Structural Reforms in the Middle East and North Africa

P ar t 1 S tr uc tu ra l R ef or m s in th e M id dl e Ea st a nd N or th A fr ic a After more than twenty years of rapid economic growth, falling oil prices in the mid-1980s and an abrupt decline in investment and growth pushed Arab governments to rethink their basic frameworks for economic management (Page 1998; World Bank 1995).2 The post-independence Arab socialist period left virtually all of the economies in the Middle East and North Africa (MENA) with an inwardlooking, statist model of development that lost dynamism in the 1980s.3 Beginning in about 1985, Arab governments—supported by the international fi nancial institutions—shifted at varying rates toward policies designed to achieve the “Washington Consensus”4 of macroeconomic stability, a higher degree of integration with the world economy, and an expanded role for the private sector.