Institute for Trade Standards and Sustainable Development
By: Osman Aziz
Efforts undertaken by the World Bank, IMF, and other international financial institutions to analyze the nature of government accountability and inclusiveness in the Middle East have been effective insofar that they have analyzed the situation in MENA nations under normative terms. In their analysis, the question of government accountability and corruption hints to the notion of extra-legality, a concept enshrined in Hernando De Soto’s “dead capital”. In the World Bank’s diagnosis of MENA nations in 2003, they concluded that the question of spurring greater accountability and transparency in Middle Eastern nations hinged on the nations ability to undo the bureaucratic hamstringing of the private sector.
“Improving the inclusiveness and accountability of governance mechanisms in MENA will help in three ways: by reducing the scope for persistently arbitrary or distorted policies, by improving bureaucratic performance and thus reducing the uncertainties and costs of doing business, and by improving the delivery of public services for businesses to be productive.”
The burgeoning debate surrounding sustainability in not only the
Hernando De Soto’s seminal work, The Other Path, was written in response to the socialist ideology of the Shining Path, a terrorist organization with its allegiance firmly rooted in Maoism. In it he argues that the plight of rural farmers is directly correlated with the government’s inability to enable the average citizen with a set of legal rights wherein he/she may be able to leverage, mortgage, or accrue equity on their land. He also claims that if the average citizen was enabled with such economic freedoms, they could become, in his words, budding entrepreneurs. His thesis and study on
The OECD’s work in 2007 regarding the relevancy of societal norms and governing institutions outlined a basic framework for the definition of such norms. In their work “Informal Institutions: How Social Norms Help or Hinder Development,” Johannes Jütting, Denis Drechsler, Sebastian Bartsch and Indra de Soysa level disparate criticisms, stating that informal institutions are either the result of a poor effort on the part of the government for establishing foreign norms in countries with their own traditions, or the fault of the citizens of such nations for not investing trust within the systems introduced to them by their governments.
“In emerging and developing countries, formal institutions such as laws, regulations and legally enforced property rights are usually poorly established. Informal institutions based on trust, solidarity and social capital – such as family and kinship structures, traditions, civil and social norms – often substitute for, compete with or complement formal institutions. In fact, informal institutions are of high importance and can help or hinder the development process: ignoring them can be costly for partner and donor countries alike.”
The particular paradigm presented by the MENA region poses a serious reconsideration of the institutions that currently exist.
 “Better Governance for Development in the Middle East and
 “Dead Capital in
 Organization for Economic Cooperation and Development. Development Centre Studies Informal Institutions: HOW SOCIAL NORMS HELP OR HINDER DEVELOPMENT. (2007)