An empirical analysis of the social contract in the Middle East and North Africa region and the role of digitalization in its transformation

Abstract

This paper presents an empirical analysis of the social contract (SC) in MENA based on a simple model synthesizing three main characteristics of a SC linking governments and citizens: Participation, Protection, and Provision. Using this 3-P framework, we focus on the role of provision and protection in determining citizen participation, a question that drew much attention following the recent economic and social developments in MENA. We compare our characterization of the SC in MENA and Organisation for Economic Co-operation and Development (OECD) countries and find robust empirical evidence that, in MENA, the benefits provided to citizens through improved delivery of basic services have come at the cost of impaired participation. We also find that digital transformation, a potential channel through which the SC may improve, has an inversely U-shaped effect suggesting that institutional changes are called for in MENA countries before their SC is comparable to that of OECD countries.