This paper investigates the impact of citizens' perceptions of economic and political conditions on nonviolent uprisings. For a global sample of high-income (Europe) and developing economies (Sub-Saharan Africa, South Asia, East Asia and the Pacific, Latin America, and Middle East and North Africa), on average, negative perceptions of political conditions have a significant positive effect on the number of anti-government protests and general strikes while negative perceptions of economic conditions do not, even after accounting for actual economic conditions and the quality of governance. This holds for European and high-income countries but not for developing economies where both economic and political perceptions matter. The international contagion of protests attenuates this regional heterogeneity, possibly implying that in Europe, the incidence of uprisings in nearby countries tends to generate protests at home through its effect on political perceptions. This invites the possibility of countries perennially facing vicious cycles of protests. Overall, the effects of political perceptions and protest contagion are robust to the inclusion of numerous control variables, seemingly valid instrumental variables, alternative count-data estimators, and sample composition.

This paper examines the role of data transparency in explaining gross domestic product (GDP) growth forecast errors - the difference between forecasted and realized growth. On average, a one standard deviation increase in the log of a country's Statistical Capacity Index, a measure of data capacity and transparency, is associated with a decline in absolute forecast errors by 0.44 and 0.49 percentage points for World Bank and International Monetary Fund (IMF) forecasts, respectively. The role of the overall data ecosystem, not just elements related to growth forecasting, is important for forecast accuracy. The study also establishes that forecast errors are large, the Middle East and North Africa region has the largest forecast errors among the world regions, and World Bank forecasts are more accurate and less optimistic than those from the IMF and the private sector.

The study explores the effects of data transparency on economic growth for developing economies over a unique time period - at the onset of the 2007-2009 global financial crisis and thereafter. Data transparency is defined as the timely production of credible statistics as measured by the statistical capacity indicator. The paper finds that data transparency has a positive effect on real gross domestic product per capita during a period of considerable uncertainty. The estimates indicate an elasticity of the magnitude of 0.03 percent per year, which is much larger than the elasticity of trade openness and schooling in the estimation sample. The empirics employ a variety of econometric estimators, including dynamic panel and cross-sectional instrumental variables estimators, with the latter approach yielding a higher estimated elasticity. The findings are robust to the inclusion of several factors in addition to political institutions and exogenous commodity-price and external debt-financing shocks.

Treating data collected pre- and post-COVID-19 as a quasi-experiment, this paper examines the importance of presumed enablers and safeguards in driving the observed expansion of digital payments and digital financial inclusion. The analysis interacts drivers of digital payment usage with a country-specific proxy of the severity of the COVID-19 shock, leveraging variation in both the drivers and the quasi-treatment (the COVID-19 shock) to identify the parameters. Although regulation of banks and digital economic activity were correlated with digital payments before and during the pandemic, the capabilities of users and connectivity (to electricity, the internet, and mobile telephony) were responsible for increased use of digital financial services in response to the shock. An interpretation is that governments and the private sector were able to overcome underdeveloped banking systems and weak regulation of the digital economy, but only where there was adequate digital infrastructure, connectivity, and a high share of the population that understood and could make use of digital payments.

No AccessMiddle East and North Africa Economic Update6 Apr 2023Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North AfricaAuthors/Editors: Roberta Gatti, Daniel Lederman, Asif Islam, Federico Bennett, Bo Pieter Johannes Andree, Hoda Assem, Rana Lotfi, and Mennatallah MousaRoberta Gatti, Daniel Lederman, Asif Islam, Federico Bennett, Bo Pieter Johannes Andree, Hoda Assem, Rana Lotfi, and Mennatallah Mousahttps://doi.org/10.1596/978-1-4648-1974-2SectionsAboutPDF (5.9 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract: Growth is forecasted to slow down for the Middle East and North Africa region. The war in Ukraine in 2022 exacerbated inflationary pressures as the world recovered from the COVID 19 pandemic-induced recession. The response by central banks to raise rates to curb inflation is slowing economic activity, while rising food prices are making it difficult for families to put meals on the table. Inflation, when it stems from food prices, hits the poor harder than the rich. Moreover, food insecurity in MENA has been rising over decades. The immediate effects of food insecurity can be a devastating loss of life, but even temporary increases in food prices can cause long-term irreversible damages, especially to children. The rise in food prices due to the war in Ukraine may have altered the destinies of thousands of children in the region, setting them on paths to limited prosperity. Food insecurity imposes challenges to a region where the state of child nutrition and health were inadequate before the shocks from the COVID-19 pandemic. The report discusses policy options and highlights the need for data to guide effective decision making. Previous book FiguresreferencesRecommendeddetails View Published: April 2023ISBN: 978-1-4648-1974-2 Copyright & Permissions Related TopicsAgricultureHealth Nutrition and PopulationMacroeconomics and Economic Growth KeywordsDATA OPACITYECONOMIC GROWTHFORECASTING GROWTHINADEQUATE DATA SYSTEMINFLATIONOILOIL EXPORTERSOIL IMPORTERSOIL PRICESRECOVERY PDF DownloadLoading ...

This paper investigates the impacts of job displacement on subsequent labor market outcomes, focusing on differentiated effects by educational groups and gender. The findings show that job separations caused by plant closings result in sizable and long-lasting wage reductions, with an average decline of −7.5 percent over a nine-year period relative to workers who did not experience job losses. A stronger effect is estimated for highly educated workers than for low educated workers, with initial effects being 18.4 and 9 percent wage drops, respectively. For working hours, the effect on low educated workers is double the effect on highly educated workers, with 3.0 and 1.5 additional hours per week, respectively. Using the rotating panel of the survey, difference in differences coefficients are estimated, removing time-invariant individual heterogeneity. Compared to ordinary least squares, the difference in differences estimates reduce the magnitude of the average impacts of plant closing on wages, from −7.5 to −4.7 percent, and on working hours from 1.4 to 0.53 additional hours. These results suggest that the ordinary least squares estimates are upwardly biased due to omitted individual worker heterogeneity. The paper discusses another potential remaining source of endogeneity concerning the quality of the match between employers and workers.

No AccessMiddle East and North Africa Economic Update6 Oct 2023MENA Economic Update, October 2023 - Balancing Act: Jobs and Wages in the Middle East and North Africa When Crises HitAuthors/Editors: Roberta Gatti, Daniel Lederman, Nelly Elmallakh, Torres Jesica, Silva Joana, Lotfi Rana, and Suvanov LotfiRoberta Gatti, Daniel Lederman, Nelly Elmallakh, Torres Jesica, Silva Joana, Lotfi Rana, and Suvanov Lotfihttps://doi.org/10.1596/978-1-4648-2035-9SectionsAboutPDF (3.9 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract: Covid-19. The Russian invasion of Ukraine. Commodity price volatility. The rise of global inflation and interest rates. Currency depreciations among indebted middle-income economies. And now, natural disasters. As a sequence of events, the consequences can be both tragic and long-lasting. After analyzing the macroeconomic prospects of the Middle East and North Africa (MENA) Region, this edition of the regional Economic Update assesses the human toll of macroeconomic shocks in terms of lost jobs and deteriorating livelihoods of the people of MENA. Growth is forecast to decelerate in 2023 after experiencing an oil-price induced growth spurt in 2022 among the high-income oil exporters of the region. Yet as the region continues to recover from the impact of the COVID-19 shock and navigates the heightened volatility in its terms of trade, the region's labor force is contending with the ramifications for their livelihoods of the inflationary pressures associated with currency fluctuations in some countries. The authors estimate that the macroeconomic shocks of 2020-22 led to an additional 5.1 million individuals becoming unemployed in MENA. Will these shocks permanently scar the hard-working people of MENA? The report answers this question by highlighting the trade-offs facing labor markets when facing macroeconomic shocks. A critical trade-off pertains to the loss of jobs versus decreases in real incomes, neither of which is desirable. The report advocates for maintaining the flexibility of real wages and discusses policy options to support the most vulnerable. Previous book FiguresreferencesRecommendeddetails View Published: October 2023ISBN: 978-1-4648-2035-9e-ISBN: 978-1-4648-2035-9 Copyright & Permissions Related RegionsMiddle East and North AfricaRelated TopicsMacroeconomics and Economic GrowthSocial Protections and Labor KeywordsCORONAVIRUSCOVID-19PANDEMIC IMPACTGROWTHINFLATIONLABOR MARKETSADJUSTMENTSCURRENCY DEPRECIATIONS PDF DownloadLoading ...

Public debt in developing economies rose at a fast clip during 2020–2021, at least partly due to the onset of the global COVID-19 pandemic. Nobel laureate Paul Krugman opined in early 2021 that “fighting covid is like fighting a war.” This paper empirically examines trends in debt and economic growth around the onset of three types of calamities, namely natural disasters, armed conflicts, and external debt distress in developing countries. The estimations provide quantitative estimates of differences in GDP growth and debt trends in economies suffering episodes of calamities relative to the trends observed in economies not experiencing calamities. The paper finds that debt and growth evolve quite differently depending on the type of calamity. With the empirical evidence in hand, the authors argue that debt-financed reconstruction efforts after natural disasters, and thus plausibly in the aftermath of the pandemic, can help accelerate growth after such disasters with lower debt burden than in the aftermath of episodes of armed conflict without necessarily incurring the economic costs associated with episodes of debt restructuring. However, the implied upward trajectory of the debt to GDP ratio in developing economies is not trivial, even after post-disaster growth upticks, which raises concerns about long-term debt sustainability after episodes of reconstruction after natural disasters. If so, the time for orderly preemptive debt restructuring might be approaching quickly since recoveries after debt defaults tend to be more costly.

This paper is the first to quantify the relationship between the incidence of the digital economy and long-term frictional unemployment across countries. This paper contributes a novel approach to the literature that had been missing by focusing on the impact of the digital economy on unemployment across a global sample of countries . The resulting evidence indicates that there is a robust, negative partial correlation between national unemployment rates and the incidence of the digital economy, proxied by the share of the adult population that reports using the internet to pay bills. Further, the absolute values of OLS estimates of the partial correlation suggest that it might be higher for developing than high-income economies. Controlling for informal employment appears to be key for removing a positive omitted-variable bias in the estimate of the partial correlation between unemployment and the digital economy, which is due to a negative bivariate correlation between unemployment and informality, and a negative bivariate correlation between informality and the incidence of digital payment. The results from IV estimations suggest that the partial correlation between unemployment and digital payments is negative, with the absolute value of the estimates being larger than the absolute value of the OLS estimates.

Presents the evidence of the "digital paradox" in the Middle East and North Africa (MENA) and explains why general-purpose technologies such as digital tools should have economywide benefits. Whatever the reasons for the slow growth of the region's digital economy, it clearly does not reflect insufficient coverage of information and communication technology (ICT) infrastructure, slow internet speeds, or insufficient access to the internet. Notably, while the use of social media per capita in countries in the region outperforms that in comparator countries, the use of digital payments underperforms that of comparator countries. Yet without wider diffusion of digital payments, the region's digital economy will remain nascent. For society to adopt the widespread use of digital technologies to conduct economic transactions, however, users have to trust the regulatory environment, the financial or banking institutions, and the government itself. In this light, the region's digital paradox might rest on gaps in societal trust.

No AccessMiddle East and North Africa Economic Update6 Oct 2022A New State of Mind : Greater Transparency and Accountability in the Middle East and North AfricaAuthors/Editors: Ferid Belhaj, Roberta Gatti, Daniel Lederman, Ernest John Sergenti, Hoda Assen, Rana Lotfi, Mousa Mennatallah EmamFerid Belhaj, Roberta Gatti, Daniel Lederman, Ernest John Sergenti, Hoda Assen, Rana Lotfi, Mousa Mennatallah Emamhttps://doi.org/10.1596/978-1-4648-1925-4SectionsAboutPDF (6.1 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract: The MENA region is facing important vulnerabilities, which the current crises—first the pandemic, then the war in Ukraine—have exacerbated. Prices of food and energy are higher, hurting the most vulnerable, and rising interest rates from the global tightening of monetary policy are making debt service more burdensome. Part I explores some of the resulting vulnerabilities for MENA. MENA countries are facing diverging paths for future growth. Oil Exporters have seen windfall increases in state revenues from the rise in hydrocarbon prices, while oil importers face heightened stress and risk—from higher import bills, especially for food and energy, and the depreciation of local currencies in some countries. Part II of this report argues that poor governance, and, in particular, the lack of government transparency and accountability, is at the root of the region's development failings—including low growth, exclusion of the most disadvantaged and women, and overuse of such precious natural resources as land and water. Previous book FiguresreferencesRecommendeddetails View Published: October 2022ISBN: 978-1-4648-1925-4 Copyright & Permissions Related TopicsGovernanceMacroeconomics and Economic Growth KeywordsFOOD AND ENERGY PRICESWAR IN UKRAINESUSTAINABLE RECOVERYINFLATIONDEBT VULNERABILITYTRANSPARENCYCOVID-19ECONOMIC GROWTHPANDEMICPRODUCTIVITY PDF DownloadLoading ...

No AccessMiddle East and North Africa Economic Update11 Apr 2022Reality Check: Forecasting Growth in the Middle East and North Africa in Times of UncertaintyAuthors/Editors: Roberta Gatti, Daniel Lederman, Asif Islam, Christina Wood, Ha Nguyen, Rachel Yuting Fan, Rana Lotfi, Mennatallah MousaRoberta Gatti, Daniel Lederman, Asif Islam, Christina Wood, Ha Nguyen, Rachel Yuting Fan, Rana Lotfi, Mennatallah Mousahttps://doi.org/10.1596/978-1-4648-1865-3SectionsAboutPDF (2.8 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract: The Middle East and North Africa economies face an uncertain recovery. The war in Ukraine presents significant challenges to the global economy and the MENA region. Inflationary pressures brought about by the pandemic are likely to be further exacerbated by the conflict. The potential for rising food prices is even higher, which is likely to hurt the wallets of the poor and vulnerable in the region. The COVID-19 pandemic continues to cast a shadow. As the latest variant sweeps over the region, countries grapple with a host of problems depending on initial conditions and policy priorities. The region, like the rest of the world, is not out of the woods yet. Vaccinations remain the effective path out of the pandemic, leading to lower hospitalizations and death rates. Testing helps curb the spread. During times of uncertainty, it is important to not be overconfident about the region's growth prospects. Growth forecasts serve as a significant signpost for policymakers to chart a path forward. Over the last decade, growth forecasts in the MENA region have often been inaccurate and overly optimistic, which can lead to economic contractions down the road due to ebullient borrowing. There is considerable room for the region to improve its forecasts that are largely hindered by opaque data systems, growth volatility and conflict. The MENA region lags considerably in the timely production of credible statistics. A key finding of the report is that the best way to improve forecasters is to provide forecasters with as much good quality information as possible. Previous bookNext book FiguresreferencesRecommendeddetails View Published: April 2022ISBN: 978-1-4648-1865-3 Copyright & Permissions Related TopicsMacroeconomics and Economic GrowthPublic Sector Development KeywordsOILOIL PRICESOIL EXPORTERSOIL IMPORTERSDATA OPACITYINFLATIONECONOMIC GROWTHINADEQUATE DATA SYSTEMRECOVERYFORECASTING GROWTH PDF DownloadLoading ...

Presents evidence of how digital technologies can help to overcome market frictions, summarizing evidence concerning the impact of digitalization on information flows from ride-hailing platforms, on overcoming barriers to physical mobility, and on demand for tourism services. The first example highlights how data from digital platforms provide information on the quality of service providers, thereby overcoming information asymmetries between drivers and riders in ride-hailing apps and contributing to improved service quality over time. The second example describes the role of digital technologies, specifically information and communication technologies (ICTs), in enabling information technology (IT) firms in West Bank to overcome barriers to physical mobility. The third example highlights tourism service providers' use of the internet, which has the effect of reducing the barriers posed by geographic distance and language differences and thereby increasing the demand for tourism services. Digital tools can either create new data or aggregate existing data into information useful to firms, consumers, and investors.

Presents the analytical framework and results concerning the impact of digitalization on gross domestic product (GDP) per capita, revenue productivity of formal manufacturing enterprises, labor market outcomes, and tourism flows. GDP per capita could rise by more than 40 percent when digital infrastructure services approach universal coverage in the low- and middle-income economies of the Middle East and North Africa (MENA). Manufacturing productivity could rise by double digits when all formal manufacturing enterprises adopt business websites, and jobs in the sector could increase significantly. Furthermore, both results could occur relatively quickly if the digitalization of enterprises targets low-productivity firms first. Tourist arrivals could increase by 70 percent when the MENA region reaches the maximum possible business-to-consumer (B2C) scores, creating a significant number of jobs. All adults adopting digital payments could virtually eliminate frictional unemployment and almost double female labor force participation (FLFP). The issue, however, remains how fast the region's population can achieve universal coverage.

Discusses the three essential pillars—digital infrastructure, digital payment system, and regulatory framework for e-commerce—underpinning the creation of an enabling digital environment and a well-functioning digital economy, exploring the performance of countries in the Middle East and North Africa (MENA) compared to other countries at similar levels of gross domestic product (GDP) per capita. While these pillars prove necessary, they remain insufficient. MENA countries significantly underperform in digital payments, deviating by 15 percent from its predicted adoption level, conditional on the level of development. The lag in digital payments exists not only because of lagging information and communication technology (ICT) infrastructure, nor apparently because of banking sector constraints, but rather because this underperformance applies not only to digital payment methods but also to traditional payment systems. A modernized regulatory framework, or one flexible enough to adapt to new technologies, would help to build the trust needed to induce consumers to shift away from using cash.