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Winners, Losers and the Political Economy of the Middle East and North Africa : A brief look at industrial development, trade, productivity and jobs Michelle Marshalian To cite this version: Michelle Marshalian. Winners, Losers and the Political Economy of the Middle East and North Africa : A brief look at industrial development, trade, productivity and jobs. Economics and Finance. Université Paris sciences et lettres, 2019. English. NNT : 2019PSLED056. tel-03222257 HAL Id: tel-03222257 https://tel.archives-ouvertes.fr/tel-03222257 Submitted on 10 May 2021 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. Préparée à Dauphine - PSL Winners, Losers and the Political Economy of the Middle East and North Africa: A brief look at industrial development, trade, productivity and jobs Soutenue par Composition du jury : Michelle MARSHALIAN El Mouhoub MOUHOUD Le 28 Juin, 2019 Dauphine- PSL Directeur Mohamed Ali MAROUANI Paris 1 Panthéon-Sorbonne Co-Directeur École doctorale nonuméro Philippe DE VREYER École doctorale d’économie Dauphine-PSL Président Leila BAGHDADI Tunis Business School Rapporteur Spécialité Steffen HERTOG London School of Economics Rapporteur Économie Stijn BROECKE OECD Suffragant Ishac DIWAN Columbia University; PSL Suffragant Adeel MALIK Oxford University Suffragant UNIVERSITÉ PARIS-DAUPHINE,PARIS SCIENCES ET LETTRES (PSL) SUBMISSION FOR DOCTORAL THESIS Winners, Losers and the Political Economy of the Middle East and North Africa: A brief look at industrial development, trade, productivity and jobs A thesis submitted in fulfillment of the requirements for the degree of Doctoral Degree in Economics Développement, Institutions et Mondialisation (DIAL) Laboratoire d’Économie de Dauphine (LEDa) October 30, 2019 iii “The past resembles the future more than one drop of water resembles another. ” Ibn Khaldun, The Muqaddimah: An Introduction to History “We should not be ashamed to acknowledge truth from whatever source it comes to us, even if it is brought to us by former generations and foreign people. For him who seeks the truth there is nothing if higher value than truth itself ” Albert Hourani, A History of the Arab Peoples iv Abstract Résumé Les succès et les échecs des politiques The political economy is an important publiques sont, en large partie, sont determinant of the successes and fail- influencés par le contexte politique et ures of public policies. This disserta- institutionnel des économies. Cette tion explores how the political economy thèse analyse la manière dont les ré- has shaped socio-political outcomes. I sultats socio-économiques des pays de use a comparative study, a case study la région MENA sont déterminées par of a fiscal subsidies, and a case study l’environnement institutionnel et poli- of liberalization to elaborate this point. tique des différents pays. Trois es- In the comparative study on Turkey and sais sont proposés. Le premier étudie Tunisia, I observe that workforce skills l’impact des qualifications sur la pro- have a measurable impact on produc- ductivité à l’aide d’une comparaison en- tivity in Turkey, a country that aban- tre deux pays, la Turquie et la Tunisie. doned import substitution industrializa- Le second analyse l’impact des subven- tion at a relatively early stage. Whereas tions sur les performances des firmes. the post-colonial institutional setting of Le troisième étudie l’effet de l’ouverture the economy and relatively later import commerciale sur les importations des bi- substitution industrialization in Tunisia ens manufacturés selon que les firmes is not amenable to harnessing the skills font partie des secteurs connectés au of the workforce for productivity — pouvoir politique ou pas, dans le cas de even if levels of education were histor- l’Égypte. ically higher than in Turkey. A case study on government intervention in the L’étude comparative Turquie-Tunisie, form of firm subsidies in Tunisia finds montre que les compétences des tra- that governments can use firm subsi- vailleurs ont bien un impact mesurable dies to extend control over the private sur la productivité de la Turquie, sector, while still reporting measurable mais pas en Tunisie. En Turquie, and observable positive benefits to the l’industrialisation par substitution aux economy. Lastly, a case study on lib- importations a été démantelée relative- eralization demonstrated in Egypt that ment tôt, alors qu’en Tunisie la politique reforms to remove administrative and postcoloniale a abandonné sa politique tariff barriers disproportionately helped d’industrialisation par substitution aux firms in industries with no known gov- importations relativement tard. En con- ernment cronies and reduced tariff eva- séquence, le haut niveau des compé- sion. However, government cronies op- tences de la main-d’œuvre en Tunisie n’a erating in the historically important nat- pas pu contribué à la productivité à la ural resource sector still reaped benefits différence de laTurquie. Ensuite, l’étude from liberalization reforms. de l’intervention gouvernementale sous v forme de subvention auprès des firmes le dernier essai concernant l’économie en Tunisie, montre que, comme attendu, égyptienne montre que la réduction les subventions permettent aux gou- des barrières commerciales a davantage vernements d’étendre leur contrôle sur bénéficié aux firmes présentes dans les les entreprises privées. Cette politique secteurs dans lesquels on n’observe pas a produit des effets contrastés sur les de lien de connexion entre l’Etat et les entreprises tunisiennes. Elle a favorisé entreprises. La réduction de l’évasion l’emploi dans les petites entreprises, fiscalo-douanière favorise les firmes plus tandis que dans les grands entreprises, compétitives. c’est le capital qui en a bénéficié. Enfin, vii Acknowledgements First and foremost, I would like to thank my jury, Leila Baghdadi, Ishac Diwan, Steffen Hertog, Adeel Malik, Philippe deVreyer, Stijn Broecke. Your attention to my work and the feedback you have given me has improved my PhD and helped me learn how to question my own work. Secondly, I would like to thank my direc- tors El Mouhoub Mouhoud and Mohamed Ali Marouani, without whom, none of this would have been possible. I thank also the various people who have validated (and helped me re-consider) my work. Over the past few years, this has included Francisco Serranito, François Libois, Clementine Garrouste, Emmanuelle Lavallée, Chahir Zaki, Tina Soriede, Quoc-Anh Do, Daniela Scur, Thomaz Teodorovicz, Rim Chabbeh, Hassen Arouri, Monji ben Chabin, Bob Rijkers, Steve Bond, Julien Gour- don, the people at the Economic Research Forum and the list definitely goes on. Un- fortunately, my memory has a present-time period bias, and there have been many more people who have supported me along the way. I would like to take a moment to elaborate a bit more about Mohamed Ali’s con- tribution in particular. I learned more from my interaction with him than in my 6 years of work experience prior to starting my PhD, and I have him to thank for teaching me how to be above all, human. Next, I would like to acknowledge my other co-authors, Gunes and Ulas, through whom, I’ve learned how to agree and disagree, how to check and re-check and how to come to a consensus on what we can confidently say. I have a special thanks to people who have helped me edit this book. Including my (poor) family members who put up with my Frenchified English, Natalie for the first round, and Richard for the second round. I also have to give thanks to my friends who supported me and reviewed my work Irit, Korin, Cem, Ana, Morgan, Lam and Austin; and the team at Leda including Clara, Doriane, Charlotte, Christian, Manuel, Raphael, Thomas, Sandra, Dio, Arnold, Etienne(s), Alexis, Lexane, and all the others who have provided inspiration at Dauphine. There is also a list of people who provided moral supported over the years. Joe, who as my first real mentor. Even though I lost him last year, he is still one of the most important people who has brought me to where I am today. Next, Laura who was always available to talk me through my existential crises. Chloe, without whom I would have never pushed hard enough to do my PhD. Irit, who was there for me when times got tough. Monica, who helped me learn how to focus with popcorn and tapatio. Sharon, my good friend and close confidant from post-Sciences Po years. Francesco, for checking up on me. Cem, who came stumbling into my life a year ago and with whom I will definitely be celebrating this 28th of June. Sebastian, viii who definitely lost the bet (on when I would finish my PhD) and now needs teach me how to drive manual. Last but not least, my family has made this possible for me: To my sisters Natalie, Niyera, and Danila. To Richard, my main competition for being crowned Cesar in our family household and Lawrence, the funnier, and wiser brother. To my cousins and in particular Sally, Hrant and Liza. I would also like to thank all my old colleagues who have helped me develop as an analyst and researcher, Wen-Hao, Gwenn, Nicole, Maud, Paul, Mark, Tatyana and Reyes, among the ton of other people who have supported me in the past either with technical support, or just a coffee. A special mention goes to Sama Aweidah, who taught me what it meant to have strength in the face of adversity.