From the Introduction:
This report explores the extent to which Middle Eastern regions have generated relatively high or low levels of competitiveness. Whilst many Middle Eastern regions may owe some of their competitiveness to the natural advantages of oil reserves, for others their competitiveness has been achieved through other means. Their small size and high degree of autonomy means that many of the regions are effectively independent states. Middle Eastern nations and their regions have been characterized by some as ‘rentier states’ (Brach, 2009), whereby a rent-seeking culture characterized by traits such as a large welfare deadweight loss, a perception of the market as rewarding the rich and well-connected, and a focus on rent capture rather than innovation (Krueger, 1974), is likely to hold back regional competitiveness. As Rodrik et al. (2004) find, institutions are often more important than geography and trade integration for economic development, and it is quite conceivable that the unique political economy of Middle Eastern regions will have profound effects on both their overall competitiveness and also the sources of this competitiveness.
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