• Economic governance

Economic governance

This paper focuses on economic reforms in Arab countries and provides a conceptual outline for assessing economic reforms in terms of motivation behind them, the nature and extent, and the effects of their implementation.

The paper highlights economic challenges, motivations and external and internal socio-political contexts that influence reform efforts. These elements vary from one country to another in the region. What is considered cosmetic reform in one country, therefore, may be considered very real in others.

The paper identifies three key factors that constrain economic reforms in Arab countries:

• there is no common understanding of what reforms mean and much less agreement on a common plan of action
• states and institutions lack the capacity to design, implement and manage reform programmes. Thus the state often fails to mitigate the negative side effects of some reforms, creating a popular backlash against the entire reform process
• established elites often resist reforms that will harm their economic or political interest.
  

Although reform programmes since the 1990s have been more sensitive to the issues of governance and institution building than they had been during the 1980s, the convergence of economic, political and social, legal and cultural factors is still not adequately addressed. Lack of genuine and sustained commitment to reform has delayed implementation of reforms and in some cases brought them to a halt.

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