Based on a critical review of diverse explanations for underdevelopment in the Middle East, ranging from long-run historical approaches to accounts that concentrate on developments since independence, I make two main arguments in this essay. First, a single framework cannot explain the diverse cross-national economic trajectories because the region includes countries with widely variable natural resource and human capital endowments while state institutions and state-society relations have evolved differently in countries with distinct levels and experiences of colonial rule and post-colonial state and nation-building. In fact, the MENA region is composed of three distinct types of economies, which entail different levels of population and natural resource endowments. Second, I argue that ongoing research on economic outcomes in the. Middle East should pay more attention to colonial legacies and their interaction with post-colonial policies and institutions and should seek to explain why the particular manifestation of business-government relations in the region seems to be associated with suboptimal economic performance. The chapter begins by tracing the empirical record of development in the region, focusing on standard measures of GDP and industrialization as well as social development indicators. The region’s development trajectory is contextualized in a larger set of cross-regional comparisons to elucidate the ways in which the MENA has and has not excelled with respect to economic and social outcomes. The subsequent section provides a basic typology of national political economies in the region, incorporating both political regime type and economic factors as the main criteria for classifying Middle Eastern countries. This section traces the record of economic growth and development across the distinct political economies of the region in different periods after World War II. In the remaining parts of the essay, I assess existing explanations for economic performance in the region and lay the foundation for an alternative account of the diverse economic trajectories within the Middle East.