Publication:
“No Way Out” : The Lack of Efficient Insolvency Regimes in the MENA Region

Loading...
Thumbnail Image
Files in English
English PDF (1.64 MB)
457 downloads
English Text (120.45 KB)
168 downloads
Published
2011-03-01
ISSN
Date
2012-03-19
Editor(s)
Abstract
This paper provides a comparative summary of the payout phase of insolvency systems in the MENA Region. Countries in the region generally have weaker restructuring and liquidation systems than those in most other regions. The paper summarizes many of the weaknesses common across the region.
Link to Data Set
Citation
Uttamchandani, Mahesh. 2011. “No Way Out” : The Lack of Efficient Insolvency Regimes in the MENA Region. Policy Research working paper ; no. WPS 5609. © World Bank. http://hdl.handle.net/10986/3375 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Report Series
Other publications in this report series
  • Publication
    The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review
    (Washington, DC: World Bank, 2025-09-10) Farkas, Hannah; Linsenmeier, Manuel; Talevi, Marta; Avner, Paolo; Jafino, Bramka Arga; Sidibe, Moussa
    This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.
  • Publication
    The Macroeconomic Implications of Climate Change Impacts and Adaptation Options
    (Washington, DC: World Bank, 2025-05-29) Abalo, Kodzovi; Boehlert, Brent; Bui, Thanh; Burns, Andrew; Castillo, Diego; Chewpreecha, Unnada; Haider, Alexander; Hallegatte, Stephane; Jooste, Charl; McIsaac, Florent; Ruberl, Heather; Smet, Kim; Strzepek, Ken
    Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.
  • Publication
    Labor Demand in the Age of Generative AI: Early Evidence from the U.S. Job Posting Data
    (Washington, DC: World Bank, 2025-11-18) Liu, Yan; Wang, He; Yu, Shu
    This paper examines the causal impact of generative artificial intelligence on U.S. labor demand using online job posting data. Exploiting ChatGPT’s release in November 2022 as an exogenous shock, the paper applies difference-in-differences and event study designs to estimate the job displacement effects of generative artificial intelligence. The identification strategy compares labor demand for occupations with high versus low artificial intelligence substitution vulnerability following ChatGPT’s launch, conditioning on similar generative artificial intelligence exposure levels to isolate substitution effects from complementary uses. The analysis uses 285 million job postings collected by Lightcast from the first quarter of 2018 to the second quarter of 2025Q2. The findings show that the number of postings for occupations with above-median artificial intelligence substitution scores fell by an average of 12 percent relative to those with below-median scores. The effect increased from 6 percent in the first year after the launch to 18 percent by the third year. Losses were particularly acute for entry-level positions that require neither advanced degrees (18 percent) nor extensive experience (20 percent), as well as those in administrative support (40 percent) and professional services (30 percent). Although generative artificial intelligence generates new occupations and enhances productivity, which may increase labor demand, early evidence suggests that some occupations may be less likely to be complemented by generative artificial intelligence than others.
  • Publication
    External Finance in Emerging Markets and Developing Economies: A Tale of Differences in Vulnerabilities
    (Washington, DC: World Bank, 2025-12-04) Kim, Dohan; Milesi-Ferretti, Gian Maria
    Over the past two decades, many emerging markets and developing economies have been viewed as increasingly resilient to external financial shocks. This paper assesses whether such resilience is broadly shared across emerging markets and developing economies by classifying them into three tiers based on economic size, income level, institutional strength, and financial integration. The analysis shows that first-tier emerging markets and developing economies have improved their external balance sheets and reduced dependence on official support. However, second- and third-tier emerging markets and developing economies have experienced growing external vulnerabilities since the global financial crisis, marked by rising external debt liabilities and declining foreign exchange reserves. Using a range of indicators, including sovereign defaults, arrears, partial defaults, and International Monetary Fund lending, the paper identifies episodes of external financial distress and shows that distress remains widespread among second- and third-tier emerging markets and developing economies. The empirical analysis confirms that key components of the net international investment position—especially external debt and foreign exchange reserves—predict the onset of external financial distress, with institutional quality shaping the impact. Weak institutions amplify risks, while strong institutions mitigate them. These findings highlight the importance of recognizing heterogeneity across emerging markets and developing economies, strengthening institutional quality alongside external balance-sheet management, and rebuilding buffers to safeguard against renewed global financial stress.
  • Publication
    Rigging the Scores: Corruption through Scoring Rule Manipulation in Public Procurement Auctions
    (Washington, DC: World Bank, 2025-12-02) Chen, Qianmiao
    Public procurement is highly susceptible to corruption, especially in developing countries. Although open auctions are widely adopted to curb it, this paper finds that corruption remains prevalent even within this procurement format. Procurement officers can collaborate with firms to manipulate scoring rules, ensuring predetermined winners, while corrupt firms submit noncompetitive bids to meet minimum bidder requirements. Using extensive data from Chinese public procurement auctions, the paper introduces model-driven statistical tools to detect such corruption, identifying a corruption rate of 65 percent. A procurement expert audit survey confirms the tools’ reliability, with a 91 percent probability that experts recognize suspicious scoring rules when flagged. Firm-level analysis reveals that local, state-owned, and less productive firms are favored in corrupt auctions. Lastly, the paper explores policy implications. Analysis of the national anti-corruption campaign since 2012 suggests that general investigations may be insufficient to address deeply ingrained corrupt practices. Using counterfactuals based on an estimated structural model, the paper shows that implementing anonymous call-for-tender evaluations could improve social welfare by 10 percent by eliminating suspicious rules and encouraging broader participation.
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Republic of Serbia Financial Sector Assessment Program Update
    (Washington, DC, 2009-10) International Monetary Fund; World Bank
    Nonperforming Loans (NPLs) in the banking system constituted 16.5 percent of total loans, owing primarily to the corporate sector. The Credit Bureau, maintained by the Association of Serbian Banks, also discloses dramatic increases in corporate and retail defaults over the past year. NPL resolution and loan loss mitigation is hampered by a still evolving but uneven collateral and enforcement framework that complicates restructuring and leads to delays and lower recoveries in execution procedures. Corporate debt resolution is further complicated by a pattern of corporate misconduct designed to circumvent a creditor's legitimate enforcement rights. This is particularly acute in response to account blockages. In an effort to survive, business owners frequently engage in a pattern of corporate fraud to avoid their legitimate obligations by creating alter ego or shell companies through which to conduct their ongoing business activities, with all funds passing through the new legal entity. That entity is free from debt and can open bank accounts, engage in contracts, and carry on business as usual using the corporate assets of the prior legal entity under cleverly disguised lease or contractual use obligations. In most modern economies, such practices constitute fraud or fraudulent transfers that can carry stiff penalties, including loss of business privileges. Other reported abuses include applying for voluntary dissolution during which the owner or a friendly receiver continues to operate the business for years in an apparent wind-down of the business, while ignoring creditor claims.
  • Publication
    Lithuania : Banking System Assessment
    (Washington, DC, 2009-12) World Bank
    The Bank of Lithuania (BoL), the Central Bank, was established in 1990. BoL has the exclusive right to grant and revoke licenses to local and foreign banks and to supervise their activities. Private commercial banking boomed from 1991 to 1994 while bank regulation was lax. In late 1995, a bank crisis caused failures of most of the Lithuanian banks, and the remaining banks resulted in better managed and supervised institutions. BoL also applied tougher regulation on the banking sector. All commercial banks now need to have their financial records audited every year by an international auditing firm. This report includes the following headings: risks and contingency crisis management in the Lithuanian banking system; credit risk and regulatory issues; and description of corporate debt restructuring procedures in Lithuania.
  • Publication
    A Global View of Business Insolvency Systems
    (Washington, DC: World Bank and Brill, 2010) Westbrook, Lawrence; Booth, Charles D.; Paulus, Christoph G.; Rajak, Harry; Westbrook, Lawrence
    The purpose of this book is to provide a coherent overview of the insolvency systems found around the world. Its intended audience includes academics, judges, lawyers, and policymakers. Its focus is on businesses rather than natural persons. The authors hope to give the reader a sense of some of the principal approaches to managing the general default of a business debtor. The authors will discuss the nature of the costs and benefits arising from the various policy choices legislators have made. In the process, they will emphasize the close interrelationship among various elements of an insolvency regime so that these elements can be viewed as part of an overall system and not just as a series of policy decisions about particular rules, such as the method of initiation of an insolvency case or the balance struck in setting the boundaries of an avoidance power. The organization of the book reflects our view of insolvency laws as complete systems, including not only the 'insolvency' or 'bankruptcy' code of a jurisdiction but also closely related laws and the institutional framework in which those laws are applied. The book takes a systematic approach to a variety of topics related to credit and insolvency regulation. The functional analysis starts with the study of debt enforcement, continues with an examination of general corporate insolvency legislation, corporate rehabilitation proceedings, informal workouts, employee rights, judicial and administrative institutions, and the considerations key to cross-border insolvency proceedings.
  • Publication
    Out-of-Court Debt Restructuring
    (World Bank, 2012-01-12) Garrido, Jose M.
    This study provides a conceptual framework for the analysis of the questions of out-of-court debt restructuring from a policy-oriented perspective. The starting point of the analysis is given by the World Bank principles for effective insolvency and creditor rights systems. The study offers an overview of out-of-court restructuring, which is not seen as fundamentally opposed to formal insolvency procedures. Actually, the study contemplates different restructuring techniques as forming a continuum to the treatment of financial difficulties. The study discusses the advantages and disadvantages of all the debt restructuring techniques, and concludes, in this regard, that a legal system may contain a number of options a menu that can cover different sets of circumstances. In the end, the law may offer a toolbox with very different instruments that the parties may use depending on the specific facts of the case. The study also provides a checklist that can be used to examine the features of a legal system that bear a direct influence on debt restructuring activities.
  • Publication
    Serbia : Financial Sector Assessment
    (World Bank, Washington, DC, 2010-06-08) World Bank; International Monetary Fund
    The Financial Sector Assessment Program (FSAP) update team found that the authorities have progressed in implementing the key recommendations from the initial assessment. The 2005 FSAP team revealed a number of vulnerabilities, including (i) high credit growth, largely financed by foreign banks, which resulted in rising nonperforming loans (NPLs), and (ii) poor management and low capital of several systematically important state-controlled banks. The Basel Core Principle on Banking Supervision (BCP) assessment identified a number of deficiencies in banking supervision. The update team found that the authorities took action to address the issues highlighted by the 2005 FSAP. In particular, they adopted prudential measures to slow credit growth, including higher risk weights for foreign currency loans to un-hedged borrowers, and exposure limits to households. Two systemic state-controlled banks were privatized. Finally, a new banking law was enacted that significantly strengthened supervision on consolidated basis and improved corporate governance and transparency.

Users also downloaded

Showing related downloaded files

  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    World Bank Annual Report 2024
    (Washington, DC: World Bank, 2024-10-25) World Bank
    This annual report, which covers the period from July 1, 2023, to June 30, 2024, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.
  • Publication
    Digital Africa
    (Washington, DC: World Bank, 2023-03-13) Begazo, Tania; Dutz, Mark Andrew; Blimpo, Moussa
    All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.
  • Publication
    Digital-in-Health
    (Washington, DC: World Bank, 2023-08-18) World Bank
    Technology and data are integral to daily life. As health systems face increasing demands to deliver new, more, better, and seamless services affordable to all people, data and technology are essential. With the potential and perils of innovations like artificial intelligence the future of health care is expected to be technology-embedded and data-linked. This shift involves expanding the focus from digitization of health data to integrating digital and health as one: Digital-in-Health. The World Bank’s report, Digital-in-Health: Unlocking the Value for Everyone, calls for a new digital-in-health approach where digital technology and data are infused into every aspect of health systems management and health service delivery for better health outcomes. The report proposes ten recommendations across three priority areas for governments to invest in: prioritize, connect and scale.