Accounting for slow productivity growth in North Africa: the role of policy distortions

Abstract

This study examines the factors contributing to slow productivity growth in North Africa, focusing on the role of policy distortions. It highlights how market and government failures create inefficiencies that hinder structural transformation and total factor productivity. The analysis explores how politically connected firms benefit from regulations that stifle competition and innovation, leading to resource misallocation. The study also quantifies the impact of distortions on firm productivity and human capital accumulation, emphasizing the need for governance reforms. Key recommendations include enhancing policy transparency, accountability, and impartiality to improve economic efficiency and foster sustainable growth.