Geographical differences in living standards are a pressing concern
for policymakers in the Middle East and North Africa (MENA). Economies
of agglomeration mean that production is most efficient when
concentrated in leading areas. So how can the region reduce spatial
disparities in well-being without compromising growth?
The solution to spatial disparities lies in matching the policy
package to a lagging area’s specific characteristics. Key
questions include: is the lagging area problem really as serious as one
thinks; is it a problem of low economic opportunity or of poor human
development; are lagging area populations close enough to
agglomerations to benefit from spillovers; and is there manifest
private investor interest? Drawing on the World Bank’s 2009 World
Development Report, Reshaping Economic Geography, the book proposes 3
policy packages.
First, all lagging areas can benefit from a “level
playing-field for development” and investment in people.
Geographic disparities in the policy environment are a legacy of
MENA’s history, and gaps in human development are a major
component of spatial disparities. Smart policies for the investment
environment, health, education, social transfers and urban development
can therefore close spatial gaps in living standards.
Second, lagging areas that are close to economic agglomeration can
benefit from spillovers - provided that they are connected.
MENA’s expenditure priority is not necessarily long-distance
primary connections, but infrastructure maintenance and short-distance
connections such as rural roads and peri-urban networks. Public-private
partnerships can also bring electronic connectivity to lagging
areas.
Third, shifting regional development policy away from spatial
subsidies towards the facilitation of cluster-based growth will
increase the chance of cost-effective impacts.
The final chapter of the book examines the institutional
prerequisites for effective spatial policy. It argues that MENA’s
centralized/sectoral structures are not always adapted to
governments’ spatial development agendas, and describes
alternative institutional options.
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