This paper is based on the premise that private sector development is of crucial importance to the future development of MENA countries. It demonstrates the degree to which various institutional constraints, in general, and impediments to dispute resolution, in particular, reduce the competitiveness of private firms in the MENA region by increasing transaction costs. It describes existing dispute resolution systems in the MENA region and the impediments to firm competitiveness resulting from their shortcomings. It identifies the three major alternative means of reducing the impediments and costs of dispute resolution, namely legal reform, judicial reform and “alternative dispute resolution” methods (ADRs). Each of these general approaches can take various forms, each form having certain necessary pre-conditions and advantages and disadvantages. Since MENA countries vary considerably in their existing environmental conditions and social objectives, no single approach is likely to be suitable for all. Moreover, individual entrepreneurs facing country-specific disputes may well prefer different approaches. While the paper focuses on MENA countries, it also addresses relevant methods of reform used in some Latin American, Eastern European and East Asian countries, which have been relatively more successful than others.