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 application and analysis of the social contract in countries in the Middle East and North Africa. The paper suggests a simple operational model that synthesizes a social contract’s three main characteristics: participation, protection, and provision, between a government and its citizens. This empirical “3-P” framework allows investigating the role that government provision and protection may have on citizen participation, which is particularly pertinent given the political and economic development of countries in the Middle East and North Africa. The paper compares the evaluation of the health of the social contract in countries in the Middle East and North Africa region to that of countries in the Organisation for Economic Co-operation and Development. The empirical evidence shows that the social benefits provided to citizens through improved delivery of basic services have come at the cost of impaired political participation. This feature of the social contract in the Middle East and North Africa may be considered one of the root causes of the social turmoil some countries have been struggling with in recent decades. Digital transformation is a potentially powerful channel through which the relationship between government and citizens can improve, and the paper finds that it has a three-year lagged positive effect on the quality of the social contract in the Middle East and North Africa and the effect is inversely U-shaped. This suggests that structural and institutional improvements are needed in countries in the Middle East and North Africa for the quality of their social contract to reach levels comparable to those of countries in the Organisation for Economic Co-operation and Development.