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Authoritarianism, Credibility of Reforms, and Private Sector Development in the Middle East and North Africa

  • Mustapha K. Nabli


    (World Bank)

  • Carlos Silva-Jauregui
  • Ahmet Faruk Aysan

Despite recent gains, the development challenges of the Middle East and North Africa (MENA) region remain formidable. Job creation remains the most important one given the magnitude of its demographic transition and the seventy million people that are expected to seek employment opportunities in the next twenty years. Four reports published by the MENA region of the World Bank in 2003-04 spelled out the state of reforms and the fundamental transitions needed in the MENA economies to move to higher and more sustainable sources of growth and job creation. The reports identified three critical realignments or transitions: (i) from public sector-dominated to private sector-led economies; (ii) from closed to more open economies; and (iii) from oil-dominated and volatile economies to more stable and diversified economies. The reform agenda for MENA remains large. In this paper, we assess and attempt to explain the progress or lack thereof achieved in economic reforms in the MENA region. In order to be more specific and limit the scope of the paper we focus on the dimensions of economic reforms which are related to the first transition mentioned above: the development of a dynamic private sector. The importance of the employment challenges makes the development of a competitive private sector to become the lead engine for more productive growth and employment creation a central concern. In a sense, private sector development can be seen as symptomatic of the process of reforms taking place in MENA. Hence, from this angle, we analyze reforms in the region and their prospects.

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Paper provided by Economic Research Forum in its series Working Papers with number 443.

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Length: 35 pages
Date of creation: Oct 2008
Date of revision: Oct 2008
Publication status: Published by The Economic Research Forum (ERF)
Handle: RePEc:erg:wpaper:443
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