Education and Social Protection Systems in Southern and Eastern Mediterranean Countries. MEDPRO Technical Report No. 20/January 2013

This report assesses the current status of the education and social protection systems in 11 southern and eastern Mediterranean countries. It compares these countries using various education indicators and attempts to highlight the main differences in the social protection systems among the countries using qualitative analysis. The report finds that despite the differences among the countries, they share a common feature: when measured by the UN Development Programme’s Human Development Index (HDI), their inequality-adjusted values are significantly lower than their HDI values and ranks when not taking inequality into account. Nevertheless, significant improvements have been achieved in all the quantitative indicators for education, while the qualitative performance is still modest in the majority of the countries studied. As to the social protection aspect, the research reveals that various social protection programmes are being adopted in the 11 countries. As most of their financing is covered by government budgets, however, this places a high fiscal burden on them. Yet few of the countries (Turkey being the most notable) are trying to improve the sustainability of their social insurance schemes.

Le role des politiques monétaires et la convergence macroeconomique sur le développement des systèmes financiers dans les pays du sud de la Méditerranée. = The role of monetary policies and macroeconomic convergence in the development of financial systems in south Mediterranean countries. MEDPRO Technical Report No. 12/April 2012

This MEDPRO Technical Report shows that the monetary and exchange rate policies conducted by central banks in the South Mediterranean region display apparent homogeneity in their operational frameworks, albeit with some specificities and differing degrees of advancement. While central banks state that price stability is their ultimate objective, failures to control interest rates as operational objectives of monetary policy result in monetary authorities resorting to quantitative approaches to monetary policy, meaning that monetary aggregates and credit targets are being used as intermediate targets of monetary policy. An econometric exercise limited to Maghreb countries (Algeria, Morocco, and Tunisia) has been conducted to analyse the potential scenarios of convergence and monetary policy coordination. Given the high structural heterogeneity and the slow pace of real convergence due to weak commercial integration in the Maghreb, results nevertheless show alternative dynamics in the integration of effective nominal exchange rates, as well as a complete convergence dynamic in exchange rate policies. Partial convergence of monetary policies regarding the stabilisation of inflation rates remains an open option for a transitional phase where financial integration is low.

Determinants of Financial Development across the Mediterranean. MEDPRO Technical Report No. 29/February 2013

Casual observation shows that that the financial systems in the southern and eastern Mediterranean are unable (or unwilling) to divert the financial resources that are available to them as funding opportunities to private enterprises. Using a sample of both northern and southern Mediterranean countries for the years 1985 to 2009, this study empirically assesses the reasons underlying such conditions. The results show that strong legal institutions, good democratic governance and adequate implementation of financial reforms can have a substantial positive impact on financial development only when they are present collectively. Moreover, inflation appears to undermine banking development, but less so when the capital account is open. Government debt growth appears to weaken credit growth, which confirms that public debt ‘crowds out’ private debt. Lastly, capital inflows appear to primarily have an income effect, increasing income and thereby national savings, and thus increasing the availability of credit.