Volume 4, Issue 1

Arab political regimes are both unusually undemocratic and unusually stable. A series of statistical models are nested to parse competing explanations. The democratic deficit is comprehensible in terms of modernization, democracy waves, and the Arab population share, with the last determinant subject to multiple interpretations. Hypotheses that did not receive robust support include the presence of oil rents, conflict with Israel or other neighbors, and the influence of Islam.

Long-lived undemocratic political regimes are ubiquitous in the Arab world. The likelihood of a transition declines as a country liberalizes and approaches the democratic asymptote. Worldwide democracy waves are positively associated with the likelihood of transition. Adherence to Islam among the population is uncorrelated with the likelihood of a liberalizing episode, but the Arab population share is negatively correlated with the likelihood of a liberalizing transition. For the Arab countries of the Middle East, the odds on liberalizing transitions occurring are low but rising, and alternative interpretations of the Arab population share variable are important in this regard.

This paper looks at the determinants of inflation in Iran. Unlike the traditional estimates of the demand function for real money balances, the approach followed here focuses on the relationship between nominal variables and inflation. The model estimates are used to address the questions raised by the decline in inflation that occurred up to the first half of 2006, looking at the structural stability of the estimated relationships and the ability of the model to predict inflation at the end of the sample. The estimates confirm the strong relationship between money and inflation when M1 is used, with no evidence of a structural change.

Using recent data on concentration indexes, we estimate that rents accruing from monopolistic positions represent more than 16 percent of GDP in Lebanon. In turn, using an applied computable general equilibrium model, we compare the long term impact of raising domestic competition with that of reducing import tariffs. Simulation results suggest that Lebanon would largely benefit from the reduction of anti-competitive practices. By way of comparison, reducing tariffs would be structurally less effective in terms of raising investment opportunities and real wages, which, in the long run, would inevitably affect economic growth.

This paper investigates the evolution of market structure in the Turkish insurance industry over the period 1996-2004, using the Panzar and Rosse (1987) methodology. The sample period has been divided into three sub-periods (1996-1998, 1999-2001, and 2002-2004). The results suggest that in the first and second sub-periods, the insurance firms operating in the Turkish insurance industry earned revenues under the monopoly or conjectural variations short-run oligopoly. In the third period, however, the results indicate that the insurance market was neither monopolistic nor perfectly competitive. Firm revenues were earned as if operating under monopolistic competition. Overall, the results show that market concentration is not significantly related to competitive conduct.