Band 6, Heft 2

This paper examines whether the economic reforms attached to IMF and World Bank policy-based lending in the Middle East and North Africa have stimulated sustained economic growth. In order to investigate this, we chose four countries to study in depth: Jordan, Egypt, Tunisia and Morocco. These were chosen as they have been put forward by both the IMF and the World Bank as successful reformers who, for prolonged periods, carried out World Bank and IMF guided economic reform programs. We examine the sources of growth during the reform period in these four countries, looking at intensive versus extensive growth, growth in the tradables sector versus the non-tradables sector and growth caused by the reforms versus growth caused by exogenous factors. We discovered that the reform programs in all four countries were associated with spurts of economic growth, but that, apart from Tunisia, this was not sustained, with intensive growth in the tradables sector stimulated by the reform program.

This paper studies the extent of bank competition in the Middle East and Northern Africa (MENA) region during 1994-2008, using non-structural measures of competition such as the H-statistic and the Lerner index. Both these measures suggest that banking sector competition in MENA is lower relative to other regions and has not improved in recent years. An analysis of the determinants of competition across countries suggests that lower levels of competition in MENA are explained by a worse credit information environment and lower market contestability.

With the implementation of the European Neighborhood Policy, many Arab countries have been actively pursuing economic and policy reforms in the context of bilateral Action Plans with the European Union (EU). Among other things, these reforms target enhanced communication infrastructures as well as more efficient public administrations. Using a gravity model and panel data econometrics, we evaluate the impact of the Internet diffusion and institutional efficiency on EU-Arab trade. We generate a series of simulations suggesting that upgrading the aforementioned factors would significantly increase Arab imports from the EU. Results allow us to identify sectoral-reform priorities from both country-level and regional perspectives to be anchored in the Action Plans.

How are immigration and trade related? Migration leads to the formation of social networks across borders, driving down trade costs. Immigrants may also retain a preference for their native country's products, creating a local market for exports. I examine these two competing theories by estimating the immigration-trade linkage separately for migrants moving from the Middle East and North Africa (MENA) to Europe and North America. While these two groups originate in the same location and have similar preferences, they are quite different in terms of both income and education, with migrants to North America tending to be less numerous but more educated. The greater degree of economic assimilation for North American migrants should strengthen migrant network effects, but greater cultural assimilation weakens both network and preference effects. I find the migration-trade link to be stronger for migrants to Europe, with the strongest effect for imports. The link is stronger for differentiated goods than for homogeneous goods and strongest for differentiated goods imports into Europe. These results suggest that while network effects matter, immigrant preferences for native country goods are the key factor driving the migration-trade link.