3. A roadmap

governance particularly timely now for countries with limited fiscal space. And for those countries where temporarily high oil prices granted a budget respite, this is an opportunity to experiment and learn what policies can be effective to tackle long-run challenges such as diversification.

The definition of what constitutes good governance usually has many aspects. In the case of MENA, the question of good governance has often been subsumed under a discussion about the role of the state and whether the state should be a producer or a regulator of economic activity. This report is not about the role or even the size of the state in MENA. While in some cases achieving more accountability and transparency will imply a rethinking of the role of the state—moving away from centralized decision-making towards a role of steward and fair regulator of the economy— the message of Part II of this report is more nuanced. It is about how the state, policymakers, and bureaucracies can learn about what they are doing well and what they are doing less well—and how they can progressively adjust what they are doing. Similarly, while accountability and transparency, with their resulting pluralism of information, are features of many democracies, this report is not about political systems. Instead, it is about how establishing a data infrastructure, a culture of experimentation, and accountability systems can help the state be more effective in responding to the needs of its citizens in times of high uncertainty.

3. A roadmap

Although there is no silver bullet in development, the messages of all the contributions in Part II point to improving governance—especially transparency and accountability—as the pathway towards unlocking the region’s low-growth and inefficient equilibrium to create the preconditions for employment-rich growth and for a more efficient and fair use of public resources.

Development is a complex, non-linear process. The shocks that increasingly roil the world—of which the COVID-19 pandemic and the war in Ukraine are just examples—overlay long-run forces such as technological growth, demographic change, climate change, and migration. Countries not only need to be able to ride the waves of long-run change productively, but also prepare for and cushion the effects of negative shocks that are becoming more and more frequent.

The resilience needed to recover from negative shocks depends critically on good governance and, especially, on transparency and accountability. Measurement and transparent information can shape an understanding of the challenges shared by different stakeholders, providing the feedback loops needed for learning. By identifying responsibilities and potential consequences of inaction, accountability aligns incentives for action. Transparency and accountability are, respectively, the instrument and the incentives for economic actors to learn from their actions and to course correct as needed to better achieve their objectives. Through this iterative process, bureaucracies learn, capacity improves, and action is progressively based on rigorous evidence.

In MENA, the benefits of better governance would go well beyond managing current risks. In education, a commitment to measure learning systematically, with feedbacks to teachers and principals, could significantly improve learning. For the private sector, levelling the playing field between private and public firms and reshaping the role of the state toward stewardship of the economy (rather than direct intervention) would unlock significant productivity and heighten employment growth potential. In a critical sector such as water, increasing the accountability of frontline providers might help moderate use and progressively fill significant fiscal gaps, such as those caused by the systematic failure of