NS4053 Spring Term 2017 Cammett: Chapter 1 Introduction and Framework

1. NS4053Spring Term 2017Cammett: Chapter 1Introduction and Framework

2. Overview • Picks up the story three years after the Arab Spring • Finds region has undergone profound political transformations • Period of relative chaos • Fierce competition between new political forces • Societies unlikely to be dominated by autocrats as in the past • Asks: What were the motivations for the Arab Spring • Question of relative importance • Political vs Economic

3. Elements of Discontent I • Political concerns included • Outrage over dictatorial rule • Repression and • Restrictions on basic liberties • Economic factors • Limited employment opportunities • Poor services – health care and education • Corruption

4. Elements of Discontent II • Arab youth survey (2010) – greatest complaints • Cost of living • Unemployment • Human rights and more recently • Income distribution – inequality • Previous edition of text had identified main elements of discontent to include • Insufficient job creation • Labor market pressures exacerbated by the youth bulge • Mismatch between educational systems and labor market needs • Declining water supplies and increased dependency on food imports • Continuing decay of public sector • Mixed record of economic liberalization • Growing housing crisis in urban areas, and • The rise of political Islam across the region

5. Elements of Discontent III • Clearly both political and economic concerns were factors responsible for mass discontent • Perceived increase in inequalities • Discontent with public services • The political economy of cronyism, • Narrowing composition of authoritarian coalitions and • Succession issues • Authors argue a political economy approach needed to explain the origins and dynamics of the Arab uprisings • Neither purely • political concerns, or • economic trends • can explain the uprisings

6. Political Economy Approach I • Sketch of the political economy approach • The interaction of political factors and real and perceived economic developments brought about the uprisings • Narrowing of authoritarian coalitions in the context of crony capitalism • The rollback of the state and • The decline of welfare regimes • Alienated formal-sector workers and middle classes

7. Political Economy Approach II • In the context of rising insecurity growing portions of Arab societies perceived the distribution of • Social services, • Justice • Good education • Good jobs and • Social mobility • Were increasingly unequal and unjust • Thus growth rates or absolute levels of income inequality cannot account for the popular movements to overthrow incumbent dictators • The perceived rise in the inequality of opportunities were at the root of the mass protests

8. Tunisia Illustration I • Tunisia illustrates the process • In mid-1980s rollback of the state began without a democratic opening • Enabled elite, capitalistic class to benefit from personal connections and acquire disproportionate access to lucrative opportunities • Elite allied with state security apparatuses • Enforced elite’s dominance through repression and economic co-optation to maintain support of middle class • Close state-business relations • Within a supposedly “liberal” economic environment • Dependent on political repression • Did not translate into a successful industrial policy

9. Tunisia Illustration II • System performed moderately well but • Inhibited growth and • Failed to create good jobs. • Increasingly fragile coalitions governed through divide and rule strategies based on a combination of • Blanket subsidies, • Repression and • Fearmongering about political Islam. • Supported by the West this autocratic low equilibrium lasted for several decades • Mounting fiscal pressures driven by rising subsidies and lower tax revenues led to deteriorating social services and lower pubic investment.

10. Tunisia Illustration III • As pain increased among the poor and in peripheral region • Populations identified more and more with the poor rather than the middle class • Middle class elements began to defect from authoritarian coalitions and evolve into champions of change • The process was driven by • The lack of socioeconomic advancement, and • Anger about what they perceived as rising inequality

11. Cross Regional Variations I • Outcomes of uprisings have varied across Arab World • Some experienced regime change • Tunisia, • Egypt, and • Libya • In others push back against protestors: • Syria, and • Bahrain, • For the oil monarchies – stepped up spending • Several basic economic and political factors differentiate countries of the region – explain some of the variations in Arab uprisings • Oil a key factor – allows rulers to postpone serious challenges and prevent spread of opposition groups

12. Cross Regional Variations II • Within the oil countries several key groups • Oil rich countries with low populations – oil rents can maintain the social contract • Saudi Arabia, • Qatar • UAE, and • Kuwait • Second group – medium level of oil rents per capita and large populations, oil rents insufficient to develop workable system of patronage – tended to react most violently to uprising. • Syria, • Libya • Yemen • Iraq, • Algeria • Sudan

13. Cross Regional Variations III • Extent of ethno-religious diversity also accounts for some variations in the dynamics of the uprisings • Syria • Iraq • Lebanon and to a lesser extent • Jordan • Here religious politics has shaped the demands of opposition groups and the course of the protests • Autocratic coalitions have favored some groups over others • Often resources are distributed in a way favoring one group over another

14. Cross Regional Variations IV • Another difference – monarchies • These countries seem less vulnerable to regime change • Per capita oil wealth can not account for situations in Jordan and Morocco • These rulers emphasize their legitimacy • However the structure of patronage may explain why monarchies have been less destabilized than republics • Monarchies tend to establish multifaceted authoritarian coalitions which broaden their support base

15. Political Economy Framework I • In developing a political economy framework authors start with politics defined as • The struggle over resources, and • The often conflicting interactions that ultimately produce formal and informal rules or institutions that determine who controls what types of resources and how they exercise this control • Stresses the role of institutions in shaping development • Focus is on the notion of “political settlements” or relative distribution of power among different groups and organizations contesting the distribution of resources • Political and economic elites key factors in forging political settlements

16. Political Economy Framework II • The three pillars of the framework: • The state, • The economy, and • Society • Outcomes in political economy of development result from the interactions between these three domains. • Each domain influences and shapes the other two • Each is therefore both cause and effect

17. Resources and Political Development I • The presence of abundant oil and gas reserves has shaped political and economic trajectories in tangible ways in much of the MENA region • Resource course has been used to explain economic underperformance • Divide countries into three groups depending first on their level of oil production per capita and • To this division regime type also plays a significant role.

18. Resources and Political Development II • 1. Resource-rich labor poor (RRLP) • Countries with per capita oil wealth at $10,000, includes • GCC countries – monarchies • Libya – republican state • 2. Resource rich labor abundant (RRLA) • Countries here oil production per capita varies between $250 and $10,000 includes republican states: • Algeria • Iran • Iraq • Sudan • Syria and • Yemen

19. Resources and Political Development III • 3. Resource-poor-labor-abundant (RPLA) • No or small oil rent per capita • Egypt • Jordan • Lebanon • Morocco • Palestine and • Tunisia

20. Resources and Political Development IV • With these analytical tools attempts a broad answer as to • How the development paths of Arab countries explain why some experienced major revolts but not others? and • How did the various regimes respond? • Account begins with the rise of the state • Followed by its rollback and the decline of pubic services • Coincided with a period of economic liberalization that relied more on markets than the state as an engine of growth • Both phenomena increased insecurity among non-elite populations

21. Resources and Political Development V • With the state’s fiscal crisis and the adoption of market-oriented reforms the social constituencies of authoritarian rulers gradually narrowed • Allowed for the emergence of a class of privileged, well connected elites who profited from special access to economic opportunities. • Rise of crony capitalism and growing de facto exclusion of the middle class from opportunities for socioeconomic advancement reflected shifts in economic structure • Fueled perceptions of both inequality and violations of norms of social justice • The three types of countries differ with respect to the type of social demands made during uprising and the responses of regimes to these demands

22. Authoritarian Coalition I • Postcolonial period state played an unusually important role in economies across Arab world • Slow transition from quasi-socialism that began in mid-1980s • Market liberalization and the ultimate breaking of the social contract underlying the autocratic bargain • Cannot understand ultimate collapse of the system without first understanding • Why and how reforms were delayed • Which mechanisms were used by autocrats to remain in power even as market forces chipped away at their authority and • Which contradictions emerged in this late autocratic “equilibrium” characterized by selective repression, co-potation and cronyism

23. Authoritarian Coalition II • In post-independence period rulers in both • Populist republics and the • Conservative monarchies • Expanded public welfare as part of state and nation building process • No doubt raised aspirations for themselves and their children • Basic services and stable employment provided a sense of economic security • Human development gains increased social mobility

24. Authoritarian Coalition III • Formal sector workers and especially civil servants and members of the security forces were important foundations of authoritarian bargains • Any breakdown in public welfare infrastructure that affected employees in the public secretor was bound to be politically risky • Middle classes appear to be a central actor of change in the Arab republics • For Arab autocrats, losing their middle-class anchors was tantamount to becoming naked dictatorships

25. Authoritarian Coalition IV • However indications that the middle classes were hurt by the economic liberalization programs of the 1990s and particularly their acceleration in the 2000s • Apart from direct effects on labor market interests of the middle class have been threatened • Low public sector wages fueled petty corruption in areas such as health and education • Offsetting this governments maintained subsidies on food and fuel • The authoritarian bargain of the past evolved into an alliance between elite capital and elements of the middle class receiving subsidies • Governments less and less supportive of non-elite elements

26. Authoritarian Coalition V • Middle class underwent change • In response to economic liberalization new market-oriented middle class rose in the late 1990s that mostly comprised small merchants and industrialists often in the informal sector • Benefited from the pro-market reforms as well as small, but expanding skilled component of the formal private-sector labor market • This group more politically active than older elements of the private sector • Role in Iranian revolution • Instrumental of the Justice and Development Party in Turkey • Assertive element in the Moroccan business community

27. Authoritarian Coalition VI • Deteriorating socioeconomic conditions combined with high aspirations increased discontent among the middle classes resulting in their gradual withdrawal of support for authoritarian regimes • For this group perceived condions are more important in translating grievances into action than objective economic indicators • To understand unraveling of authoritarian coalitions must comprehend how the middle classes interpreted changing socioeconomic conditions in their societies.

28. Authoritarian Coalition VII • In this regard • No evidence of a sharp spike in income inequality in the Arab countries • However inequalities of opportunity were on the rise across the non-oil exporting countries • Extremely frustrating for groups that had come to expect real social mobility as a result of state economic and welfarepolicies

29. Crony Capitalism and Job Deficit I • By the mid-1990s the ISI model of industrialization was bankrupt • Reforms underway to replace it with a more dynamic private sector-led export model • Contrary to the “Washington Consensus” theory which posits that market liberalization is the engine of significant economic growth private sector adtivity did not rise significantly • Instead of leading to a freer market, market liberalization saw instead the old regimes consolidating their shaky rule by forging new alliances with elements of the old elite caital and elements of the state bureaucracy • New regime dubbed “crony capitalism”

30. Crony Capitalism and Job Deficit II • Crony capitalism inflamed unrest in several ways • Seems to explain the economy underperformance of the region • It fueled perceptions of rising inequality and in particular the inequality of opportunities • Signaled the narrowing of the authoritarian coalitions that were squeezing out the middle classes, a key constituency of post-independence Arab regimes • Popular perceptions of business elites have become very negative in the region. Seen as responsible for • Jobs deficit • Rise in inequalities • Perpetuation of authoritarian rule

31. Crony Capitalism and Job Deficit III • The perceived corruption of the political and business elites was a key driving force of popular discontent • Perceived corruption increased markedly in the three years prior to the Arab Spring • Precise nature of state-business relations has varied from country to country • In aftermath of the uprising the importance of he Egyptian domesic economy major fctor • In Tunisia the fact that the military was far less cxentral in the authoritarian oallition accounts in part for the army’sunlwillingness to fire on protestors

32. Role of Political Islam I • In aftermath of the Arab uprisings, Islamists became increasingly important if not dominant actors in • Tunisia • Egypt, and to a lesser degree in • Libya and • Yemen • Widely accepted the uprisings were not driven by Islamists or even by increased popular support for them. • However, Islamists were the main beneficiaries of the transitional political systems that emerged after dictators ousted

33. Role of Political Islam II • Although Islamists did not • Initiate or • Lead the revolts, • They may have played an indirect role in the uprisings through the defection of the middle classes from authoritarian bargains • Islamists across the region became less threating in the 1990s because they increasingly moderated their ideology and tactics • Some of the messages of Islamist parties – emphasis on corruption and the lack of social justice under authoritarian rulers reflected and even amplified growing discontent among middle classes

34. Role of Political Islam III • Many in Islamist parties were middle class professionals who were shut out of employment and other opportunities under crony capitalist systems. • Islamism does not offer a clear-cut and uniform ideology on the market • However a dominant ideological strain associated with the rise of moderate Islamist parties • AKP in Turkey, • Muslim Brotherhood in Egypt and • Al-Nahda in Tunisia • Congruent with middle class goals and supported of market based systems

35. Role of Political Islam IV • Islamists not central actors in the uprisings • However their role in society and politics may have contributed to defection of middle classes from authoritarian coalitions • While in opposition the Islamist movements that initially came to power in Egypt and Tunisia had opposed economic policies of previous regimes they were not able to keep any of their big promises: • Promote social justice • Reduce subsidies to provide more fiscal space in budgets • Attack cronyism and eliminate waste in bloated bureaucracies

36. Conclusions • Although the three variables that form the analysis: • State institutions and policies • Economic growth patterns, and • Social actors • Treated separately in following chapters – need to remember they interact simultaneously