Private Sector Plays Crucial Role in Improving Public Services in Arab Nations

Electricity workers repair cables in Sidon, Lebanon (via The Daily Star/Mohammed Zaatari)

When governments have exclusive control over the provision of goods and services, citizens are trapped without an alternative. Because the state monopolizes the entire market, there is no competition to ensure fair prices, sufficient quality, and satisfactory customer service. Taxpayer money is poured into government services, ostensibly to improve their quality, yet private citizens rarely see improvements. For example, many homes and businesses in Lebanon lose power for hours on a daily basis. Public servants are similarly inefficient, making basic bureaucratic procedures a nightmare.

The Lebanese Institute for Market Studies (LIMS), an independent economic think tank in Beirut, advocates for the implementation of free-market economic policies in Lebanon. LIMS’ current work focuses on the government’s inability to reliably provide electricity throughout the country. With CIPE’s support, LIMS launched a campaign to create awareness of the need to repeal the electricity subsidy, stop government investment in the sector, and open the sector to private competition. As a result of LIMS’ advocacy efforts, the Lebanese government announced in February that it would repeal the electricity subsidy this year. The government also announced in June that it decided not to lease Turkish power-generating ships after Lebanese officials discovered bidding process irregularities. These decisions represent progress towards LIMS’ reform objectives.

The latest CIPE Feature Service article, written by LIMS Founder and President Patrick Mardini, describes the current condition of public services and explains why bureaucracy lacks the incentive to improve customer service throughout the Middle East and North Africa, particularly in Lebanon. In his editorial, Mardini calls for governments to open critical sectors to private competition to improve the quality of services and service provision.

Article at a Glance:

  • Public service delivery in Arab countries, particularly Lebanon, is unsatisfactory due to misaligned incentives.
  • Ethical and competent public servants are unable to provide satisfactory goods and services because of the inefficient nature of state bureaucracy.
  • Replacing government bureaucracy with private enterprises or allowing the private sector to compete for customers in the provision of goods and services would improve the experience, cost, delivery, and quality of life throughout the region.

The full article is available here.

*Note: Links to news sites are in Arabic.

Barbara Gallets is a Program Assistant for the Middle East and North Africa region at the Center for International Private Enterprise.

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