Publications /
Book / Report

Back
Informality and Inclusive Growth in the Middle East and North Africa
Authors
Gladys Lopez-Acevedo
Marco Ranzani
Nistha Sinha
Adam Elsheikh
June 23, 2023

This report was originally published on openknowledge.worldbank.org

The long-standing informality debate in the Middle East and North Africa (MENA) Region has taken on a new urgency as it looks for a pathway to more socially inclusive growth that is less reliant on fossil fuels. This is occurring against a backdrop of subpar labor market outcomes, further growth setbacks, and deteriorating fiscal and current account de ficits in the aftermath of the COVID-19 pandemic—and in the wake of high in flation and supply chain disruptions triggered by the Russian Federation–Ukraine war. "Informality and Inclusive Growth in the Middle East and North Africa" aims to better understand the characteristics and incentive structure that have led to the prevalence of informal employment in three MENA countries—the Arab Republic of Egypt, Morocco, and Tunisia. The report breaks new ground by adopting a comprehensive perspective to focus on the features of, and interrelationships among, different aspects of these countries’ institutional landscapes to make sense of the complex incentive structure that workers and firms face when deciding between formal and informal options. Specifically, the report groups these issues in three broad realms:(1) entrepreneur-worker relations, (2) taxes and transfers, and (3) market conditions.

“This report is an extremely welcome addition to the literature on MENA labor markets. By analyzing the incentive structure and institutional factors that have led to the prevalence of informal employment in Egypt, Morocco, and Tunisia, it points the way to policy actions that can be taken to reduce informality and increase social protection for workers. It is a must-read for anyone who cares about greater economic inclusion in MENA.” Ragui Assaad, Professor, Hubert H. Humphrey School of Public Affairs, University of Minnesota

“A compelling account of the implications of informality in the workforce and how economies of MENA can design appropriate policy responses. This timely report comes amid multiple social reforms in MENA and is a must-read for policy practitioners and economists in the region.” Karim El Aynaoui, Executive President, Policy Center for the New South

“This report is particularly timely given the negative impact the COVID-19 pandemic and subsequent crises have had on living standards and poverty rates around the world and especially in MENA countries. While the focus on boosting growth and achieving the Sustainable Development Goals has revolved around financing, the report sheds new light on the bene fits that tackling informality through institutional, regulatory, and policy changes could present to achieving these goals.” Mahmoud Mohieldin, Executive Director, International Monetary Fund.

RELATED CONTENT

  • October 15, 2026
    The Policy Center for the New South, in partnership with The Asian Network, is organizing a webinar titled “Emerging Powers and the Remaking of Global Order” to examine the growing role of emerging powers and the Global South at a time of profound transformation in the international sys...
  • Authors
    Florent Parmentier
    October 12, 2026
    Cet article soutient que le Chief Geopolitical Officer (CGO) doit être repensé à partir de l’expérience des entreprises africaines. Dans un environnement multipolaire et fragmenté, leur principal défi n’est pas seulement la gestion des risques, mais la préservation de plusieurs options stratégiques simultanément selon une logique de hedging. Trois modèles de CGO sont à distinguer : l’intermédiation (Office chérifien des Phosphates (OCP), Tanger Med), l’intégration régionale (Ethiopi ...
  • October 09, 2026
    Can Nigeria’s Dangote refinery help strengthen Africa’s energy security amid disruptions to global supply routes? This discussion considers how expanding local refining capacity can reduc ...
  • October 8, 2026
    This paper was originaly published on Higher Education Policy Journal This article critically assesses the alignment between Morocco’s public guidance schemes for international students and its national development goals. Specifically, it investigates the capacity of these mechanisms to transform student mobility from a potential ‘brain drain’ into a tangible ‘brain gain’. Employing a qualitative case study approach, we conducted a systematic content analysis of 204 mobili ...
  • Authors
    Marie-Noelle Nwokolo
    October 6, 2026
    The author of this opinion, Marie-Noelle Nwokolo, is a 2024 alumna of the Atlantic Dialogues Emerging Leaders Program.In September 1978, delegations from 138 countries gathered in Buenos Aires, Argentina, around a powerful idea: developing countries had knowledge, experience and capabilities worth sharing with one another. The Buenos Aires Plan of Action gave institutional form to what we now call South-South Cooperation, part of a wider post-colonial effort by developing ...
  • Authors
    October 2, 2026
    Le Cameroun dispose d'importants gisements de minerais, notamment de fer, de la bauxite, d'or, de cobalt, de nickel, de manganèse, de calcaire, de marbre, de diamants, entre autres. L'industrie minière du pays est restée dominée par l'exploitation artisanale et à petite échelle, en particulier l'orpaillage, tandis que les hydrocarbures ont représenté l'essentiel des recettes issues des industries extractives. Le pays cristallise ainsi le paradoxe africain : malgré l’ampleur et la di ...
  • Authors
    Luladay Berhanu Mengistie
    Guillaume Gérout Suominen
    September 21, 2026
    The African Union Summit of February 2026 instructed the African Continental Free Trade Area (AfCFTA) Council of Ministers to negotiate a Protocol on Industrial Policy and Development. This work, handled without adequate preparation, is likely to reproduce the weaknesses it is meant to remedy. This paper is a conceptual mapping exercise, written to raise the preparatory questions before drafting begins, rather than to prescribe outcomes.It proceeds in five sections:1. It works towar ...
  • September 11, 2026
    Le marché du travail marocain connaît, depuis les années 2000, une expansion continue de la scolarisation qui ne s'est pas accompagnée d'une transformation équivalente de la structure productive de l'économie, ouvrant la voie à des situations d'inadéquation verticale entre le niveau de formation des actifs occupés et les exigences des emplois qu'ils occupent. La présente étude analyse les déterminants du déclassement (sur-éducation) et du surclassement (sous- éducation) à partir des ...