# **1. Introduction**

In recent years, many countries in the Middle East and North Africa (MENA) have experienced popular uprisings that eroded the trust that citizens put in their governments.<sup>1</sup> For some observers, these events take their deep roots in the way the relationships between state and society have been shaped after these countries' independence in the 1950s and 1960s, i.e., the nature of their social contract, SC hereafter. Essentially, governments that have come into power in these countries prioritized providing social benefits, often at the cost of limiting citizens' participation in crucial political and economic decisions. A growing population and an increasingly challenging economic context have weakened this governance system and generated severe discontent with the governments and their institutions.

Countries in the MENA region face multiple challenges due to an increasingly unsustainable SC. This unsustainability results from the rentierism nature of some countries, the political instability of others, and the intensified vulnerabilities of this region to health pandemics and/or climate change. Vertical controls and privileged networking between businesses and the political elites have limited economic opportunities for citizens and increased socio-economic inequalities. As a result, corruption, lack of transparency, elite capture, and political coercion are predominant concerns in this region, leading to a low level of trust in governments and providing sufficient motivation for citizens to seek political change.

Governments in MENA have objective reasons to improve trust with citizens and strengthen their SC. They could leverage digital transformation to modernize public institutions, control corruption, enhance transparency, and increase citizen participation in their countries' decision-making processes.<sup>2</sup> With unchanging institutions, the deployment of digital technology has failed to deliver the expected benefits, thus preventing digitalization from fulfilling its transformative potential in the region. In order to achieve digital transformation outcomes, it is necessary to undertake deeper reform of the ICT sector while spearheading the provision of government services online. This suggests that countries in the MENA region need

> 1 In this paper, we use The World Bank's operational definition of the MENA region. See the appendix for the list of countries.

> 2 The application of Information and Communication Technology (ICT) in governments' activities, referred to as e- government or digital transformation of governments in the literature, can be expected to have a positive effect on corruption control in MENA (Dhaoui, 2021). This effect has been particularly observed in countries with effective legal systems (Park and Kim, 2019). Recent work that brings evidence of a (mostly) positive impact of e-government on this important aspect of the SC includes Adam (2022), Agostino et al. (2021), Khan et al. (2021), Pérez-Morote et al. (2021), and Setor et al. (2021). Relatedly, Uyar et al. (2021) find that digitalization of government services has a stronger effect on mitigating tax evasion in countries where ICT adoption is higher and Spierings (2019) provides an interesting discussion of the specific drivers of social trust in MENA.

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