Advantages And Disadvantages Of The Political Economy Of MEN

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Register to read the introduction… Political economy of MENA
State ownership and privatization has been a debated subject in the MENA as it stems from the political and economic situation and the formation of state ownership of its regimes. In order to assess the advantages and disadvantages of privatization, it is important to identify reasons that affect the decisions behind privatization. According to the World Bank, successful reform needs to be politically desirable, politically feasible, and be credible with no policy reversals (World Bank, 1995). Moreover, if privatization is not in the government’s interest, it is likely that privatization will not be conducted.
Although the MENA region encounters many obstacles to sustainable and private sector development, the region has the capability to achieve economic growth. The abundant supply of human, financial and natural resources is available, although there is inefficient allocation of resources. Proper governance and strong institutions are needed in order to effectively execute policies that are aligned with public benefit. Due to the lack of genuine political commitment and efficient institutions needed for such reform, inefficiency of SOEs is common. According to Akoum, this is known as “state capture,” where the status quo is maintained and protected by those in power. Bortolloti supports these claims, and confirms that government’s decision to privatize is politically motivated (Akoum, 2012:
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