Table Of ContentChallenges of Economic Development
in the Middle East and North Africa Region
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World Scientific Studies in International Economics
(ISSN: 1793-3641)
Series Editor Robert M. Stern, University of Michigan, USA
Editorial Board Vinod K. Aggarwal, University of California-Berkeley, USA
Alan Deardorff, University of Michigan, USA
Paul DeGrauwe, Katholieke Universiteit Leuven, Belgium
Barry Eichengreen, University of California-Berkeley, USA
Mitsuhiro Fukao, Keio University, Tokyo, Japan
Robert L. Howse, University of Michigan, USA
Keith E. Maskus, University of Colorado, USA
Arvind Panagariya, Columbia University, USA
Published*
Vol. 4 The Rules of Globalization (Case Book)
edited by Rawi Abdelal (Harvard University, USA)
Vol. 5 Institutions and Gender Empowerment in the Global Economy
edited by Kartik Roy (University of Queensland, Australia),
Hans Blomqvist (Swedish School of Economics and Business
Administration, Finland) & Cal Clark (Auburn University, USA)
Vol. 6 Globalization and Systemic Risk
edited by Douglas D. Evanoff (Federal Reserve Bank of Chicago, USA),
David S. Hoelscher (International Monetary Fund, USA) &
George G. Kaufman (Loyola University Chicago, USA)
Vol. 7 Fostering Monetary and Financial Cooperation in East Asia
edited by Duck-Koo Chung (North East Asia Research Foundation, South Korea)
& Barry Eichengreen (University of California, Berkeley, USA)
Vol. 8 Challenges of Economic Development in the Middle East and North Africa Region
by Julia C Devlin
Vol. 9 Globalization and International Trade Policies
by Robert M Stern
Vol. 10 The First Credit Market Turmoil of the 21st Century: Implications for
Public Policy
edited by Douglas D Evanoff (Federal Reserve Bank of Chicago, USA),
Philipp Hartmann (European Central Bank, Germany) &
George G Kaufman (Loyola University, USA)
Vol. 11 Free Trade Agreements in the Asia Pacific
edited by Christopher Findlay (University of Adelaide, Australia) &
Shujiro Urata (Waseda University, Japan)
*The complete list of the published volumes in the series, can also be found at
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8
World Scientific
Studies in
International
Economics
Challenges of
Economic Development
in the Middle East
and North Africa Region
JULIA C. DEVLIN
University of Virginia, USA
World Scientific
NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI
6762 tp.indd 2 11/30/09 4:05:37 PM
Published by
World Scientific Publishing Co. Pte. Ltd.
5 Toh Tuck Link, Singapore 596224
USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601
UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
CHALLENGES OF ECONOMIC DEVELOPMENT IN THE MIDDLE EAST
AND NORTH AFRICA REGION
World Scientific Studies in International Economics — Vol. 8
Copyright © 2010 by World Scientific Publishing Co. Pte. Ltd.
All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means,
electronic or mechanical, including photocopying, recording or any information storage and retrieval
system now known or to be invented, without written permission from the Publisher.
For photocopying of material in this volume, please pay a copying fee through the Copyright
Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to
photocopy is not required from the publisher.
ISBN-13 978-981-279-344-7
ISBN-10 981-279-344-5
Typeset by Stallion Press
Email: [email protected]
Printed in Singapore.
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To my parents Nora and Joseph and my sister Laura whose
encouragement, love and support made this book and so much else
possible. I would like to thank my Uncle Theodore for his kindness
and wisdom which has guided and inspired me. To my colleagues
and friends, thank you for your patience and generous insights.
Finally, I would like to thank and acknowledge all my students,
past, present and future, whose perpetual enthusiasm and
bright interest continue to inspire me.
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Contents
Introduction 1
Chapter One Is MENA Exceptional? 13
Chapter Two State Formation, Consolidation, and 39
Development, 1960s–1980s
Chapter Three Toward Greater Use of Markets and 83
the Global Economy?
Chapter Four Oil, OPEC, and the Challenges 115
of Surplus Management
Chapter Five Water Scarcity and Agricultural Policy 157
in the MENA Region
Chapter Six Building a New Future: Development 195
in the Post-Conflict Context and
Post-Disaster Recovery
Chapter Seven Is the MENA Region “Open” 235
for Business?
Chapter Eight Making Global Integration Work for 281
MENA Countries
vii
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viii Julia C Devlin
Chapter Nine Are Market Disciplines Sufficient? 325
Industrial Policy and Technology
Transfer
Chapter Ten The Keys to the Future: Human Capital 361
Development in the MENA Region
Chapter Eleven Are MENA’s Labor Markets the Key 401
to Growth?
Chapter Twelve Closing the Poverty Gap in MENA 439
Chapter Thirteen Development Assistance and Its 473
Effectiveness in MENA Countries
Chapter Fourteen Pathways to Future Prosperity 507
Index 513
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Introduction
The story of development in the Middle East and North Africa
(MENA) region is a tale of the interplay between two forces:
external factors and a rivalry of interests. Over time, large public
sectors, rather than markets have evolved as the primary mecha-
nism to manage these forces — by enhancing certainty, real or per-
ceived and mediating interests — with both intended and
unintended consequences for growth and development. The aim of
this book is to assess development policy choices in the post WWII
era from the vantage point of these two forces, their interaction and
the institutional framework which is given at any point in time. As
such, the book surveys primary challenges facing policy-makers in
the region today; namely low total factor productivity growth,
management of volatile oil and natural gas revenues and rising
water scarcity, post-conflict development, raising private invest-
ment and diversifying exports, lowering high unemployment,
improving education quality and addressing poverty incidence.
To the general public, the Middle East and North Africa region
(MENA)1is perhaps best known for its vast oil wealth, geopolitical
1 The countries classified as Middle East and North Africa include Algeria,
Bahrain, Egypt, Iraq, Iran, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman,
Qatar, Saudi Arabia, Syria, Tunisia, the West Bank and Gaza, United Arab
Emirates, and Yemen. World Bank data for MENA regional averages is a subset
of this group and includes Djibouti although Djibouti is not included in the
general discussions throughout the text. Given its small size, inclusion of Djibouti
is not considered to bias the regional estimates for MENA countries in a
significant way.
1
