Key findings: No cases demonstrate unambiguously that improved economic governance and inclusive growth has been the result of demand-led technical assistance. However, existing literature that evaluates technical assistance and public sector reforms in the Middle East and North Africa (MENA) region shows that public sector reform (PSR) can remove constraints on inclusive growth. This report identifies case studies that document PSR progress in MENA and show how further reform is possible, make the case for technical assistance and identify enabling parameters, and outline the thinking behind the contention that PSR can lead to inclusive growth.
The report finds that successful PSR reforms have occurred in MENA when: situational factors have been strong enough to counter vested interests; there has been wide stakeholder consultation; an experimental, gradual, but opportunistic approach has been used; and when there has been sustained leadership and determination. A 2010 World Bank study also identified ten principles for the implementation of public financial management reforms in MENA, which apply to PSR in general.
In general, technical assistance has worked best in countries where there has been a significant degree of ownership and direction from the recipient country. Successful cases involve the developing country identifying specific needs and interventions. Factors that undermine the effectiveness of PSR are when it is too broad in scope, over-ambitious or when it does not address government priorities.
An ineffective public sector can be a constraint on economic development and studies have shown that a responsive and effective public sector is needed for inclusive growth in Arab countries. Outside of MENA, an ineffective public administration has been identified as one of the key causes of Peru’s failure to achieve inclusive growth.