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Department of Economics

Applied economics of the Middle East 1

Course Code:
15PECC028
Unit value:
0.4
Taught in:
Term 1

This module is about the economic structures, institutions and policy challenges in the countries of the Middle East and North Africa (MENA). The module starts with a broad economic history of the region since the mid 19th Century and goes on to address selected aspects of economic policy in the contemporary period in areas related to natural and human resources. Among the topics covered are: the oil sector, labour migration and capital flows, problems of industrialization in resource based economies, and population transition. For the purposes of this course, the MENA region comprises the Arab countries, Iran and Turkey.

Objectives and learning outcomes of the course

Objectives of the Course:

  • To conceptualise the structural characteristics and features of the MENA region economies and to offer a consistent framework for the study of these economies 
  • To analyse critically the economic problems and policies relating to the two broad areas of natural and human resources in this region 
  • To explore and discuss critically specific policy approaches to economic problems in the region relating to oil and human resources. 
  • To understand the linkages amongst the MENA economies through labour and capital flows.

By the end of this course, you should be able to:

  • Understand the socio-economic features and structural characteristics of the MENA economies
  • Develop a clear understanding of the economic history of the region since the 19th Century in general, and be able to assess the impact of integration into the emergent international economy, in particular.
  • Attempt to classify the MENA economies according to their different structural characteristics (oil and non-oil economies, labour surplus and labour deficit economies, small and large, agrarian economies, etc)
  • Discuss and apply key concepts of economic policy analysis to contemporary problems and opportunities in areas relating to the key natural resource (oil) and human resources (population and migration) within the MENA countries
  • Explore the implications of the theory of exhaustible resources for the oil sector and to analyse the role and significance of OPEC in oil price determination at an international level
  • Understanding of the problems of industrialization in resource based economies
  • Understanding of the process of population transition in the MENA region and its implications for economic growth.

Scope and syllabus

Areas covered by this module are:

  1. Introduction to the economic history of the modern Middle East
  2. Middle East oil and its impact (including a study of the formation of OPEC, its history and prospects, models of oil price determination and OPEC pricing and output behaviour)
  3. The significance of labour and capital flows between Middle Eastern countries and their developmental implications
  4. Population transition, its causes and implications.
  5. Problems of structural transformation in resource rich countries with specific reference to industrialization problems of Middle Eastern economies; and

In general, topics are discussed with reference to representative countries from four broad country groups, namely,

  1. the low absorption oil exporters,
  2. the high absorption oil exporters,
  3. the small non-oil economies, and
  4. the large non-oil economies of the Middle East.

Students are encouraged to specialise with reference to selected countries and/or groupings.

Method of assessment

Assessment weighting: Exam 70% / coursework 30% (1 essay). All coursework is resubmittable.

Suggested reading

Useful Texts:
  • Richards A. and J. Waterbury (2008), A Political Economy of the Middle East, State: Class and Economic Development, 3rd edition, Boulder Colorado: Westview.
  • Owen, R and Sevket Pamuk (1998) A History of the Middle East Economies in the Twentieth Century, London : I. B. Tauris.
  • Shafik, N. (ed., 1998a), Economic Challenges Facing Middle Eastern and North African Countries – Alternative Futures, Basingstoke and London: Macmillan Press.
  • Shafik, N. (ed., 1998b), Prospects for Middle Eastern and North African Economies – From Boom to Bust and Back?, Basingstoke and London: Macmillan Press.
  • Handoussa H. (ed., 1997), Economic Transition in the Middle East – Global Challenges and Adjustment Strategies, Cairo: The American University in Cairo Press.
  • Sirageldin, I. (ed., 2001). Human Capital: Population Economics in the Middle East (Cairo: AUC Press).
  • Salehi-Isfahani, D. (ed., 2001), Labour and Human Capital in the Middle East: Studies of Markets and Household Behaviour, Reading: Ithaca Press.
  • Owen, R. (2004), State, Power and Politics in the Making of the Modern Middle East, 3rd edition, London: Routledge.
  • Henry, C.M. and R. Springborg (2005), Globalization and the Politics of Development in the Middle East, Cambridge: Cambridge University Press.
  • Cremer, J. and Salehi-Isfahani, D.J. (1991), Models of the Oil Market, Harwood Academic Publishers.
  • Issawi, C. (1982), An Economic History of the Middle East and North Africa, New York: Columbia UP.
  • Griffin, J. M. and Teece, D. J. (1982), OPEC Behaviour and World Oil Prices, London: Allen & Unwin.
  • Richards A. and J. Waterbury (1996), A Political Economy of the Middle East, State: Class and Economic Development, 2nd edition, Boulder Colorado: Westview.
  • Shafik, N. (ed., 1998a), Economic Challenges Facing Middle Eastern and North African Countries - Alternative Futures, Basingstoke and London: Macmillan Press.
  • Hakimian, H. and Z. Moshaver (eds, 2001), The State and Global Change: The Political Economy of Transition in the Middle East and North Africa, London: Curzon Press.
  • Handoussa H. (ed., 1997), Economic Transition in the Middle East - Global Challenges and Adjustment Strategies, Cairo: The American University in Cairo Press.
Common Data Sources:
  • World Bank, World Development Report, annually (contains useful development data for various regions including MENA); an electronic database of the World Bank’s indicators is found in World Development Indicators (WDI), CD-ROM, updated annually, Washington D.C.
  • ERF (1998), Economic Trends in the MENA Region, (annual), The Economic Research Forum for the Arab Countries, Iran and Turkey, Cairo: ERF (electronic version also available on the net, see ERF site below).
  • OPEC, Annual Statistical Bulletin, annual report with much data on oil; an electronic version of this major oil database is found in Asb, (diskette available from the library’s periodical room).
Some Useful Web sites on Middle East: