Giving Compass' Take:

• Somik V. Lall and Ayah Mahgoub identify five strategies for Middle East and North African countries to increase economic integration and convergence.

• How can philanthropy play a roll in helping countries achieve these goals?

• Read more about philanthropy in the Arab region.

Despite policymakers efforts, spatial disparities continue to grow, or are closing more slowly than would be expected given the volume of investment directed to the Middle East and North Africa. The main reason: the causes of spatial exclusion are not locational and physical but are economic and institutional.

Why is territorial convergence so difficult? In a report that we just completed at the World Bank, we identified four reasons.

  1. Most lagging areas have not been able to leverage the full returns to their endowments because the business environment and infrastructure in their cities and towns makes it hard for new firms to start and grow.
  2. Most residents in lagging areas are “stuck in place,” unable to take full advantage of jobs that more vibrant urban economies offer.
  3. In leading areas, rigid and outdated regulations distort land markets and stymie development.
  4. There are formidable obstacles to trade and migration.

Governments in the region can reduce territorial disparities quickly and effectively by doing five things:

  1. Strengthen coordination and complementarities across initiatives. Development strategies are more likely to succeed if they are multidimensional, including access to energy, transport, land, and markets—in the same place, whether sequentially or concurrently.
  2. Redistribute roles and responsibilities across tiers of government. Redistributing responsibilities for local revenue generation and local service provision to local governments can make them better equipped and more accountable.
  3. Enable mobility of people between lagging and leading areas. Education systems across the region need to be reoriented toward marketable skills.
  4. Build dense and connected cities. Making land markets in cities more efficient is critical for agglomeration and specialization—two dynamics that enhance job creation and economic prosperity.
  5. Enhance market access nationally and regionally. A good place to start would be to improve the links across national borders—reducing tariffs, improving logistics, and facilitating trade, and instituting migration protocols.

Read the full article about reshaping the economic geography of the Middle East and North Africa by Somik V. Lall and Ayah Mahgoub at Brookings.