Figure 5. Worldwide Governance Indicators, 1996–2020

Good governance matters for good development outcomes. Key elements include the characteristics of political institutions (that is, the process of decision making and the checks on political power), state capacity, and how the state intervenes in economic activity—in other words, how it regulates economic institutions (North et al. 2008).

Because there are so many overlapping factors that affect growth and there is a two-way relationship between governance and development, it has been difficult to estimate the causal effect of governance on development across countries. Competing determinants of development explored in the literature include trade, culture, geography, and access to knowledge about what the “right policies” are. In their seminal 2001 paper, Acemoglu, Johnson and Robinson posit that institutions—the panoply of formal and informal organizations, laws, norms, and traditions that shape society—are the crux of economic development. The three authors rely on a novel estimation strategy and find that institutions have a large positive impact on economic performance and incomes per capita. In other words, institutions are more important than geography and trade in explaining differences in economic development.

Measuring governance is as complex as defining it. One of the most widely used measures of governance is the Worldwide Governance Indicators (WGI).10 WGI covers six dimensions of governance: ability; political stability and absence of violence/terrorism; government effectiveness; regulatory quality; rule of law; control of corruption. These indicators represent the combined views of a large number of enterprises, citizens and experts who respond to surveys conducted in industrial and developing countries. According to WGI, the MENA region performs poorly in a number of dimensions, particularly, in “voice and accountability” (see Figure 5).

Zeroing In on Transparency and Accountability

Figure 5. Worldwide Governance Indicators, 1996–2020

Sub-Saharan Africa East Asia and Pacific 2.0 1.5 1.0 0.5 0 -0.5 -1.0 -1.5

Europe and Central Asia

South Asia Latin America and the Caribbean

North America Middle East and North Africa ▬ Voice and Accountability ▬ Political Stability and Absence of Violence ▬ Government Effectiveness ▬ Regulatory Quality ▬ Rule of Law ▬ Control of Corruption Source: Worldwide Governance Indicators (WGI). Note: The figure plots the six WGI for the different geographical regions. The aggregate indicators are: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption.

In many, if not all, definitions of governance, transparency and accountability are core parts of the fabric of good governance. This is not only the case for international literature, but also for how “good governance” is defined and interpreted by local actors. For example, the Egyptian Administrative Control Authority defines governance as “the good management of all institutions in the state through policies, mechanisms and practices based on transparency, participation, accountability, rule of law, combating corruption, striving to achieve justice and non-discrimination between citizens, responding to their needs, and seeking efficiency to reach policies and services to the highest level of effectiveness and quality to the satisfaction of citizens.”11

Access to credible data empowers bureaucracies and citizens by giving them the information needed to hold public actors accountable. Information provides the basis for creating a system that defines responsibilities and consequences for public actors and gauges their performance. In a world where uncertainty dominates, not only do transparency and accountability reinforce each other, they are essential to a process of iterative institutional learning. Unfortunately, the MENA region falls short in both dimensions.

10 Kaufman et al. (2010). 11 Egyptian Administrative Control Authority. See also The Egyptian Center for Economic Studies; Government of Dubai; UAE Government Blog.