?Challenges and Reforms of Economic Regulation in MENA Countries: A Political Economic Approach,? by Jitendra Uttam, underlines the areas of focus of any regulatory reform strategy in the specific context of the political economy of the MENA region. The author argues that the main characteristic of the region is its ?anti-productive? bias. This bias has translated into ?circulation economies? and ?rentier states? with an ensuing consumer-led growth. These characteristics are such that any ?best practice? big-bang regulatory reform focusing exclusively on freeing markets could be a recipe for disaster. Instead, the author suggests a ?second-best? approach that consists of moving toward freer markets along with an alignment of national regulatory patterns much influenced by politics and the dynamics of interest groups. He proposes a gradual approach toward a pro-competitive free market system where the political structure is also made to conform to this structure. He then proposes sector-specific policy recommendations for international trade, banking, telecommunications, and e-commerce, and highlights some necessary institutional mechanisms for sectoral regulation.

?Challenges and Reforms of Economic Regulation in MENA Countries,? by Chedly Allen Mgaieth, deals with regulatory issues pertaining to the media, the communications industry, and e-commerce. The author argues that these sectors have many peculiarities that call for special regulation. This claim is even more valid given the recent developments in the environment within which these sectors operate. Digitization and the democratization of data through the developments in information technology and the Internet are among the new characteristics that call for new approaches to the old principles of regulation. In addition to the prerequisites of consumer protection, competition, taxation, and the protection of intellectual property rights, new regulations in these sectors should aim at guaranteeing access and fair admission to content and information. The author stresses that regulations should also lead to bridging the digital and information gaps in society.

?Reforms and Optimal Regulatory Design in MENA Countries,? by Anastassios Gentzoglanis evaluates the reforms of the telecommunications sector undertaken in Morocco, Egypt, Lebanon, Jordan, and Mauritania. By contrasting these reform experiences and trying to explain differences in results, the author argues that countries that have set up independent regulatory agencies and mechanisms that effectively resolve the problems of information asymmetry, market contestability, enforcement, credibility, and skills, have achieved better results than others. For instance, he asserts that privatization or other types of reform in the telecommunications sector, combined with the existence of a separate regulatory authority, increases penetration ratio and the industry?s connection capacity, and reduces the price of local and international calls. In addition, privatization is more likely to be successful, and socially optimal, if the objective is to create a pro-competitive environment in the sector, rather than granting exclusive rights to privatized incumbents

?The Business, Economic, and Policy Implications of E-Commerce: Lessons for MENA Countries,? by Imad Moosa, identifies the likely effects of the development of e-commerce on the countries of the region. The author disaggregates these effects into the institutional and organizational changes that are required in terms of: networked firms and consumers, interactive markets, advertising, consumer search, product choice and pricing, and the emergence of new competitive, product, price, and communication strategies. He then underlines the economic effects of e-commerce in terms of output, prices, productivity, and interaction with a more globalized world. The author also points out some of the illusions pertaining to the impact of the ?new economy? animated by the spectacular developments in the Internet, informatics, and telecommunications services. He argues that the potential increase in productivity generated by the ?new economy? has been exaggerated.
The policy implications of the development of e-commerce cover a wide range of areas, notably, technology, trade, regulation, society, finance, and the relationship between government and business. All these implications are important for MENA countries, but the best lesson for the countries of the region, Moosa argues, is that e-commerce is not a magic cure for their economic problems.

?The Promises and Prospects of an IT Revolution in Egypt,? by Deborah Wheeler, presents an assessment of the prospects for an Information Technology (IT) revolution in Egypt, based on a fieldwork study. After defining what ?living at e-speed? means and analyzing the enabling factors, the author examines the prospects of an IT revolution in Egypt based on the presence of seven prerequisites namely: capital, connectivity, committed leadership, culture for change, creative vision, risk taking, and competition. The author points to the mushrooming of Internet cafes, the beginning of e-commerce, the high penetration of IT, and the presence of e-commerce among certain classes. But several factors continue to be a hindrance and need to be seriously looked into by regulators and policy makers alike. In order to achieve an IT revolution the author argues that Egypt has to improve the physical infrastructure, increase IT-related investment, and reduce the digital divide between rich and poor. Limited and concentrated connectivity, and bureaucratic practices, preclude the proper use of IT to boost business and economic growth. Further, various ?cultures? are a hindrance towards building an IT revolution: a ?culture of conformity? that hinders the bridging of the digital divide and acts as a serious break on the development of creative vision and innovation; a ?culture of risk aversion? that affects the development of a business environment compatible with living at e-speed; and the lack of a ?competition culture?, are all factors perceived by the author as challenges facing Egypt.
?Cost Efficiency of Commercial Banks in Kuwait and Need for Regulatory Reforms,? by Abid Burki, estimates the cost of efficiency of six commercial banks in Kuwait using the Data Envelopment Approach (DEA) and adopting the intermediation and production approaches to the definition of bank outputs and costs. He also disaggregates measures of cost efficiency, into technical and allocative efficiencies, and links these measures to certain bank attributes.

The main finding of the study is that the cost efficiency of banks in Kuwait is very low. This mostly stems from allocative inefficiency (i.e. the inability of banks to use the different inputs in optimal proportions) rather than technical inefficiency (which refers to the inability of banks to reduce input costs for a given level of output or expand output for given levels of input). Most Kuwait banks operate on the flatter portion of their long-term average cost curve, pointing to the limited scope for efficiency gains through increasing the scale of production. In linking efficiency measures to bank attributes, the author found that, other things being equal, smaller banks with high liquid assets, higher numbers of local branches, and lower numbers of foreign branches, tend to be more efficient. The author suggests that there is a possibility of significant merger and acquisition activity in the banking sector of Kuwait.

In ?Accounting Standards: Country, Region or World Perspective,? John Parkinson stresses the dilemma faced by regulators when it comes to choosing the ?right? accounting standards. He presents arguments for and against each of the options of choosing between international, regional, or individual country standards. Ideally, argues the author, accounting standards should be determined in light of the interests of both the professional accountants and the end users themselves. He suggests using a decision tree whose structure is determined by a list of pertinent questions regarding the appropriateness of each one the different accounting standards. By following the path through the decision tree, an ?appropriate? form of economic regulation can be determined.

?The Regulation of International Trade within the World Trade Organization (WTO),? by Mohsin Helal, presents an overview of the main WTO agreements. In the author?s view, among the most important agreements of relevance to regulation in MENA countries, are the Technical Barriers to Trade (TBT) and Phytosanitary (SPS) Agreements. These agreements are aimed at ensuring that regulations, standards, and certification procedures do not become obstacles to trade. Some of the regulations within these agreements are mandatory, while others are voluntary. The mandatory regulations are related to human heath and safety, plant and animal life, and the environment. The agreements recognize the right of countries to adopt their own specific standards under special circumstances, provided that the other WTO members are informed about the proposed regulation. Otherwise, countries are required to use international standards whenever appropriate.

?The International Dimension of Regulatory Reform: With Application to Egypt,? by Roger Noll is reprinted, with permission from the Egyptian Center for Economic Studies, from their Distinguished Lecture Series. In his essay, Noll analyses the international dimension of domestic regulatory reform, and the complementarity between trade liberalization and reform. The discussion considers the process of formulating domestic regulatory reform policies and the benefits of incorporating these issues into international trade negotiations, particularly when viewed as part of broad economic policy, rather than as spector-specific industrial policy. He concludes that more open trade regimes assist regulatory reform by creating both foreign pressure for reform, in order to eliminate indirect barriers to trade, and domestic pressure, given the distorting aspects of inefficient regulation that harm domestic industries, and new opportunities for international trade.
?Textiles and Clothing in the Mediterranean Region: Opportunities and Challenges of Returning Textiles and Clothing to GATT Disciplines,? by Hanaa Kheir-El-Din and Maamoun Abdel-Fattah, assesses the performance of the main exporters of textiles in the Mediterranean region. The authors analyze the likely impact on these countries of the full implementation of the Agreement on Textile and Clothing (ATC), a transitional agreement regulating trade in these commodities before the final removal of the Multifiber Agreement (MFA). The authors argue that the final impact of ATC on the countries under study (Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia, and Turkey), depends on whether the quotas previously implemented under MFA were binding or not, whether production and export capacity are limited or restrained, and on the way these countries respond to the possible erosion of their preferential treatment. The net impact will depend on the ability of these countries to adapt to the new, more efficient global environment, notably through measures aimed at reducing cost and improving competitiveness, and by providing an enabling legal and institutional framework.