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1、AnEmpirica1Ana1ysisoftheSocia1ContractintheMidd1eEastandNorthAfricaRegionandtheRo1eofDigita1izationinItsTransformation+FaridGASM1a,Dorgy1esC.M.KOUAKOUb,Pau1NOUMBAUMc,andPedroROJASMI11AaKeywords:Deve1opment,socia1contract,digita1transformation,MENA,OECD.JE1c1assificationcodes:196,197,O1O.Theauthorswo

2、u1d1iketothankJos6AurazoandSama1hanMetevierforinsightfu1suggestions,andRadiaBachaforhe1pwith1ocatingsomeofthedatausedinthispaper.FaridGasmiacknow1edgesfundingfromtheFrenchNationa1ResearchAgency(ANR)undertheInvestmentsfortheFuture(InvestissementsdAvenir)program,grantANR-17-EURE-0010.Theviewsexpressed

3、areon1yoursanddonotnecessari1yreec1thoseoftheinstitutionsweareaffi1iatedwith.aTou1ouseSchoo1ofEconomics,UniversityTou1ouseCapito1e,farid.gasmitse-fr.euandpedro.rojas-mi11aut-capito1e.fr.hGrenob1eApp1iedEconomics1aboratory,UniversityGrenob1eA1pesandTheWor1dBank,dkouakouwor1dbank.org.cTheWor1dBank,pno

4、umbaumwor1dbank.org.1. IntroductionInrecentyears,manycountriesintheMidd1eEastandNorthAfrica(MENA)haveexperiencedpopu1aruprisingsthaterodedthetrustthatcitizensputintheirgovernments.,In this paper, we use The World Banks operational definition of the MENA region. See the appendix for the list of count

5、ries.Forsomeobservers,theseeventstaketheirdeeprootsinthewaythere1ationshipsbetweenstateandsocietyhavebeenshapedafterthesecountries*independenceinthe1950sand1960s,i.e.,thenatureoftheirsocia1contract,SChereafter.Essentia11y,governmentsthathavecomeintopowerinthesecountriesprioritizedprovidingsocia1bene

6、fits,oftenatthecostof1imitingcitizensparticipationincrucia1po1itica1andeconomicdecisions.Agrowingpopu1ationandanincreasing1ycha11engingeconomiccontexthaveweakenedthisgovernancesystemandgeneratedseverediscontentwiththegovernmentsandtheirinstitutions.CountriesintheMENAregionfacemu1tip1echa11engesdueto

7、anincreasing1yunsustainab1eSC.Thisunsustainabi1ityresu1tsfromtherentierismnatureofsomecountries,thepo1itica1instabi1ityofothers,andtheintensifiedvu1nerabi1itiesofthisregiontohea1thpandemicsand/orc1imatechange.Vertica1contro1sandprivi1egednetworkingbetweenbusinessesandthepo1itica1e1iteshave1imitedeco

8、nomicopportunitiesforcitizensandincreasedsocio-economicinequa1ities.Asaresu1t,corruption,1ackoftransparency,e1itecapture,andpo1itica1coercionarepredominantconcernsinthisregion,1eadingtoa1ow1eve1oftrustingovernmentsandprovidingsufficientmotivationforcitizenstoseekpo1itica1change.GovernmentsinMENAhave

9、objectivereasonstoimprovetrustwithcitizensandstrengthentheirSC.Theycou1d1everagedigita1transformationtomodernizepub1icinstitutions,contro1corruption,enhancetransparency,andincreasecitizenPartiCiPationintheircountriesdecision-makingprocesses.The application OfInformalion and Communication Technology

10、(ICT) in governments activities, referred to as e- government or digital transformation of governments in the literature, can be expected to have a positive effect on corruption control in MENA (Dhaoui, 2021). This effect has been particularly ObSerVed in countries with effective legal systems (Park

11、 and Kim, 2019). Recent work that brings evidence of a (mostly) positive impact of e-government on this important aspect of the SC includes Adam (2022), Agostino et al. (2021), Khan et al. (2021), PGrez-Moroie et al. (2021), and Setor el al. (2021). Relaiedly, Uyar et al. (2021) find that digitaliza

12、tion of government services has a stronger effect on mitigating tax evasion in countries where ICT adoption is higher and Spierings (2019) provides an interesting discussion of the specific drivers of social trust in MENA.Withunchanginginstitutions,thedep1oymentofdigita1techno1ogyhasfai1edtode1ivert

13、heexpectedbenefits,thuspreventingdigita1izationfromfu1fi11ingitstransformativepotentia1intheregion.Inordertoachievedigita1transformationoutcomes,itisnecessarytoundertakedeeperreformoftheICTsectorwhi1espearheadingtheprovisionofgovernmentserviceson1ine.ThissuggeststhatcountriesintheMENAregionneedtoimp

14、1ementaseriesofpo1itica1andadministrativereformstoimproveservicede1iveryandstrengthenaccountabi1ity. Needless to say that MENA countries need to invest in education to develop digital skills and implement more structural and higher quality human capital projects.Ourempirica1ana1ysisisbasedonatheoret

15、ica1frameworkproposedby1oeweeta1.(2023),whichrepresentsasetofforma1andinforma1re1ationshipsbetweenstatesandcitizensinagivencountry.Thisframeworka11owsustoana1yzeacountry,sSCinamu1tidimensiona1spacewhereeachdimensionhigh1ightsanimportantfeatureoftheSC.Wespecifyasimp1eandempirica11yimp1ementab1eversio

16、nofthisconceptua1framework,whichwerefertoasa3-Pmode1.Inthismode1,acountrysSCisrepresentedbya3-dimensiona1vector.Thefirstcomponentinvo1vesthesupp1yofabasketofbasicpub1icuti1ityservices,inc1udingeducation,hea1th,waterandsanitation,e1ectricity,roadconnectivity,andte1ecoms(voicete1ephoneandinternet)tocitizens(Provision).Thesecondcomponentistheextenttowhichcitizensareprotectedagainstvio1enceandvio1ationoftheru1eof1aw(Protection),andthethirdcomponentrefer

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