerships, among others.

The event comes in the context of the MENA region’s suffering from a fragile private sector that is weakly connected with global markets and thrives largely under state patronage. Although extensive state-business interactions can form the basis for dynamic capitalism, they can also  become sources of insider influence, corruption and other forms of rent-seeking that distort politics, regulation, judicial functioning and business incentives. In MENA, the system of de facto privileges and restrictions has created a corporate pyramid composed of a small number of connected firms at the top, where competition is muted, and a large base of small firms at the bottom.

Economic Research Forum Holds Training Workshop on ‘Measurements and Analysis of Opinion Poll Data’

This blog is written by Ahmed Goher (Economic Research Forum)

The Economic Research Forum held a three-day training workshop, from May 10-12 at its headquarters in Cairo, on the use of opinion poll data to link norm changes to underlying circumstances, such as family background, ethnicity, gender, generation and place of origin.

More specifically, workshop participants focused on the use of the World Values Survey data sets from the 6th wave, covering 13 MENA countries. Lectures featured Bi Puranen (World Values Survey), Eduard Ponarin (World Values Survey), Irina Vartanova (Saint-Petersburg Higher School of Economics), Ishac Diwan (Paris Dauphine University) and Mohamed Al-Ississ (American University in Cairo) and explored econometric methods with a select review of the economic, political science, and sociological literature that use opinion polls to test theories empirically.
The workshop also covered techniques that include factor and cluster analysis, linear or logistic regression analysis, and structural equation modeling. Participants were also introduced to various types of graphical analysis.

ERF 22ND ANNUAL CONFERENCE CALL FOR PROPOSALS

This blog is edited by Ahmed Goher (Economic Research Forum)

The Economic Research Forum (ERF) announced that is inviting proposals for papers to be presented in ERF’s 22nd Annual Conference, which will be held in Cairo, Egypt, March, 2016. Authors who wish to submit proposals, should be engaged in research on the ERF region (the Arab countries, Iran and Turkey), regardless of their affiliation to ERF. Previously published papers or those accepted for publication may not be submitted. The deadline for submitting proposals is June 15, 2015.

The authors of accepted papers (one author per paper) will be invited to present and take part in the deliberations of the conference at ERF’s expense. If the paper is accepted for publication in a refereed journal within two years of the conference, the author(s) will receive an honorarium of $1,000. In addition, the refereeing committees will select six papers—one per each of the six parallel session themes—for the Best Paper Award. Winning papers are evaluated on the basis of their contribution to knowledge, rigor and policy relevance. The Awards will be announced at the Closing Plenary of the conference and each winning paper will receive an extra $1,000. Finally, the editors of ERF’s Middle East Development Journal (MEDJ) will select worthy papers for possible inclusion in the journal, following the journal’s refereeing process.

CONFERENCE OBJECTIVES
The 22nd Annual Conference provides a unique opportunity for regional researchers to interact with international peers and with each another. It also provides a venue for the presentation of multiple research papers, both in the plenary and parallel sessions, with stimulating discussions and feedback. In addition, the conference features special events, the presentation of selected research projects and celebrates excellence in research.

MAIN THEME AND SUB-THEMES
The theme of the plenary sessions this year is A Post Arab Awakening Development Agenda. The themes of the parallel sessions are always varied enough to accommodate diverse research interests. Submissions for presentations in the parallel sessions may be made under the following areas:

1. Macroeconomics
2. Finance
3. International Economics
4. Labor and Human Development
5. Microeconomic and Sectoral studies
6. Institutional Economics/Governance

To read more about the timetable and guidelines for proposals»

Navigating the Transitions to Democracy

This post is written by Ahmed Goher (Economic Research Forum)

The Economic Research Forum (ERF) brought together speakers Eva Bellin (Brandeis University), Erik Berglof (London School of Economics) and Larry Diamond (Stanford University) on the third and final day of its 21st Annual Conference to explore how MENA countries can best manage their transitions to democracy.

Bellin began the session, chaired by Bassma Kodmani (Arab Reform Initiative), by presenting on ‘Lessons for Democratic Transition in the Arab World.’ The core argument of Bellin’s presentation was that established findings in the literature that economic development better sustains democracy, that neighborhood democratization has a high chance of leading to transition, and that a professionalized military apparatus is more likely to ensure a smooth transition to democracy; none of these findings are actually deterministic. In this sense, per Bellin, identifying lessons of what has worked elsewhere will not provide a definitive roadmap for Arab countries’ successful transition to democracy. For instance, the idea that higher GDP is more conducive to democracy is not a set rule, since half of the poorest countries in the world are democracies, Bellin argues, adding that some authoritarian regimes can have high levels of economic development as happened in the cases of Chile and Argentina.

Forms of Democracy and Development

This blog is written by Ahmed Goher (Economic Research Forum)

The Economic Research Forum (ERF) held its second plenary session on ‘Forms of Democracy and Development’ on March 21, in the context of the 21st Annual Conference being held in Tunisia.The session joined Tarek Masoud, associate professor of public policy at Harvard University‘s John F. Kennedy School of Government, Mustapha Kamel Nabli, a Tunisian economist and the former Governor of the Central Bank of Tunisia, and Gérard Roland, E. Morris Cox professor of economics and professor of political science at the University of California Berkeley.

The three speakers broadly explored the many forms of democracy and their different results in terms of growth and development. More specifically, they looked at the way in which institutions impact economic outcomes, the way in which different political systems and electoral processes do or do not impact the success of democratization, and the relationship between culture and democracy.

Disentangling the Complex Relationship between Democracy and Development: Part II

This blog post is written by Ahmed Goher (Economic Research Forum)

In an attempt to understand the causal relationship between democracy and development, Adam Przeworski, Carroll and Milton Professor of Politics and (by courtesy) Economics at New York University, took over from Ibrahim Elbadawi and presented ‘ Democracy, Elections, and Development’ in the first session of ERF’s 21st Annual Conference that kicked off March 20 in Gammarth, Tunisia.

Przeworski began by expressing his optimism towards the future of the region, emphasizing that he was not dissuaded by the terrorist incident that took place only two days prior to the conference, claiming the lives of over 20 individuals at Tunis’ Bardo Museum.

Przeworski then proceeded to ambitiously summarize two enormous bodies of economic and political literature to make sense of the complex relationship between development and democracy. According to Przeworski, the complexity of the matter means that for the large part very few things are certain, largely since econometrics fails to reject the many brilliant, albeit sometimes divergent, postulated theories. The one thing Przeworski claims we can be certain of is that democracies do not grow slower than non-democracies; determining whether democracies grow faster, however, “is next to impossible to tell.” For one thing, notions of democracy are diverse, different variables (e.g., GDP or levels of growth) are often taken into account, and the way in which the data itself is organized also differs largely among economists. The result: divergent results that only make this topic more complex and hard to understand.

Disentangling the Complex Relationship between Democracy and Development: Part I

This blog post is written by Ahmed Goher (Economic Research Forum)

Economic Research Forum (ERF) held the first plenary session of its 21st Annual Conference on March 20 in Gammarth, Tunisia. The session came to answer a number of questions of vital importance to the transition processes a number of MENA countries embarked on following the Arab Spring. Namely, what is the nature of the causal relationship between democracy and development? Does democracy lead to more growth and development in countries? Conversely, does development lead to democracy? And, perhaps more importantly, what does all of this mean for MENA countries in transition.

To explore this complex but integral theme, ERF joined speakers Ibrahim Elbadawi, director of research at the Dubai Economic Council, and Adam Przeworski, Carroll and Milton Professor of Politics and (by courtesy) Economics at New York University, together in the first plenary session of the 21st Annual Conference.

Following the two cross-cutting themes of resource-dependency and social polarization, Elbadawi, who largely focuses on oil-rich Arab economies, began the session by giving a presentation titled ‘The Arab Spring: Much Violence, Little Democracy,’ in which he tackled three broad questions: (1) Is democracy important for development? (2) If so, why has the Arab Spring been such a “late awakening”? and (3) Why is there so much violence? .

ERF 21st Annual Conference Kicks Off

This blog is written by Ahmed Goher (Economic Research Forum)

Economic Research Forum’s (ERF) 21st Annual Conference kicked off on March 20 in Gammarth, Tunisia, at the Golden Tulip Carthage Hotel. The event, joining over 200 economists, political scientists and policymakers from the region began with opening remarks by ERF Managing Director Ahmed Galal, Chairman of the Board of Trustees Abdel Latif Al-Hamad and Hedi Larbi of the Tunisian Economic Association.
The three deplored the heinous terrorist incident that rocked Tunisia’s Bardo Museum, leaving 23 dead, a few days prior to the conference, and emphasized that continued hard work is the best way to counter the sinister ambitions of extremists. They also expressed their gratitude to the ERF network and highlighted how, in the words of Hamad, “ERF is an institution that has grown from nothing to something important and dynamic thanks to its fellows, affiliates, management and staff.”

On his part, Galal said the conference was being held in Tunisia in light of the ‘Democracy and Economic Development’ theme under which it is being held and the fact that Tunisia is a place in which “democracy is in the making,” adding that the wide attendance to the conference is a testament that “[ERF] is supportive of countries that are democratic, inclusive and civilian […] We are not fearful and are not running away.” Galal also gave a brief rundown of ERF’s accomplishments over the past year and noted the introduction of a new policy dialogues program by ERF to bridge the gap between research and policymaking in the region. “ERF is like a submarine, it is very powerful but also underwater,” he explained, adding that for its fruits to fully materialize it needed to surface and ensure proper reach to the community of policymakers in the region.

ERF’s 21st Annual Conference Nearing

This blog is written by Ahmed Goher, Economic Research Forum

From 2010 to around mid-2012, uprisings swept MENA in what has come to be known as the ‘Arab Spring.’ While bread was at the forefront of the demands of protestors, shouts for freedom and social justice were also heard across the region. It is with this in mind that many countries of the region embarked on messy democratization processes with the tacit understanding that democratic regimes are more conducive to development.

Both theory and empirical evidence, however, are inconclusive when it comes to the impact of democracy on economic growth and distribution, on the one hand, and the impact of growth and distribution on democracy, on the other. For one thing, conceptions of democracy are not uniform, but often take different forms with varying repercussions on policy-making and development when they materialize.

In this context, the Economic Research Forum (ERF) announced that it will hold its 21^st Annual Conference in Tunisia, March 20-22, under the theme of ‘Democracy and Economic Development.’ The conference has come to be recognized as the premier event for economists in the Middle East, bringing together over 150 policymakers, economists and political scientists.  Through a number of plenary sessions, participants at the conference will seek to uncover and understand the link between democracy and development, the possible impact of different forms of democracy on development and how to best navigate the transition towards democracy in the Arab world.