Winners, Losers and the Political Economy of the Middle East and North Africa : A brief look at industrial development, trade, productivity and jobs.

Summary The successes and failures of public policies are, to a large extent, influenced by the political and institutional context of economies. This thesis analyzes how the socioeconomic performance of MENA countries is determined by the institutional and political environment of individual countries. Three essays are proposed. The first examines the impact of skills on productivity using a comparison between two countries, Turkey and Tunisia. The second analyzes the impact of subsidies on the performance of firms. The third studies the effect of trade openness on imports of manufactured goods depending on whether firms are in sectors connected to political power or not, in the case of Egypt.The comparative study between Turkey and Tunisia shows that workers' skills do have a measurable impact on productivity in Turkey, but not in Tunisia. In Turkey, import-substitution industrialization was dismantled relatively early, while in Tunisia post-colonial policy abandoned its import-substitution industrialization policy relatively late. As a result, the high skill level of the labor force in Tunisia has not been able to contribute to productivity, unlike in Turkey. Second, the study of government intervention in the form of subsidies to firms in Tunisia shows that, as expected, subsidies allow governments to extend their control over private firms. This policy has had contrasting effects on Tunisian firms. It has favored employment in small firms, while in large firms it has benefited capital. Finally, the last test concerning the Egyptian economy shows that the reduction of trade barriers has benefited firms in sectors where there is no connection between the state and firms. The reduction in tax and customs evasion favors more competitive firms.