ECON 3630: Economics of the Middle East and North Africa Fall Monday, Wednesday: 2:00-3:15pm Monroe 124 Julia C. Devlin, PhD

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1 ECON 3630: Economics of the Middle East and North Africa Fall 2015 Monday, Wednesday: 2:00-3:15pm Monroe 124 Julia C. Devlin, PhD Office hours: Mon, Wed 3:30-4:30 pm. By appointment, Monroe 219 Course Description and Objectives This course surveys issues related to the economic development of the Middle East/North Africa region (MENA) with an emphasis on theory and practice. Topics covered include growth strategies since 1960 and specific development challenges including (i) the role of OPEC and managing oil price volatility; (ii) water scarcity; (iii) poverty and inequality; (iv) youth unemployment and labor market rigidities; (v) global and regional integration (vi) private and financial sector development, among others. The course adopts a problem-solving approach and includes case studies and analysis of specific country and sector programs. A highlight of the course is a development project competition in which groups of students design and present a project for review by a panel of development practitioners. By the end of the course, students will have learned: Growth and development patterns characteristic of MENA countries MENA s key development challenges--underlying factors and approaches How to prepare a country analysis for MENA country How to design and evaluate a development project for a MENA country Course Requirements and Grade Determination 25% Class presentation 25% Group project competition and country analysis 25% Midterm 25% Final Exam Class presentation For select class sessions, a small group of students will prepare a 10 minute PowerPoint presentation on a designated topic or question. The presentation is expected to draw on reading materials assigned for each topic and other relevant resources. A two page summary and the presentation are to be submitted the day before the presentation. Class presentation topics are intentionally broadly defined. Group project competition and country analysis Each group of students will design a project to promote growth in a MENA country and present this concept to a panel of development practitioners. Requirements include preparation of a five to eight page country analysis as background information for the project, participation in the competition, a one to two page executive summary of the project submitted in advance of the competition and a five page full project description submitted Julia C Devlin Copyright pending Page 1

2 after the competition. Class lectures and templates will help guide the structure of the analysis and written submissions. The grade for this component will be based on both the country analysis (50%) and project concept document (50%). Recommended Texts: Cammett, M and I. Diwan, Richards, A. and J. Waterbury (CDRW) (2015) A Political Economy of the Middle East, Fourth Edition, Westview Press. Devlin (2010) Challenges of Economic Development in the Middle East and North Africa. World Scientific Press. (on reserve) Additional Readings: Readings published by the World Bank can be found under documents and reports at and on the International Monetary Fund (IMF) website at All other articles listed are available online. Tentative Schedule: 8/26 Introduction 8/31 Growth performance /2 Growth performance 1985-present 9/7 Country analysis 9/9 OPEC and the oil market 9/14 Oil, macroeconomic policy and growth 9/16 Water scarcity 9/21 Agriculture, food security and the environment 9/23 Population, youth and gender 9/28 Project analysis 9/30 Midterm 10/7 Unemployment and labor markets 10/12 Education and health 10/14 Poverty and social welfare, Country analysis due 10/19 Infrastructure 10/21 Trade and regional integration 11/2 Industrial policy and export promotion 11/4 Private sector development, Project executive summary due 11/9 Project competition trial run 11/11 Development project competition 11/16 Financial sector development, Project concept document due 11/18 Governance and institutions 11/23 Urbanization 12/2 Conflict 12/7 Review 12/11 Final Exam: 2-5 pm, Monroe 124 Julia C Devlin Copyright pending Page 2

3 Introduction CDRW (1,2,) Growth performance, CDRW (3,7) Sala-i-Martin, X and Artadi (2002) Economic Growth and Investment in the Arab World. Columbia University Department of Economics Discussion Paper. # World Bank (1974) The Economic Development of Tunisia. Main Volume. Class Presentation Topic: Discuss economic development in Tunisia in the post-independence period to the reforms of the 1980s and 1990s. Growth performance, 1985-present CDRW (8) World Bank (1990) Republic of Tunisia: Country Economic Memorandum: The Road to an Outward Oriented Economy. World Bank (2014) The Unfinished Revolution: Bringing Opportunity, Good Jobs and Greater Wealth to all Tunisians. Class Presentation Topic: Discuss Tunisia s development from the 1980s and 1990s to the present. Country analysis World Bank (2006) Fostering Higher Growth and Employment in the Kingdom of Morocco. OPEC and the oil market CDRW (13) pp International Energy Agency (2005) World Energy Outlook: Middle East and North Africa. Chapter 4. Fattouh, B and L. Mahadeva (2013) OPEC: What Difference Has it Made? Oxford Institute for Energy Studies. Adelman, M. (2002) World Oil Production and Prices , Quarterly Review of Economics and Finance, 42. Class Presentation Topic: Discuss the influence of MENA energy exporters on oil price behavior. Oil, macroeconomic policy and growth CDRW (9) Beidas-Strom et al (2011) Gulf Cooperation Council Countries: Enhancing Economic Outcomes in an Uncertain Economy. International Monetary Fund. Cherif, R. and F. Hasanov (2014) Soaring of the Gulf Falcons: Diversification in the GCC Oil Exporters in Seven Propositions. IMF Working Paper WP/14/177. Hvidt, M. (2013) Economic diversification in GCC countries: Past record and future trends. London School of Economics and Political Science. Class Presentation Topic: Discuss the role of oil in development of the GCC (Gulf Cooperation Council) countries. Water scarcity World Bank (2007) Making the Most of Scarcity: Accountability for Better Water Management in the Middle East and North Africa. Julia C Devlin Copyright pending Page 3

4 Becker N and F. Ward (2014) Adaptive Water Management in Israel: Structure and Policy Options. International Journal of Water Resources Development. (online) Organization for Economic Cooperation and Development (2010) Taxation, Innovation and the Environment. Annex B: Water Pricing in Israel. Class Presentation Topic: Discuss water management and pricing policies in Israel Agriculture, food security and the environment CDRW (6) Lampietti, J. et al J (2009) Improving Food Security in Arab Countries. World Bank Discussion Paper. World Bank (2015) Turn Down the Heat, Confronting the New Climate Normal, pp Verner, D and C. Breisinger (2013) Economics of Climate Change in the Arab World: Case Studies from the Syrian Arab Republic, Tunisia and the Republic of Yemen, pp Wodon, Q et al (2014) Climate Change and Migration, Ch. 9. World Bank. Class Presentation Topic: Discuss the potential effects of a changing climate in Yemen. Population, youth and gender CDRW (4) Roudi-Fahimi, F and M. Kent. (2007) Challenges and Opportunities: The Population of the Middle East and North Africa. World Bank (2010) Fertility Decline in the Islamic Republic of Iran : A Case Study. World Bank (2013) Opening Doors: Gender Equality and Development. MENA Development Report. Class Presentation Topic: Discuss gender equality gaps and measures to address these in MENA countries. Project analysis TBA Unemployment and labor markets Gatti et al (2013) Jobs for Shared Prosperity: Time for Action in the Middle East and North Africa. World Bank, Chapters 1,2,5,8 World Bank (2014) Egypt; More Jobs Better Jobs. World Bank (2015) Labor Market Dynamics in Libya. World Bank (2007) Iran: Employment and Labor Markets Study. Class Presentation Topic Discuss labor market performance and outcomes in Egypt, Libya and Iran. Education and health Gatti et al (2013) Jobs for Shared Prosperity: Time for Action in the Middle East and North Africa. World Bank, Chapters 6,9. World Bank (2013) Fairness and Accountability: Engaging in Health Systems in the Middle East and North Africa. World Bank (2007) Iran Health Sector Review. Main Report. World Bank (2007) Morocco: Health Policy Note Towards a More Equitable and Sustainable Julia C Devlin Copyright pending Page 4

5 Healthcare System. Class Presentation Topic: Compare and contrast health sector challenges and approaches in Iran and Morocco. Poverty and social welfare World Bank (2013) Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa. World Bank (2007) Jordan: Poverty Update: Main Report. Mansour W. (2012) The Patterns and Determinants of Household Welfare Growth in Jordan: World Bank Policy Research Working Paper No Vagliasindi, M (2012) Implementing Energy Subsidy Reforms: Evidence from Developing Countries. Ch. 4. World Bank. Class Presentation Topic: Discuss poverty incidence and policy approaches in Jordan Infrastructure Estache, A. et al (2013) Infrastructure and Employment Creation in the Middle East and North Africa. Albino-War, M et al (2014) Making the Most of Public Investment in MENA and CCA. International Monetary Fund. Agenor et al (2005) Public Infrastructure and Private Investment in the Middle East and North Africa. World Bank Policy Research Working Paper Class Presentation Topic: Discuss the role of infrastructure in development in MENA countries. Trade and regional integration CDRW (13) Chaffour, J. (2014) From Political to Economic Awakening in the Arab World: the Path of Economic Integration. World Bank. Rouis, M. and S. Tabor (2013) Regional Economic Integration in the Middle East and North Africa: Beyond Trade Reform. World Bank (2014) Over the Horizon: A New Levant. Class Presentation Topic: Discuss regional integration in MENA countries Industrial policy and export promotion Schiffbauer, M. et al (2015) Jobs or Privileges: Unleashing the Employment Potential Of the Middle East and North Africa, Ch. 3 Freund, C. and M. Jaud (2015) Champions Wanted: Promoting Exports in the Middle East and North Africa. World Bank. World Bank (2014) Turkey: Trading Up To High Income. Country Economic Memorandum. Class Presentation Topic: Discuss export diversification and industrial policy efforts in Turkey. Private sector development Gatti et al (2014) Striving for Better Jobs: The Challenge of Informality in the Middle East and North Africa, Ch. 3. Schiffbauer, M. et al (2015) Jobs or Privileges: Unleashing the Employment Potential Of the Middle East and North Africa, Ch. 1,2,4. OECD (2013) New Entrepreneurs and High Performance Enterprises in the Middle East and Julia C Devlin Copyright pending Page 5

6 North Africa. Class Presentation Topic: Discuss the role of small firms in private sector development in the MENA region. Financial sector development Rocha, R.; Z. Arvai, Zsofia and S. Farazi, (2010) Financial Access and Stability: A Road Map for the Middle East and North Africa. Hussain, M. et al (2015) An Overview of Islamic Finance. IMF Working Paper WP/15/120. Rocha et al (2011) The Status of Bank Lending to SMEs in the Middle East and North Africa. World Bank Policy Research Working Paper Class Presentation Topic: Discuss the challenges of expanding access to financing for SMEs in the MENA region. Governance and institutions CDRW (11,12) World Bank (2015) Trust, Voice and Incentives: Learning from Local Success Stories in Services Delivery in the Middle East and North Africa. World Bank (2003) Better Governance for Development in the Middle East and North Africa: Enhancing Inclusiveness and Accountability. Class Presentation Topic: Discuss the role of governance and institutions in development of the MENA region. Urbanization World Bank (2014) Turkey s Transitions: Integration, Inclusion, Institutions. Ch. 5. World Bank (2006) Egypt: Urban Sector Update. World Bank (2006) Morocco Poverty and Social Impact Analysis of Slum Upgrading Program. World Bank (2003) Lebanon Cultural Heritage and Urban Development Project. Class Presentation Topic: Has MENA s urban bias helped or hindered development in the region? Conflict CDRW (13) Ianchovichina, E. et al (2014) Economic Effects of the Syrian War and the Spread of the Islamic State in the Levant. World Bank Policy Research Working Paper Collier, P. and N. Sambonis (2005) Understanding Civil War. Volume 2: Chapter 4. World Bank (2014) Lebanon Economic and Social Impact Assessment of the Syrian Conflict. World Bank (2015) West Bank and Gaza Investment Climate Assessment: Fragmentation and Uncertainty. World Bank (2012) Iraq: Investment Climate Assessment. Class Presentation Topic: Discuss the effects of conflict on economic activity in Iraq and the West Bank and Gaza Julia C Devlin Copyright pending Page 6