Person:
Bogetić, Željko

Last updated:June 20, 2025

Biography

Željko Bogetić is lead economist for macroeconomics, trade, and investment at the Middle East and North Africa (MENA) Region at the World Bank. He currently leads analytical and advisory work and economic teams on macroeconomic and structural reform issues focused on Egypt, Yemen, and Djibouti. He also leads a program of analytical and advisory activities on macroeconomic policy and climate change in the MENA region. Previously, he served as the Bank’s lead economist and thematic coordinator for economic policy in the World Bank’s Independent Evaluation Group, as well as the Bank’s lead economist and economic policy coordinator for Western Balkans, Russian Federation, South Africa and SACU countries, and several West African countries. Željko has served at the Bank and the IMF for three decades in a variety of economist and leadership roles in all world regions. He has been publishing books and articles, frequently presenting papers on a range of topics such as the macroeconomic stabilization, macro-fiscal policy and climate change, tax policy, public finance reforms, geospatial analysis of development projects, currency reform, dollarization, and infrastructure productivity and growth. He holds Ph.D. and M.A. degrees in economics from the University of Connecticut.

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Gulf Economic Update, June 2025: Smart Spending, Stronger Outcomes - Fiscal Policy for a Thriving GCC
(Washington, DC: World Bank, 2025-06-20) Chattha, Muhammad Khudadad; Maseeh, Ashwaq Natiq; Luan, Zhao; Thelejane, Morakane; Ftomova, Olena; Youssef, Hoda; Kawalec, Tobias; Wang, Xinyue; Yacine, Ouahioune; Bogetić, Željko
This special focus chapter analyzes the effectiveness of fiscal policy in fostering economic growth in the Gulf Cooperation Council (GCC) region. In doing so, the principal focus of the chapter is on fiscal multipliers, which measure the effect of changes in government spending or revenue on the country’s output (GDP). In simple terms, they quantify how much economic activity is generated by each dollar of fiscal policy action. The need to evaluate the effectiveness of fiscal policy is especially relevant for GCC countries given their intensified economic diversification efforts in recent years. Globally, fiscal policy has been playing a growing role, with public expenditure as a share of GDP growing in more than 70 percent of all countries since the Global Financial Crisis. In the GCC, the share of fiscal expenditure in non-hydrocarbon GDP ranges between 36 percent and 84 percent. As public spending is often undertaken through large-scale public investments, this calls for a better understanding of the returns on GDP from those investments, the effectiveness of capital allocation, and whether fiscal policies are well designed to maximize employment and job creation, among other objectives. On the revenue side, most of the income is related to sales of hydrocarbon products, as hydrocarbon sales revenue makes up between 40 and 90 percent of overall government revenues in 2023. The main policy takeaway is that fiscal policy is broadly effective at stabilizing cyclical fluctuations of (non-hydrocarbon) output, especially during times of economic dearth. While fiscal multipliers in the GCC appear to be positive across the board, they are generally weak and less than one, in line with the estimates in the literature for a multitude of other countries. Policymakers should therefore not expect multiplying effects in response to stabilizing fiscal policy measures, which occur for fiscal multipliers that are larger than one. This does not, however, imply a total absence of fiscal policy impact on output. As the estimated multipliers are significantly larger during recessions, the findings make a robust case for adopting countercyclical fiscal policy. Such countercyclical policy should aim at an expansion of demand through fiscal stimulus only during demand-driven downturns.
Gulf Economic Update, December 2024: Navigating the Water Challenge in the GCC - Paths to Sustainable Solutions
(Washington, DC: World Bank, 2024-12-09) Chattha, Muhammad Khudadad; Youssef, Hoda; Ftomova, Olena; Maseeh, Ashwaq Natiq; Wang, Xinyue; Bogetić, Željko; Naeher, Dominik; Borja-Vega, Christian; Ghosheh, Adnan
The Gulf Economic Update (GEU) is the product of the Economic Policy unit for Middle East and North Africa at the World Bank Group. It provides an update on key economic developments and policies in the Gulf Cooperation Council (GCC) countries over the past six months, places them in a longer-term and global context and assesses the implications of these developments and other changes in policy on the outlook for the GCC. Its coverage ranges from the macroeconomy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in the GCC.
Corruption and Government Revenue: Evidence of a Non-Linear Relationship Driven by Crises
(Taylor and Francis, 2025-01-14) Bogetić, Željko; Naeher, Dominik
A large body of literature studies the relationship between corruption and economic outcomes, including government revenue mobilization, but there is little evidence on how this relationship changes during times of crisis. Using a comprehensive panel dataset covering up to 194 countries in the period 1996 to 2020, we find evidence of a negative link between corruption and revenue that is amplified in times of crisis. The amplification appears to be driven by countries with lower average income levels, non-democratic governments, and higher natural resource dependency. Our findings are helpful in assessing different views of corruption offered in the literature. Overall, we find our results to be more consistent with a rent seeking view of corruption whereby, in times of crisis, corruption becomes more pervasive and government revenue declines. In contrast, we find no empirical support for the view that crises represent times of social improvement associated with increases in revenues.
Decarbonization in MENA Countries: An Empirical Analysis of Policy Impacts
(Washington, DC: World Bank, 2025-02-14) Mohtadi, Hamid; Bogetić, Željko
This paper empirically examines the multiple impacts of alternative, major fiscal instruments on decarbonization in countries in the Middle East and North Africa. It also examines the effects of decarbonization pathways on decarbonization, using a database covering 41 countries, including countries in the Middle East and North Africa region. The analysis uses several methods to compare and contrast the findings and test their robustness. These new estimates contribute to the literature seeking to understand the pros and cons and effectiveness of various policy instruments in promoting decarbonization, with particular focus on the Middle East and North Africa region. The principal findings include the following. Oil subsidies among the region’s oil producers strongly and positively impact higher carbon dioxide emissions. This effect seems to work through the energy consumption path. Even after controlling the consumption effect, there remains a direct net effect of subsidies on carbon dioxide, likely arising from other sources such as manufacturing. Comparing three groups—all 41 countries, only countries in the Middle East and North Africa, and only oil producers in the Middle East and North Africa—the adverse effect of oil subsidies on carbon dioxide emissions matters only for oil producers in the Middle East and North Africa, not the other two groups. Flaring contributes to carbon dioxide emissions for oil producers in the Middle East and North Africa. Oil subsidies do not have a significant effect on short-run or long-run economic growth. Thus, reducing subsidies does not adversely impact economic growth. This is true for all countries, including oil exporters, in the Middle East and North Africa.
Is Escaping the Fiscal Pro-Cyclicality Trap Possible? Evidence from the Middle East and North Africa
(Washington, DC: World Bank, 2024-10-28) Bogetić, Željko; Naeher, Dominik
This paper analyzes fiscal policy cyclicality, with a specific focus on the Middle East and North Africa region, which is known for its significant output volatility. The paper provides new and more granular evidence on the direction, intensity, and specific fiscal sources of cyclicality. Based on annual data covering 184 countries from 2000 to 2022, the findings suggest that there are important differences in the assessment of countercyclical fiscal policy achievements among different fiscal policy variables, across world regions, and also within the Middle East and North Africa region. While the global associations between fiscal cyclicality and income levels have remained relatively stable, countries in the Middle East and North Africa have exhibited diverse performances, some transitioning toward countercyclicality and others moving away from it. The paper also identifies several countries in the Middle East and North Africa that have successfully shifted from procyclical to countercyclical fiscal policy, breaking free from the “fiscal pro-cyclicality trap.” To understand more specific fiscal sources of cyclicality, the paper examines subcomponents of revenues and expenditure. It shows that nontax revenues exhibit a greater degree of procyclicality than tax revenues, and subsidy expenditures tend to be less countercyclical than other fiscal expenditures. This has policy implications and adds a dimension of assessment to subsidies that is not addressed in the literature: subsidies, being less countercyclical than other expenditures in the Middle East and North Africa, do not contribute to macroeconomic stability and long-term growth through this channel, independent of their adverse efficiency, distributional, and fiscal space effects. The paper concludes with a discussion of the implications of these findings, aimed at improving countercyclicality in fiscal policy.
The good, the bad, and the ugly: New evidence on alternative views of corruption
(Taylor and Francis, 2023-05-05) Bogetić, Željko; Naeher, Dominik
Different views of corruption are discussed in the literature, ranging from theories highlighting a positive role of corruption (to ‘grease the wheels’ of an economy) to negative (acting as ‘sand in the wheels’) or even destructive effects of corruption on economic outcomes. The empirical evidence in this context is mixed, with alternative theories being supported by different studies, typically relying on different data sources, time periods, and measures of corruption. In this paper, we assess several alternative views of corruption simultaneously in a single empirical framework. Specifically, we test six prominent hypotheses regarding the role of corruption for government revenues using a comprehensive country-level panel dataset covering 194 countries in the period 1996–2019. Our results help to shed light on the factors that are empirically important in explaining the link between corruption and government revenues, including the role of governance, autocracy, fragile states, and natural resources.
Drivers of Firm-Level Productivity in Russia's Manufacturing Sector
(World Bank, Washington, DC, 2013-08) Bogetić, Željko; Olusi, Olasupo
This note presents the results of an empirical analysis of firm-level productivity growth in Russia's manufacturing sector during the period 2003-08 using a rich Amadeus database as well as the recent EBRD/World Bank Business Enterprise and Performance surveys (BEEPs). The results show that productivity grew steadily between 2003 and 2008, with an annual growth rate averaging 4 percent over the period, showing no signs of a slowdown from the previous period after the 1998 crisis. Firm characteristics such as size, location, age, and the structure of firm ownership are important determinants of productivity, as evidenced by positive effects of scale economies (large firm effect), agglomeration (Moscow-city effect), private ownership, and a firm's industry dominance. Supplemental analysis of the quality of infrastructure -- water, electricity, transport, and the internet -- using BEEPS data show that infrastructure quality gaps reduce firm productivity with water supply gaps having the largest impact.
Trust and Identity in a Small, Post-Socialist, Post-Crisis Society
(World Bank, Washington, DC, 2014-04) Bjørnskov, Christian; Bogetić, Željko; Hillman, Arye L.; Popović, Milenko
The principal focus in the substantial literature on impediments to economic development has been on the inadequacies of policies and governance. However, successful economic development requires effectiveness of markets and incentives for investment, which in turn require trust. This paper reports on trust in a development context. The paper uses trust experiments, a post-experiment survey, and econometric analysis relating trust to identity and other personal attributes in the setting of Montenegro, a small, recently-independent, post-socialist, post-crisis society. External validity was sought by providing sufficient material reward to balance identity-related expressive motives and by having two groups of subjects, one usual university students and another group that, while also students, was somewhat older and had had greater market or commercial experience. The paper reviews cultural priors that can be expected to affect trust and distinguishes between generalized trust that can be socially beneficial and particularized trust that can be disadvantageous for development. The empirical results suggest that trust among private individuals is not an impediment to development in Montenegro. As a result, policy reform can improve economic and social outcomes. However, the results redirect the focus to issues of governance and political entrenchment as potential explanations for impediments to development.
International Benchmarking of South Africa's Infrastructure Performance
(World Bank, Washington, DC, 2006-02) Bogetić, Željko; Fedderke, Johannes W.
The paper provides a first systematic, comprehensive benchmarking of South Africa's infrastructure performance in four major sectors--electricity, water and sanitation, information and communication technology, and transportation--against the relevant group of comparator countries using a new World Bank international data base with objective and perception-based indicators of infrastructure performance from over 200 countries. Specifically, the paper seeks to answer a number of relevant questions: How does South Africa compare on major indicators of infrastructure sector performance against the relevant country groups? What do outcome indicators tell us about the relative strengths and weaknesses of South Africa's infrastructure compared with various income and geographical comparator groups of countries? Where are the largest deviations-positive and negative-from the benchmarks and other comparators? And how does one interpret some of these comparisons to be useful for policy purposes?
Achieving Accelerated and Shared Growth in Ghana : A MAMS-Based Analysis of Costs and Opportunities
(World Bank, Washington, DC, 2008-02) Bogetić, Željko; Medvedev, Denis; Bussolo, Maurizio
This paper relies on the recently developed Maquette for Millennium Development Goals Simulations (MAMS) model to assess the consistency of alternative scaling-up and policy packages for growth and achievement of the Millennium Development Goals in Ghana. In the baseline scenario, Ghana's strong near and medium-term growth outlook puts it in a good position to achieve the poverty Millennium Development Goal ahead of schedule, but other goals are likely to remain elusive before 2015. In the accelerated growth scenario-which addresses the major gaps in water and sanitation and other infrastructure-even more rapid growth and poverty reduction are possible, but important targets in the areas of education, health, and environment remain unattainable. Although growth is complementary to achievement of the Millennium Development Goals, the authors also find important growth-human development trade-offs in the near term. The estimates show that the resource requirements for achieving the key Millennium Development Goals by 2015 are large, reaching US$82 per capita in an illustrative foreign-grant financed scenario. Increased intake and retention of students contribute to rising scarcity of unskilled labor, buttressing unskilled wages, while high demand for skills from the sectors related to the Millennium Development Goals raises the returns to human capital. These developments lead to improvements in the welfare of the poorest members of Ghanaian society and contribute to a small reduction in overall inequality.