Democracy and Economic Development: ERF 21st Annual Conference - Economic Research Forum (ERF)

Democracy and Economic Development: ERF 21st Annual Conference

March 20,2015
Tunis, Tunisia

ERF held its 21st Annual Conference in Tunisia, March 20-22, 2015, under the main theme of ‘Democracy and Economic Development.’ Over 150 economists, policymakers and political scientists participated in the event.
The Economic Research Forum’s (ERF) Annual Conference has become the premiere regional event for Middle East economists, where new ideas are born, nourished and promoted; where the community of researchers meets; and where excellence is celebrated. This year’s conference was held in Tunisia, March 20-22, 2015, in collaboration with the Tunisian Economic Association. The main theme of the plenary sessions is “Democracy and Economic Development.”
Besides the plenary sessions, which featured world renowned economists, political scientists and policy makers, there will be six parallel sessions daily. Parallel sessions saw the presentation of more than 40 papers under the themes of Macroeconomics, Microeconomics, International Economics, Finance, Labor and Human Development and Institutional Economics. In addition, there were two special sessions showcasing the work by ERF on the themes of “Transition in the Arab World” and “Inequality in the Arab World.” As always, the closing session was devoted to celebrating the six winners of what has become a regional mark of excellence: The Best Paper Award.
Conference Theme
The choice of “Democracy and Economic Development” as the main theme of the conference is prompted by two observations: First, several countries in the region are engaged in a messy democratization process; Second, the causal relationship between democracy and economic development (and reverse causation) is anything but clear and conclusive.
To be sure, democracy is important in its own right. In addition, as former British Prime Minister Winston Churchill once famously remarked, “… [It] is the worst form of government, except for all those other forms that have been tried from time to time.” We also know that all rich and advanced countries are democracies. The problem is that the transition to democracy is associated with high levels of uncertainty, economic difficulties and rising popular demands. Failing to manage this transition can be costly and may jeopardize the transition process altogether. Beyond the transition, both theory and empirical evidence 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. Moreover, democracy is not monolithic and has different faces (especially in terms of design and practice), and thus may have varying repercussions on policymaking and development. In this context, the objectives of the three plenary sessions of this conference are to address the debates surrounding 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.

Plenary Session 1:
The Relationship between Democracy and Development
To disentangle the relationship between democracy and economic development, the speakers in this session will adopt a medium to long term perspective, addressing such questions as: Do countries become democratic when their levels of income reach a certain level, or does democracy come about as a result of historical events or critical junctures? What is the role of inequality and class structure in bringing about more democratic societies? Viewed from the opposite perspective, what is the impact of democracy on development, and does it always deliver acceptable socio-economic outcomes? Are there economic and social circumstances, such as levels of development or conflicts, where a dictatorship may outperform a democratic regime? With respect to the Arab countries, the speakers could further address questions such as: Why did the region suffer from a “democratic deficit” for a long time? To what extent did oil, conflicts, political Islam, and colonialism contribute to this outcome? What prompted the recent uprisings? Why did they occur in some countries, but not in others? And how serious is the ensuing polarization for prospects of democracy?
Plenary Session 2: Forms of Democracy and Development
This session starts from the observation that democracy comes in many forms, apparently with different results in terms of economic growth, equity and overall welfare. The question is what makes one form of democracy more successful than another? To explore this question, the speakers will address such questions as: To what extent can the variations in economic outcomes be attributed to the way democratic institutions are designed and the manner in which they behave, especially in terms of checks and balances, transparency, accountability and broad political inclusion? Which features of democratic institutions are most relevant and critical for achieving positive developmental outcomes? Are there forms of democracy, such as presidential or parliamentary; features of electoral processes; and/or systems of political finance that are empirically found to be better than others?  Turning to the Arab countries, what are the implications of the above for the Arab countries in transition? In particular, what should these countries do to create good democratic systems and what are the pitfalls they should avoid?
Plenary Session 3: Navigating the Transition to Democracy
Informed by the findings of the previous plenary sessions, this session will more broadly examine the experiences of countries that went through democratic transitions to draw lessons for the Arab countries currently navigating their own transitions. To this end, the speakers will address such questions as: Is there a pattern for successful political and economic transitions or is the process country specific? How long does it take to achieve political and economic stability and at what cost? What prevents countries in transition from sliding back into undemocratic governance? Finally, how were social mass movements transformed into a political power base for new regimes? In addition to the above questions, the speakers may also deal with the role of religion and the military in transition processes. Finally, they may speculate about what can be expected going forward.

Working Papers

Country-Specific Oil Supply Shocks and the Global Economy: A Counterfactual Analysis

Kamiar Mohaddes and Mohammad Hashem Pesaran

This paper investigates the global macroeconomic consequences of country-specific oil-supply shocks. Our contribution is both theoretical and empirical. On the theoretical side, we develop a ... read more

Working Papers

Access to Finance: Mind the Gender Gap

Hanan Morsy and Hoda Youssef

Studies on financial inclusion have so far focused on assessing determinants to overall access to finance, but limited attention has been given to financial inclusion ... read more

Working Papers

Bank Market Power and Non-interest Income in Emerging Markets

Canan Yildirim and Adnan Kasman

This paper examines how market power in traditional intermediation affects Turkish banks’ involvement in non-interest income generating activities, in particular, fee and commission income. The ... read more

Working Papers

How Did Wars Dampen Trade in the MENA Region?

Fida Karam and Chahir Zaki

The paper investigates the effects of wars on trade in the Middle East and North Africa (MENA) region. As a region, MENA faces considerable risk ... read more

Working Papers

The Unfolding of Gender Gap in Education

Nadir Altinok and Abdurrahman Aydemir

The gender gap in education against females becomes smaller as the level of development increases and turns in their favor in developed countries. Through analysis ... read more

Working Papers

Modelling the Density of Egyptian Quarterly CPI Inflation

Doaa Akl Ahmed and Mamdouh M. Abdelsalam

This paper aims at modelling the density of quarterly inflation based on time-varying conditional variance, skewness and kurtosis model developed by Leon, Rubio, and Serna ... read more

Working Papers

An Empirical Analysis of Demand for Mobile Services in Turkey

Hulisi Ogut , Asunur Cezar and Merve Guven

We investigate the factors influencing the demand for mobile voice services in Turkey using firm level data that spans from January 2009 to December 2013. ... read more

Working Papers

Does Income Growth Relocate Ecological Footprint?

Sevil Acar and Ahmet Atil Asici

The aim of this paper is to investigate whether countries tend to relocate their ecological footprint as they grow richer. The analysis is carried out ... read more

Working Papers

The Economic Determinants of Political Islam: An Empirical Investigation of the Arab Spring in Egypt

May Attallah

This paper empirically studies the voting outcomes of the first post-revolution presidential elections in Egypt. In light of the strong success of Islamist candidate Mohamed ... read more

Working Papers

Growing Without Changing: A Tale of Egypt’s Weak Productivity Growth

Hanan Morsy , Antoine Levy and Clara Sanchez

This paper aims to identify the reasons why economic growth in Egypt, although comparable to its peers, failed to significantly reduce unemployment, lower poverty levels ... read more

Working Papers

A Multilevel Analysis of Individuals’ Attitudes toward Welfare State Responsibilities

Cem Baslevent and Hasan Kirmanoglu

Making use of data from the European Social Survey (ESS), we investigate the determinants of individuals’ attitudes towards welfare state policies in 29 European countries. ... read more

Working Papers

Inequality of Opportunity in Individuals’ Wages and Households’ Assets in Egypt

Rami Galal and Hoda El Enbaby

Inequality has often been cited as one of the leading sources of discontent in Egypt and one of the causes of the 2011 revolution. However, ... read more

Working Papers

Measurement of Total Factor Productivity and Its Determinants: Case of Wheat Sector in Tunisia

Ali Chebil , Aymen Frija and Rached Alyani

The main objectives of this study are to quantify the Total Factor Productivity (TFP) growth of the durum wheat sector in Tunisia and to identify ... read more

Working Papers

Are We Sure About the Effects of the Egyptian Uprisings? A SURE Approach

Amr Hosny

Four years after the historic uprising of the Egyptians in January 2011, we aim to understand whether the Egyptian revolution has had a different impact ... read more

Working Papers

Comprendre l’utilisation de la Recherche en Sciences Sociales Par les Organisations de la Société Civile: La Leçon Marocaine

Hind Hourmat Allah and Brahim ElMorchid

The objective of this paper is to contribute to the understanding of the factors explaining the use of social science research by the development NGOs. ... read more

Working Papers

Public Spending Efficiency, Governance, and Political and Economic Policies: Is there a Substantial Causal Relation? Evidence from Selected MENA Countries

Riadh Brini and Hatem Jemmali

In this paper, we first seek a robust methodology for the estimation of the relative public spending efficiency of eleven Middle East and North Africa ... read more

Working Papers

Financial Vulnerability and Export Dynamics

Mélise Jaud , Youssouf Kiendrebeogo and Marie-Ange Veganzones-Varoudakis

This study documents the implications of financial vulnerability for export diversification in developing economies. Financial crises, by increasing the incidence of sunk costs of entry ... read more

Working Papers

Do Telecom Restrictive Policies Matter for Telecom Performance? Evidence from MENA Countries

Riham Ahmed Ezzat and Nora Aboushady

The past decade has witnessed a significant transformation in the trade and regulatory policies of the telecom sector across the MENA region. Many countries committed ... read more

Working Papers

The Determinants of Child Health Disparities in Jordan

Caroline Krafft

The first few years of children’s lives provide a crucial window for their human development. Malnutrition, as a form of faltering development in the early ... read more

Working Papers

Sectoral Shifts, Diversification, Regional Unemployment on the Eve of Revolution in Tunisia: A Sequential Spatial Panel Approach

Walid Jebili and Lotfi Belkacem

This paper investigates how sectoral shifts and industry specialization patterns have influenced Tunisian labor market performance in the recent past years. Building on a sequential ... read more

Working Papers

Political Instability, Uncertainty, Democracy, and Economic Growth in Egypt

Hossam Eldin Mohammed Abdelkader

This paper aims to determine if there is a relationship between political instability, uncertainty, and political regime, on the one hand, and economic growth in ... read more

Working Papers

Arab Countries between Winter and Spring: Where Democracy Shock Goes Next!

, Tapas Mishra and Anita Staneva

This paper presents rigorous mechanisms to study how persistent democratic shocks in one country produce spillover effects and comprise a major determinant in dynamic growth ... read more

Working Papers

Tests De Séparabilité Dans Les Décisions Des Ménages Agricoles: Cas Du Maroc

Touhami Abdelkhalek and Fouzia Ejjanoui

The modeling and empirical analysis of the behavior of farming households, particularly in a context of imperfect markets, is important in development microeconomics. Whether the ... read more

Working Papers

Which Firms Create the Most Jobs in Developing Countries? Evidence from Tunisia

Bob Rijkers , Hassen Arouri , Caroline Freund and Antonio Nucifora

This paper examines private sector job creation in Tunisia over the period 1996-2010 using a unique database containing information on all registered private enterprises, including ... read more

Working Papers

Arab Spring Protests and Women’s Labor Market Outcomes: Evidence from the Egyptian Revolution

Nelly El-Mallakh , Mathilde Maurel and Biagio Speciale

We analyze the effects of the 2011 Egyptian protests on the relative labor market conditions of women using panel information from the Egypt Labor Market ... read more

Working Papers

Understanding Democratic Transition Using Self-Organizing Maps: A Special Focus on Arab Spring Countries

Houda Haffoudhi , Racem Mehdi and Gam Abdelkader

The aim of the paper is to identify, in the light of the Arab spring, the conditions favorable for democratic transition and to analyze the ... read more

Working Papers

Empowerment is a Community Affair: Community Level Determinants of Married Women’s Empowerment in Egypt

Ragui Assaad , Hanan Nazier and Racha Ramadan

This paper examines the contextual and community-level determinants of multidimensional women’s empowerment in Egypt, while accounting for the usual individual and household level factors typically ... read more

Working Papers

Algeria–Mali Trade: The Normality of Informality

Sami Bensassi , Anne Brockmeyer , Mathieu Pellerin and Gael Raballand

This paper estimates the volume of informal trade between Algeria and Mali and analyzes its determinants and mechanisms, using a multi-pronged methodology. First, we discuss ... read more

Working Papers

Political Connections and Tariff Evasion: Evidence from Tunisia

Bob Rijkers , Leila Baghdadi and Gael Raballand

Are politically connected firms more likely to evade taxes?  This paper presents evidence suggesting firms owned by President Ben Ali and his family were more ... read more

Working Papers

Assessing Fiscal Sustainability in Algeria: A Nonlinear Approach

Abderrahim Chibi and Sidi Mohamed Chekouri

The main objective of this study is to examine the sustainability of fiscal policy using a nonlinear model approach and a smooth transition autoregressive model ... read more

Working Papers

An Estimation of Tariff Pass-Through in Tunisia

Leila Baghdadi , Hendrik Kruse and Inmaculada Martinez-Zarzoso

In this paper we evaluate the extent to which changes in tariffs and in international prices are transmitted into consumer prices in Tunisia over the ... read more

Working Papers

Can Banks Lead the Economic Recovery of the Arab Spring?

Sam Hakim

We analyze the role of banks in Bahrain, Egypt, Libya, Tunisia, and Yemen, pre-and post-revolution, and find that the volume of credit they offered to ... read more

Working Papers

Competitive Real Exchange Rates Are Good for the Poor: Evidence from Egyptian Household Surveys

Ibrahim Elbadawi and Eman Refaat

This paper develops a theoretical model that allows for assessing the poverty impact of the real exchange rate (RER), as an economy-wide relative price, in ... read more

Working Papers

Household and Contextual Indicators of Poverty in Tunisia: A Multilevel Analysis

Mohamed Amara and Hatem Jemmali

This paper uses a multilevel logit model and a multilevel mixed linear model to simultaneously analyze the micro-level (household) and macro-level (governorate) factors that might ... read more

Working Papers

Technical Efficiency and Stability to Shocks: A Comparison between Islamic Banks and Conventional Banks in MENA Region

Mohamed El Arbi Chaffai

The banking industry market is shared by conventional and Islamic Banks in MENA. These latter banks have been expanding during the last decade. In an ... read more

Working Papers

Economic Features of the Arab Spring

David Cobham and Abdalla Zouache

This paper analyzes the economic factors that lie behind the upheavals commonly known as the ‘Arab Spring,’ and the economic policy opportunities that a genuine ... read more

ERF 21st Annual Conference Kicks Off

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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 ... read more

Forms of Democracy and Development

This blog is written by Ahmed Goher (Economic Research Forum) The Economic Research Forum (ERF) ... read more

Navigating the Transitions to Democracy

This post is written by Ahmed Goher (Economic Research Forum) The Economic Research Forum (ERF) ... read more