The Economics of Water Scarcity in the Middle East and North Africa - Institutional Solutions

Jul 19, 2026

Examines how institutional arrangements shape water scarcity outcomes across the Middle East and North Africa. Integrates economic perspectives on water pricing, state roles, and reform pathways with an assessment of supply-side and demand-side institutions. Analyzes externalities from depletion and pollution, linking them to long-term financing and regulatory capacity. Concludes by explaining why prevailing institutions can undermine water security and broader well-being, even when infrastructure expands.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages229

Reading Time9 h 37 min

Foreword

Main Messages

Acknowledgments

About the Authors

Executive Summary

Abbreviations

Part I The Status Quo Institutions That Allocate Water

Chapter 1 An Economic View of Water Scarcity: The Inescapable Role of the State in Allocating Water

Chapter 2 Middle East and North Africa: Diversity of Economic and Hydrological Context

Chapter 3 Supply-Side Institutions That Build Large Infrastructure but Fail to Reduce Water Stress

Chapter 4 Demand-Side Behavior That Challenges States’ Ability to Raise Finance and Regulate Water

Chapter 5 Externalities: Status and Trends of Water Depletion and Pollution

Part II Understanding Why Status Quo Institutions Produce Outcomes That Endanger Water Security and Well-Being

Public Disclosure Authorized Public Disclosure Authorized The Economics of Water Scarcity in the Middle East and North Africa INSTITUTIONAL SOLUTIONS Dominick de Waal Stuti Khemani Andrea Barone Edoardo Borgomeo Pub lic Disclosure Authorized Pub lic Disclosure Authorized The Economics of Water Scarcity in the Middle East and North Africa The Economics of Water Scarcity in the Middle East and North Africa Institutional Solutions Dominick de Waal, Stuti Khemani, Andrea Barone, Edoardo Borgomeo © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; [Internet: www.worldbank.org](Internet: www.worldbank.org) Some rights reserved 1 2 3 4 26 25 24 23 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) [http://](http://)[ ](http://)[creativecommons.org/licenses/by/3.0/igo. Under](creativecommons.org/licenses/by/3.0/igo. Under) the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: de Waal, Dominick, Stuti Khemani, Andrea Barone, and Edoardo Borgomeo. 2023. The Economics of Water Scarcity in the Middle East and North Africa: Institutional Solutions. Washington, DC: World Bank. doi:10.1596/978-1-4648-1739-7. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washin

FAQs

How does the state influence water scarcity outcomes in the region?

The analysis emphasizes the state’s unavoidable role in allocating water and shaping reform directions through economic mechanisms and institutional design.

What are the main supply-side institutional challenges discussed?

It highlights the origins and evolution of water institutions, the industrial-scale expansion of infrastructure, and how this expansion can still fail to reduce water stress.

Why do demand and externalities threaten water security despite financing and regulation efforts?

Water demand drivers and interactions between irrigated agriculture and cities strain states’ ability to raise finance and regulate, while externalities from depletion and pollution impose hidden long-term costs.

Jul 19, 2026

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