Poor Places, Thriving People

MENA DEVELOPMENT REPORT
Poor Places,
Thriving People
How the Middle East and
North Africa Can Rise Above
Spatial DisparitiesPoor Places, Thriving PeopleMENA DEVELOPMENT REPORT
Poor Places, Thriving People
How the Middle East and
North Africa Can Rise Above
Spatial Disparities© 2011 The International Bank for Reconstruction and Development / The World Bank
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ISBN: 978-0-8213-8321-6
eISBN: 978-0-8213-8423-7
DOI: 10.1596/978-0-8213-8321-6
Library of Congress Cataloging-in-Publication Data
Poor places, thriving people : how the Middle East and North Africa can rise above spatial
disparities.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-8213-8321-6 — ISBN 978-0-8213-8423-7 (electronic)
1. Industrial location—Middle East. 2. Industrial location—Africa, North. 3. Middle East—
Economic conditions—Regional disparities. 4. Africa, North—Economic conditions—Regional
disparities. 5. Space in economics. I. World Bank.
HC415.15.Z9D576 2011
339.4'60956—dc22 2010038030
Cover photo: Loïc Whitmore/World Bank Contents
Preface xvii
Acknowledgments xix
Abbreviations xxi
1Overview 1
The Political Demand: Spatial Equity with Productivity 1
Spatial Disparities in Living Standards: Uncovering
the Truth 3
Policy Package 1. Level the Playing Field and the
Opportunity for Human Development in
Poor Places 11
Policy Package 2. Connect Poor Places to the Poles of
Development 23
Policy Package 3. Underpin Private Sector Interest in
Nonleading Areas 26
Proximity for All: Public Institutions for Spatial Policies 29
Endnote 32
References 32
2 The Political Demand: Spatial Equity without
Compromising Productivity 35
MENA’s Spatial Disparities in Living Standards:
Six Facts 36
Politics Makes Geography Important 38
MENA Needs Economic Agglomeration 39
Spatial Disparities Create Political Stresses 44
Women and Men Experience Spatial Inequalities
Differently 46
vvi Contents
Spatial Equity with Spatial Efficiency 48
Matching Policy Packages to Lagging Areas:
A Three-Way Framework 49
Endnotes 58
References 59
3 Diagnose to Prescribe: Uncovering the Truth
about Spatial Disparities 63
What Kind of Spatial Inequality Does the
Country Have? 64
Is the Lagging Area a Fringe, Belt, or Pocket? 112
Endnotes 124
References 124
4 Policy Package 1. Level the Playing Field and
the Opportunity for Human Development in
Lagging Areas 131
Apply in All Circumstances: The Only Package for
“Fringe” Areas 131
How Governance Affects Urbanization—Some
Numbers and an Explanation 133
How Differences in the Subnational Investment
Climate Can Handicap Lagging Areas 141
How to Manage the Spatial Dimension of Public
Expenditure 146
How to Correct Spatial Disparities in Public
Education Systems 152
Reducing Gender Disparities in Education in
Lagging Areas 163
Health: Correcting Spatial Disparities in
Access to Care 169
The Better Social Safety Nets Are Targeted, the
Better Spatial Disparities Are Mitigated 176
Smoothing the Path for City Growth 189
Endnotes 203
References 205
5 Policy Package 2. Connecting Poor Places to the
Poles of Development 213
The Power of Spillovers 213
Road Transport: An Extensive Long-Distance Network
but an Underdeveloped Short-Distance Connectivity 217Contents vii
Regional Trade Facilitation Matters Crucially
for Lagging Areas 228
Priorities for Improving Spillover Connectivity 230
Electronic Proximity: New Tool for the Integration
of Lagging Areas 232
Endnotes 241
References 241
6 Policy Package 3. Underpin Private Sector Interest
in Nonleading Areas 247
Difficulty and Expense of Using Public Money to
Lure Development to Lagging Areas 250
MENA’s Focus on Using Public Resources to Override
Economies of Agglomeration 251
Financial Incentives to Steer the Spatial Pattern of
Development Have Not Been Successful 254
New Paradigm of Regional Economic
Development Policy 258
Realizing Agricultural Potential through Clusters 262
Conclusion 268
Endnotes 269
References 269
7 Proximity for All: Public Institutions for
Spatial Policies 275
Spatial Disparities: A Big Task for the State 275
How States Organize and Mobilize to Address
the Spatial Dimension of Policy 278
Conclusion: Keeping Spatial Development Simple 290
Endnotes 293
References 293
Appendix: MENA Region 297
Index 341
List of Boxes
Box 1.1 Convergence Trends for the Islamic
Republic of Iran, Tunisia, and the
Arab Republic of Egypt 9
Box 2.1 Ibn Khaldun and the Political Economy
of Spatial Disparities 45viii Contents
Box 2.2 A Migrant’s Wife Has Difficulties with the
Local Authorities 47
Box 2.3 Mind Your Language! 50
Box 3.1 The Nile Delta: Urban, Rural . . . or
Rurban? 64
Box 3.2 Decomposing MENA’s Inequality into Its
Spatial and Nonspatial Components: A
Worthwhile Exercise, Despite the MAUP 79
Box 3.3 Caffeine-Based Networking among Cairo
Construction Craftsmen 110
Box 3.4 The Arab Republic of Egypt’s Human
Development Reports: A Model for
MENA? 120
Box 4.1 Lagging Areas: Is Culture to Blame? 132
Box 4.2 An Entrepreneur’s Experience of Spatial
Disparities in the Business Environment 142
Box 4.3 Making the Subnational Investment
Climate Work for Lagging Areas: An Idea
for Policy Makers 145
Box 4.4 Algeria Introduces Spatial Salary Incentives,
with Mixed Results 160
Box 4.5 Leveling Spatial Disparities in Education:
Nine Ideas for Policy Makers 168
Box 4.6 Leveling Spatial Disparities in Health:
Four Ideas for Policy Makers 177
Box 4.7 Harnessing Social Safety Nets to
Lagging-Areas Policy: Three Ideas for
Policy Makers 190
Box 4.8 Stories of Low-Income Housing Provision:
Tunisia and the Islamic Republic of Iran 194
Box 4.9 Facilitating Smoother Urbanization: Six
Ideas for Policy Makers 202
Box 5.1 Seeking the Balance between
Underregulation and Overregulation
of Freight and Passenger Transportation 227
Box 5.2 Enhancing Spillover Connectivity in
MENA: Four Ideas for Policy Makers 233
Box 5.3 Bringing ICT Connectivity to Lagging
Areas: Two Ideas for Policy Makers 240
Box 6.1 Tax Breaks for Lagging Areas in MENA 253
Box 7.1 Examples of Appointed Provincial and
Elected Municipal Local Administration
in MENA 279