Policy papers

The objective of this policy brief is to examine the status of global value chains (GVCs) on the two shores of the Mediterranean and provide some insights on how to enhance regional integration. We argue that GVCs will help firms improve their productivity, that SMEs will become more sustainable and generally diversify exports from the region. To achieve this, addressing non-tariff measures, boosting the business environment and improving blue-collar workers skills are all essential.

This paper explores the problem of institutional failure in the Southern Mediterranean Partner Countries (SMPC). After reviewing the most recent empirical research on the effect that institutions have on economic performance, including research done in the framework of EMNES, the paper identifies two types of institutional failure pervasive in the region. It concludes with the recommendation that while Type I failure could be remedied by piecemeal institutional reforms, the more pernicious Type II failure is not likely to be corrected without a structural transformation of the balance of political power in the affected country.

The analysis of labour supply in South Mediterranean Countries indicates that only a package of long term policies can foster employment creation. The quality of education systems needs to be improved to deliver good employees for companies and, potentially, new entrepreneurs. Social security protection needs to be extended to the private sector to make it more attractive to workers and to reduce informality, whereby it strongly contributes to the endogenous creation of opportunities. Institutional reform at the government level and in the market can significantly support this process. In the medium term, the combination of a growing population and low educational attainment with poor labour opportunities in the region, will only serve as a push factor and foster outflows of migrants.

Using a sustainable migration policy framework that benefits both origins and destinations remains of crucial importance. Lastly, our research also indicates that data availability in the region is a major obstacle to identifying labour market problems and formulating appropriate policy measures but also to monitoring their implementation.