Rethinking Human Development in the Middle East and North Africa: The Missing Dimensions

Abstract

In this paper I review the state of human development in the Middle East and North Africa (MENA) and its evolution in the past four decades. I highlight the following salient characteristics of MENA economies that shape human development in the region: high income from hydrocarbon exports, which drive a wedge between individual productivity and consumption; demographic factors, such as delayed fertility transition and rapid growth of the youth population; imbalances in the labor markets, evidenced by high rates of youth unemployment and low participation of women in the labor market; high investment in schooling but with low productivity of education; and imbalance in marriage markets resulting in delayed marriage. I argue that these regional characteristics affect welfare and human development in MENA countries deeply but in ways that are not easily captured by standard human development measurement.

Keywords:

• Human development
• Economic development
• Education
• Gender
• Inequality
• Youth

Acknowledgements

A previous version of this paper appeared as a background paper for the 2010 Human Development Report. I am grateful to Josh Deutschmann for research assistance and to two anonymous referees for helpful suggestions.

Notes

The five countries are: Oman (number 1), Saudi Arabia (number 5), Tunisia (number 7), Algeria (number 9) and Morocco (number 10).

Dani Rodrik's weblog ‘The unsung development miracles of our time’, [http://rodrik.typepad.com/dani_rodriks_weblog/2010/11/the-unsung-development-miracles-of-our-time.html], accessed 20 November 2010.

I include all countries normally considered in the Middle East and North Africa region, plus Turkey.

Middle income for non-MENA countries is defined between $3000 and $15 000 GDP per-capita values (PPP values for 2005), in which most MENA countries fall. All averages are population weighted. Source of data: World Bank WDI 2012.

Regressing on the HDI index of GDP per capita, which is limited from above to 100, produces the same results as regressing on log GDP per capita, so there is no difficulty in interpretation.

See papers in Dhillon and Yousef (2009).

For the effect of cohort size on welfare, see Easterlin (1987).

The most relevant comparisons in these tables should be made with the group of 62 ‘middle income countries,’ defined for this study with PPP GDP per capita between 3000 and 15 000 (this corresponds roughly to the middle income definition that the World Bank uses but based on 2008 GDP per capita between $1000 and $12 000). The table includes lower income (less than $3000) and upper income (greater than $15 000). Primary and secondary enrollment rates are net but tertiary rates are gross (source: WDI database).

As noted earlier in note 2, I define middle-income countries with GDP per capita (in 2005 PPP) in the range $3000 to $15 000.

Table 11 only includes MENA countries for which IHDI is available (less than one-half), so the (population weighted) average values may not offer a realistic picture of the region as a whole.

Additional information

Notes on contributors

Djavad Salehi-Isfahani

Professor Djavad Salehi-Isfahani is Professor of Economics at Virginia Polytechnic and State University, Blacksburg, VA, USA; and Non-resident Senior Fellow at the Brookings Institution, Washington, DC, USA