Pathways to Future Prosperity

In the post-WWII period through the 1980s and 1990s, MENA economies experienced periods of growth acceleration and generally long term declining productivity. Much of this had to do with development policy choices – and the extent to which external factors, intertwined with public and private interests and institutional rigidities, helped to shape policy outcomes. In many developing regions, the post-WWII era was generally characterized by relatively high levels of interventionism and protectionism and the growth of social spending and government. The MENA region was no exception. Where it remains an exception today, relative to East Asian economies, for example, is in continued high levels of government intervention through implicit or explicit employment guarantees, subsidies and public credit allocation as well as maintaining a considerable government stake in production and distribution. This has been linked with a certain interrelationship between limited scalability in the framework of productive political and social relations, rising fiscal commitments and weak productivity growth…