Source: Al-Wafd Newspaper
Prof. Dr. Ali Mohammed Al-Khouri
Amid the structural transformations sweeping the global economic system, it has become clear that the role of the state is no longer confined to the “night watchman” concept enshrined in traditional liberal theories, nor to the centralized distribution championed by socialist schools of thought. In the Arab world, where political history intersects with rentier economics, the public sector has become the most visible embodiment of the rentier state model, providing citizens with jobs, subsidies, and services as tools for social stability and ensuring political equilibrium. However, this model is no longer viable in its original form, in a world now driven by intelligent knowledge systems, according to the standards of artificial intelligence, knowledge capital, and efficiency-driven institutions.
The Arab public sector has been shaped as a political and economic entity, prioritizing social control over economic efficiency. For many years, it has served more as a tool for buying stability than as an engine for innovation or development. While public employment is often understood as an economic policy, it is practiced as a means of managing social stability, sometimes driven by social equilibrium and patronage rather than by actual economic needs.
From this perspective, discussions about public sector reform should not revolve around reducing the number of employees or adopting technology, but rather around the role and methods by which the state will be managed and its responsibilities towards society.
World Bank data for 2024 indicates that more than 40% of university graduates in some Arab countries prefer the public sector to the private sector, due to the “job security” it offers, even at the expense of creativity or growth. This phenomenon, common in post-colonial societies, reflects a structural flaw in the philosophy of work and expresses a distortion in incentives resulting from the absence of a truly competitive market. In this context, the state, unwittingly, becomes an impediment to growth when it provides excessive employment without productivity or spends on salaries without incentivizing performance.
It is noteworthy that the government wage bill in some Arab countries exceeds 11% of GDP, compared to a global average of 8.9%, according to reports from the OECD and the IMF. These international reports also point out that this high percentage in the region is not accompanied by a genuine increase in the efficiency of public services or productivity in Arab countries. The problem, they argue, lies not in the size of the public sector itself, but in the structure of its functions and the absence of good governance mechanisms that ensure accountability and reward efficiency.
From this perspective, the challenge in the Arab world transcends technical tools and financial pressures, touching the very core of the state model. The need is for a transformation towards a proactive state that manages development using modern state mechanisms, creating a flexible environment for evolution, keeping pace with changes, and adapting its policies flexibly to evolving realities. In this context, leading models like Estonia and Singapore, which have transformed their institutions into integrated digital networks managed by evidence and evaluated by results, can serve as inspiration.
For this transformation to occur, it must be acknowledged that public sector reform begins not with technology, but with the very institutional philosophy itself. Digital transformation is not merely about digitizing procedures, but about rationalizing policies and redefining the value the state provides to its citizens. Therefore, digitization must be integrated with building new incentive systems and establishing government data systems that are used in decision-making, not just in automating or archiving transactions.
Furthermore, restructuring the public sector necessitates a profound reform of the administrative culture, by reshaping the identity of the public employee as a “change agent” who contributes to improving services and increasing efficiency, rather than simply implementing regulations and instructions. This requires developing the capabilities of public sector employees in strategic thinking, data-driven analysis, and results-based decision-making.
At the level of economic policies, what is needed today is a shift from a model in which the state dominates economic activity to one that enables the economy to grow, driven by renewed productive forces. This requires redirecting public spending away from expanding unnecessary administrative jobs and untargeted subsidies, towards long-term investments in human skills development, digital infrastructure development, and education related to modern technologies.
To prevent reform from becoming an empty slogan, it must be governed by a clearly defined institutional framework that ensures the sustainability and effectiveness of change. This requires independent governance councils to monitor government performance, along with the adoption of results-oriented, rather than expenditure-driven, public budgets. It also necessitates establishing a clear charter of citizens’ rights that guarantees their equal access to services and data, and implementing a periodic system of performance indicators that are published transparently and compared to the performance of similar countries, allowing for objective measurement of progress and incentivizing continuous improvement.
The transformation experiences in the UAE, Saudi Arabia, and Egypt demonstrate that political will alone is insufficient without an institutional structure capable of absorbing change. Institutional reform requires confronting centers of power within the state and dismantling entrenched bureaucracies accustomed to wielding power without accountability and enjoying privileges without results.
With the introduction of technology into the government sector, its complex role becomes apparent. On the one hand, it serves as a tool for development and institutional empowerment, but on the other, it exposes latent dysfunctions when implemented in environments unprepared for structural transformation. Digitalization projects, when not integrated within a clear institutional vision based on transparency and accountability, can transform from a tool for development into a new means of concealing flaws. Just as traditional bureaucracy hinders the efficiency of government operations, digitizing processes without effective governance can produce a different kind of impediment—one that is more complex and less visible.
Hence the importance of building digital infrastructures based on the principles of open governance, which promotes transparency, enhances citizens’ trust in institutions by making information available, and balances the relationship between the state and society in a way that reinforces the concept of mutual oversight and shared responsibility.
What is needed today is a focus on improving the quality of services from the perspective of society as a whole, and involving it in setting national priorities and assessing their impact. The role of the public sector must also shift from partial and traditional roles to one that operates according to specific objectives, measurable indicators, and results-based management of resources.
Furthermore, recruitment and promotion systems should be reformed to be based on merit, not seniority, and decision-making structures should be modernized to be data-driven, not based on individual judgment. Ultimately, an effective state is one that scrutinizes the performance of its institutions, links budgets to impact, and invests in the development of its employees as the agents of transformation.
The success of reforms will be measured by the ability to achieve tangible results, within a specific timeframe and with limited resources, in which the public sector becomes a tool for creating solutions, not just implementing them, and becomes a true partner in change, not a structural burden that weighs down development.
