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Title page 1

Contents 6

Acknowledgments 9

Executive Summary 10

Abbreviations 16

1. Wealth, Geography, and Prosperity in the Middle East and North Africa 17

OIL AND GAS WEALTH AND DEVELOPMENT OUTCOMES IN THE MIDDLE EAST AND NORTH AFRICA 17

CHALLENGES AND CONSTRAINTS 21

GEOSPATIAL INEQUALITY AND THE REDISTRIBUTION OF OIL AND GAS WEALTH 26

FOSTERING AN EQUITABLE TRANSITION TO A LOW-CARBON ECONOMY 30

NOTES 32

REFERENCES 33

2. Sharing Wealth Across Time 35

MANAGING RESOURCE REVENUES FOR STABILIZATION AND SAVING 35

INSTITUTIONAL ARRANGEMENTS FOR MANAGING RESOURCE REVENUES ACROSS TIME 43

POLICY IMPLICATIONS 47

NOTES 48

REFERENCES 48

3. Sharing Wealth Across Space 49

REVENUE SHARING AROUND THE WORLD 49

REVENUE SHARING IN MENA 54

UNITARY STATES 54

FEDERATIONS 56

POLICY IMPLICATIONS 59

REFERENCES 63

4. Sharing Wealth for Peace and Stability 66

THE ROLE OF NATURAL RESOURCE REVENUES IN COUNTRIES AFFECTED BY FRAGILITY, CONFLICT, AND VIOLENCE IN THE MIDDLE EAST AND NORTH AFRICA 66

WEALTH SHARING FOR SUSTAINABLE PEACE IN FCV COUNTRIES: BIG PROMISE, LIMITED SUCCESS 68

POLICY IMPLICATIONS 71

NOTES 73

REFERENCES 74

APPENDIX A. The Revenue-Sharing Tool: Technical Note 76

Tables 8

TABLE 1.1. Oil and gas reserves and production in MENA countries and economies, latest year available, 2021-23 18

TABLE 1.2. Development outcomes in selected hydrocarbon-rich and non-rich MENA countries and economies 21

TABLE 2.1. Fiscal balances in selected MENA countries: Actual versus permanent income benchmark, 2022 42

TABLE 3.1. Revenue-sharing models 51

Figures 7

FIGURE 1.1. Real GDP per capita in oil-rich and non-oil-rich MENA countries, constant 2015 US$ 20

FIGURE 1.2. Development outcomes in oil- and gas-rich MENA countries, Human Capital Index and poverty rate, 2010-24 23

FIGURE 1.3. Development outcomes in oil- and gas-rich MENA countries, child mortality and Gini index, 2010-24 23

FIGURE 1.4. Human capital in oil-rich and non-oil-rich MENA countries, 2010-24 27

FIGURE 1.5. Spending on direct transfers and explicit budgetary energy subsidies in the MENA region 29

FIGURE 1.6. Top 25 countries by value of fossil-fuel subsidies, 2022 29

FIGURE 1.7. Effect of government transfers on poverty reduction 30

FIGURE 2.1. Commodity price index, monthly, 1990-2024 36

FIGURE 2.2. Distribution of monthly price changes for key commodities, 1990-2024 37

FIGURE 2.3. Expenditure cyclicality of oil prices in oil-rich MENA countries, 2000-22 38

FIGURE 2.4. Expenditure cyclicality over the business cycle in oil-rich and non-oil-rich MENA countries/economies, 2000–22 39

FIGURE 2.5. GDP growth forecasting errors, 1991-2023 39

FIGURE 2.6. Revenue and expenditure flows under different rules: A hypothetical example 42

FIGURE 3.1. Budget transparency by world region 55

FIGURE 3.2. Budget transparency in MENA 55

FIGURE 3.3. Evolution of budget transparency in MENA, 2012-23 56

FIGURE 4.1. Share of oil-rich and non-oil-rich countries with conflict-related deaths in MENA 66

FIGURE 4.2. Number of conflict-related deaths in oil-rich and non-oil-rich MENA countries 67

FIGURE 4.3. The wage bill as a share of non-oil GDP in selected MENA countries 69

FIGURE 4.4. The execution rate of non-oil capital expenditures in Iraq 69

Boxes 7

Box 1.1. The middle-income trap and MENA countries 24

Box 1.2. The empirical relationship between inequality and economic development 25

Box 1.3. Energy transition, trade, and labor in MENA 31

Box 2.1. The Santiago Principles 45

Box 3.1. The empirical relationship between transparency, accountability, and development 58

Box 3.2. The empirical relationship between institutions and developmens 59

Appendix Figures 8

FIGURE A.1. The structure of the Revenue-Sharing Tool 77

FIGURE A.2. Levels of government and distribution criteria across subnational governments 78

FIGURE A.3. Example of simulations 83

FIGURE A.4. Example of simulations: Structure of government revenue allocations 84

FIGURE A.5. Example of simulations: Regional distribution of revenues by sharing criteria 85

FIGURE A.6. Example of simulations: Regional share of natural resource revenue by origin of resources 86