Found 12 article(s) for author 'Ishac Diwan'

Crony Capitalism in the Middle East

Crony Capitalism in the Middle East: Business and Politics from Liberalization to the Arab Spring. Ishac Diwan, June 2019, Book, “The popular uprisings in 2011 that overthrew Arab dictators were also a rebuke to crony capitalism, diverted against both rulers and their allied businessmen who monopolize all economic opportunities. While the Middle East has witnessed a growing nexus between business and politics in the wake of liberalization, little is discussed about the nature of business cronies, the sectors in which they operate, the mechanisms used to favour them, and the possible impact of such crony relations on the region’s development. Combining inputs from leading scholars in the field, Crony Capitalism in the Middle East: Business and Politics from Liberalization to the Arab Spring presents a wealth of empirical evidence on the form and function of this aspect of the region.Link

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Is Oil Wealth Good for Private Sector Development?

Is Oil Wealth Good for Private Sector Development? Melani Cammett, Ishac Diwan, 2019, Paper, “When do autocratic rulers in oil-producing countries support private sector development? We argue that the size of oil rents per capita has an important effect on ruler support for the rule of law, respect for private property rights, and other factors that promote private investment. However, the effect is not linear, but instead resembles a U-curve: Only in countries with middle levels of per capita oil wealth would we expect the state to repress the private sector. At both low and high levels of oil wealth, autocrats interested in regime preservation would support and promote the private sector. Descriptive analyses of governance measures in Middle Eastern oil producers situated in comparative perspective offer empirical support for these propositions. These arguments and findings contradict some of the key claims in the resource curse literature but also differ from arguments that offer historically grounded explanations for development among oil exporters.Link

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Debunking myth: economic values in the Arab World through the prism of opinion polls

Debunking myth: economic values in the Arab World through the prism of opinion polls. Ishac Diwan, June 2018, Paper, “Using World Value Survey opinion poll data, we empirically characterize the economic values and norms held by individuals in the Arab world, in comparison to values held in the rest of the world. We find that, contrary to some common beliefs, there are many values that predispose citizens of Arab countries to be part of a market economy, including a high level of work ethics, comfort with competition and the work of markets, and a high level of economic motivation.Link

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Private Banking and Crony Capitalism in Egypt

Private Banking and Crony Capitalism in Egypt. Ishac Diwan, 2016, Paper, “In Egypt, the bulk of bank loans during 2003-2010 went to politically connected firms. At the same time, the banking sector was liberalized increasingly operated around competitive and profit-maximizing principles. A key puzzle that the paper tries to answer is why private banks may lend in preferential ways to politically connected firms (PCFs) in such an environment. Using a rich corporate dataset, we find that politically connected firms did not have higher profitability compared to non-politically connected firms. This suggests that PCFs were perceived to have lower risk. Indeed, we find evidence that this was the case, and that lower risk reflected higher access to bailout guarantees (implicit or explicit), as happened in earlier periods, and/or higher perceived growth opportunities.Link

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Do Political Connections Reduce Job Creation? Evidence from Lebanon

Do Political Connections Reduce Job Creation? Evidence from Lebanon. Ishac Diwan, July 1, 2016, Paper. “Using firm-level census data, we determine how politically-connected firms (PCFs) reduce job creation in Lebanon. After observing that large firms account for the bulk of net job creation, we find that PCFs are larger and create more jobs, but are also less productive, than non-PCFs in their sectors. On a net basis, at the sector-level, each additional PCF reduces jobs created by 7.2% and jobs created by non-PCFs by 11.3%. These findings support the notion that politically-connected firms are used for clientelistic purposes in Lebanon, exchanging privileges for jobs that benefit their patrons? supporters.Link

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Pyramid Capitalism

Pyramid Capitalism. Ishac Diwan, July 2015, Paper, “This paper uses an original database of 469 politically connected firms under the Mubarak regime in Egypt to explore the economic effects of close state-business relations. Previous research has shown that political connections are lucrative. The paper addresses several questions raised by this research. Do connected firms receive favorable regulatory treatment? They do: connected firms are more likely to benefit from trade protection, energy subsidies, access to land, and regulatory enforcement. Does regulatory capture account for the high value of connected firms? In the sample, regulatory capture as revealed by energy subsidies and trade protection account for the higher profits of politically connected firms. Do politically connected firms hurt aggregate growth?Link

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Fifty Years of Fiscal Policy in the Arab Region

Fifty Years of Fiscal Policy in the Arab Region. Ishac Diwan, May 2015, Paper. “The paper looks at the evolution of public finance in a select number of MENA countries over the past 50 years. The review covers the size of government, how it is financed, and the composition of expenditures and revenue. The size of government expenditures has swung dramatically over time, moving from an average in the region of over 50% of GDP in the 1980s to about 25% of GDP in the 2000s. We evaluates how such changes were implemented over time and assess the current fiscal situation in light of the inheritance of the past. We also…Link

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Pyramid Capitalism: Cronyism, Regulation, and Firm Productivity in Egypt

Pyramid Capitalism: Cronyism, Regulation, and Firm Productivity in Egypt. Ishac Diwan, March 2015, Paper. “Using an original database of 469 politically connected firms under the Mubarak regime in Egypt, we explore the economic effects of cronyism. Previous research has shown that cronyism is lucrative. We address numerous questions raised by this research. Do crony firms receive favorable regulatory treatment? They do: connected firms are more likely to benefit from trade protection, energy subsidies, access to land, and regulatory enforcement. Does regulatory capture account for the high value of connected…” Link

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Business Models for Commercializing African Agriculture

Business Models for Commercializing African Agriculture. Ishac Diwan, 2014, Paper. “This article explores the strengths and weaknesses of various business models that can make agriculture behave more like industries–enjoying high levels of productivity irrespective of systemic challenges. The main idea is to supplement the uncoordinated and untargeted provision by the state of all the inputs needed to modernize agriculture, by the provision of bundles of services that resolve many market inefficiencies in ways that are adapted to particular environments. The ultimate goal is to creat islands of quality even as markets remain incomplete…” Link

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