MENA Businesses and Global Trade: Conflicting Rule of Law Approaches and Transaction Costs

Abstract Businesses from the Middle East and North Africa (MENA) aiming for a global reach must navigate through different levels of rule of law—with different degrees of strength—to access foreign markets. The rule of law is essential from a business perspective as it reduces the costs of transactions on the global market. However, the paper aims to demonstrate that there are transaction costs due to the frictions between the rules of law in the multilevel system, which the MENA business must take into consideration in its search for contract partners and new markets. The focus is on the overall rule of law components of the World Trade Organization, the European Neighbourhood Policies, and the Chinese Belt and Road Initiative and their interaction.