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

The political economy is an important determinant of the successes and failures of public policies. This dissertation explores how the political economy has shaped socio-political outcomes. I use a comparative study, a study of a fiscal subsidy, and a case study of trade liberalization to elaborate this point. In the comparative study on Turkey and Tunisia, I observe that workforce skills have a measurable impact on productivity in Turkey, a country that abandoned import substitution industrialization at a relatively early stage. Whereas the post-colonial institutional setting of the economy and relatively later import substitution industrialization in Tunisia is not amenable to harnessing the skills of the workforce for productivity — even if levels of education were historically higher than in Turkey.  A case study on government intervention in the form of firm subsidies in Tunisia finds that governments can use firm subsidies to extend control over the private sector, while still reporting measurable and observable positive benefits to the economy. Lastly, a case study on trade liberalization demonstrated in Egypt that reforms to remove administrative and tariff barriers disproportionately helped firms in industries with no known government cronies and reduced tariff evasion. However, government cronies operating in the historically important natural resource sector still reaped benefits from liberalization reforms.