Abstract
Since the Arab uprisings of 2011, there has been much attention on economic inequality in the Arab world as a possible source of popular dissatisfaction with the status quo. Curiously, the standard measures of inequality, such as the Gini index, do not place most Arab countries among the highly unequal developing countries, such as China or Latin American countries (Bibi and Nabli 2009, Belhaj-Hassine 2015). To reconcile the widely held perceptions of profound social and economic injustice in the region (Cammett et al. 2015) with low estimates of income inequality -- the two parts of the MENA inequality puzzle", as labeled by the World Bank (2015) --researchers have looked for evidence of inequality beyond the standard indicators of income and consumption. World Bank (2015) provides evidence of high levels of inequality in financial wealth and Salehi-Isfahani, Belhaj-Hassine, and Assaad (2014) and Assaad, Salehi-Isfahani, and Hendy (2013) find high levels of inequality of opportunity in education in several MENA countries. On the other hand, evidence of economic mobility from wage data in Egypt does not indicate particularly high levels of inequality of opportunity (Belhaj-Hassine 2012).
In this paper we present estimates of the Human Opportunity Index (HOI) for 10 MENA countries using harmonized household expenditure and income surveys. This index measures equality of opportunity in access to basic services (electricity, piped water, sanitation and basic education). We use a uniform set of circumstances to measure access to a service in a given country over time, between MENA countries, and between the MENA region and other developing regions. We find that HOI levels in MENA countries have generally improved over time and compare well with those for Latin America.
Our estimates of inequality of opportunity are lower bounds but provide valuable information on how access to a service in a specific country has changed over time, and how it compares to other countries. We also provide decompositions of the HOI over time (change in average access vs. the distribution of access) and Shapley decompositions of the contribution of different circumstances to progress in human opportunities.
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