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In this paper, authors examine the political economy and consequences of industrial policy in the MENA region. How can the features of MENA's industrial policy be explained? And what accounts for the fact that, against world trends, industrial policies in MENA countries didn't followed the evolutionary path of industrial policies of other countries? Unlike in many other regions, industrial policy in MENA developed within the context of the region's strong 'social contract' between the government and its people. Although industrial development was an objective, it at times took a backseat to the more important goals of social transformation and economic redistribution, which influenced not only the types and success of industrial policies adopted, but also critically influenced the balance of power among interest groups. Section two of the paper provides the theoretical framework for understanding the experience with industrial policy. Starting with a brief survey of the arguments used to justify industrial policy interventions, and drawing on various strands of the literature it provides a review of the various mechanisms and arguments which help understand the factors which determine the emergence and type of industrial policies observed and how they change. Using this framework section three reviews the experience of MENA countries during the 1950s to the 1970s and the emergence of state-dominated vertical industrial policy, where traditional/sector selective and sector specific policies have been used extensively. Section four attempts to explain the failure for industrial policy to change during the 1980s and 1990s. While the developing world has moved toward more market oriented policies and production systems that are dominated by the private sector and rely on market signals, MENA has maintained much of the old style industrial policies and high state intervention in the economy that characterized much of the developing world in the past. The final section five makes concluding remarks on the likely directions of industrial policy in the region. As internal and external forces shape the way industrial policies can be used in the globalized economy, the MENA region's old style of industrial policy will need to adjust. The ultimate path of change will be determined greatly by each country's initial conditions and individual political economy factors.

Competition Policy --- Competitiveness and Competition Policy --- Economic theory & Research --- Export Competitiveness --- Governance --- Islamic Finance --- Macroeconomics and Economic Growth --- Political Economy --- Politics and Government --- Private Sector Development

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This paper reviews institutions offering Islamic financial services (IIFS) corporate governance challenges and suggests options to address them. It first points out the importance of corporate governance for IIFS, where it would require a distinct treatment from conventional corporate governance and highlights three cases of distress of IIFS. It then dwells on prevailing corporate governance arrangements addressing IIFS' needs to ensure the consistency of their operations with Islamic finance principles and the protection of the financial interests of a stakeholders' category, namely depositors holding unrestricted investment accounts. It raises the issues of independence, confidentiality, competence, consistency, and disclosure that may bear on pronouncements of consistency with Islamic finance principles. It also discusses the agency problem of depositors holding unrestricted investment accounts. The paper argues for a governance framework that combines internal and external arrangements and relies significantly on transparency and disclosure of market relevant information.

Account Holders --- Accounting --- Agency Problem --- Bank Policy --- Banks and Banking Reform --- Central Bank --- Corporate Governance --- Corporate Law --- Debt Markets --- Depos Depositors --- Emerging Markets --- Exchange --- Federal Deposit Insurance --- Finance and Financial Sector Development --- Financial Literacy --- Holding --- Interests --- Investment --- Islamic Banks --- Islamic Finance --- Islamic Financial Institutions --- Islamic Financial Services --- Labor Policies --- Law and Development --- Market --- Options --- Private Sector Development --- Social Protections and Labor --- Transparency

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The structures and processes established within an institution offering Islamic financial Services (IIFS) for monitoring and evaluating Shariah compliance rely essentially on arrangements internal to the firm. By being incorporated in the institutional structure, a Shariah supervisory board (SSB) has the advantage of being close to the market. Competent, independent, and empowered to approve new Shariah-conforming instruments, an SSB can enable innovation likely to emerge within the institution. The paper reviews the issues and options facing current arrangements for ensuring Shariah compliance by IIFS. It suggests a framework that draws on internal and external arrangements to the firm and emphasizes market discipline. In issuing its fatwas, an SSB could be guided by standardized contracts and practices that could be harmonized by a self-regulatory professionals' association. A framework with the suggested internal and external features could ensure adequate consistency of interpretation and enhance the enforceability of contracts before civil courts. The review of transactions would mainly be entrusted to internal review units, which would collaborate with external auditors responsible for issuing an annual opinion on whether the institution's activities has met its Shariah requirements. This process would be sustained by reputable entities such as rating agencies, stock markets, financial media, and researchers who would channel signals to market players. This framework would enhance public understanding of the requirements of Shariah and lead to more effective options available to stakeholders to achieve improvements in Islamic financial services.

Accounting --- Auditing --- Bank --- Banking --- Banking Supervision --- Banks --- Banks and Banking Reform --- Capital Markets --- Corporate Law --- Debt Markets --- E-Business --- Emerging Markets --- Energy --- External Auditors --- Finance --- Finance and Financial Sector Development --- Financial Institutions --- Financial Literacy --- Financial Markets --- Financial Services --- Governance --- Industry --- Insurance --- Interest --- Islamic Finance --- Law and Development --- Market Discipline --- Markets --- Private Sector Development --- Public Sector Corruption and Anticorruption Measures --- Rating Agencies --- Risk