Economic Research Forum (ERF)

Prospects for development with democracy in the Arab world

883
What are the prospects for democracy in the Arab world? This column expresses the hope that as conflict-afflicted countries embark on their programmes of economic reconstruction, autocratic institutions will not be re-established under the pretext of the need for a speedy and steady recovery. The optimal path of development necessarily includes robust growth, equity as well as democracy.

In a nutshell

There is no common agreement on how different political regimes influence social and economic development.

The fact remains that democracy and freedom are essential ingredients of human welfare.

They go hand in hand with national satisfaction associated with equitable and sustainable economic development that incorporates social justice.

Analyses of the causes of the various Arab uprisings inspired by the successful overthrow of autocracy in Tunisia in December 2010 abound. They include a gamut of interacting economic, political and social factors that had been building up over the years towards a hoped-for democratic space in the region.

One recent study notes that a growing and broadly shared dissatisfaction with the quality of life might have helped to fuel the uprisings. Ordinary people, especially those from the middle class, were frustrated by their deteriorating standards of living due to a lack of job opportunities in the formal sector, poor quality public services and the lack of government accountability (Devarajan and Ianchovichina, 2017).

Other studies highlight the negative impact of rising unemployment – especially youth unemployment – to very high levels. In particular, unemployment above a certain threshold has been identified as one of the important triggers of the uprisings (Elbadawi and Makdisi, 2017).

Growing unemployment tended to weaken regimes’ hold on power and the ‘authoritarian bargain’ – that is, their ability to trade off public goods and other economic benefits for political rights and participation. As some writers have put it, the Arab ‘social contract’ began to unravel (Amin et al, 2012).

Evidence on the impact of inequality is less conclusive. Trends in income inequality in the Arab region seem to have been in line with trends elsewhere and not to have changed much over time (Hakimian et al, 2013; Bibi and Nabli, 2010). It could therefore be surmised that income inequality is likely to have played at best a secondary or even only a supporting role in the uprisings, though it is likely to have been reinforced by ethnic or sectarian inter-group inequality (Devarajan and Ianchovichina, 2017).

Some researchers have ascribed declining trust in political institutions as one element in the Arab uprisings (Spierings, 2017). Of equal if not greater importance was the deep-seated and growing yearning of citizens for freedom and political participation in an increasingly open world, over and above their discontent at having felt disenfranchised and largely excluded from the benefits of economic development (Altayib, 2011; Makdisi, 2011).

In support of this view, recent research on the uprisings finds that civil and political freedoms, emancipation from oppression and fighting corruption matter to the population as much as social and economic justice and other socio-economic concerns (World Bank, 2015).

As it turned out, the uprisings engendered powerful counter moves on the part of the Arab ruling classes. As a consequence, with the exception of Tunisia (and Lebanon’s long-standing ‘consociational democracy’), the entrenched autocracy in the region has yet to yield substantively in the direction of genuine democracy, though limited liberalisation measures were initiated in a few countries after the uprisings.

The region’s resistance to democracy is not unique or specific. It can be ascribed to the same elements that have, to varying degrees, helped to maintain its persistent but varying forms of autocracy, notably oil wealth, conflicts, neighbourhood effects and external interventions by both regional and international powers (Elbadawi and Makdisi, 2017). In particular, the region’s conflictual environment has played a major role in retarding potential moves towards democratic governance.

The civil conflicts that emerged in the wake of the uprisings have further strengthened this environment. As a consequence, fed by sectarian divisiveness and especially the rise to power of strict religious fundamentalist groups, the negative impact of conflicts in the region on the process of democratisation has further intensified, posing increased threats to any potential move in this direction.

So what are the prospects for democracy in the Arab world?

Factors promoting democratic governance in the region include modernising influences (for example, a growing middle class, improving levels of education and improving gender equality), increasing incompatibility between exclusive political institutions and greater openness of economic institutions, as well as persistent popular aspirations for freedom, equal political rights and social justice.

But to the extent that major conflicts (including the Arab/Israeli conflict) are not justly resolved, I submit that the positive influences of these factors will be enfeebled and that, therefore, the spread of genuine democratic governance in the region – with its broader developmental implications – will be curtailed. Whatever these just resolutions, they can only reinforce the factors working to weaken the foundations of Arab autocracy.

At the same time, the corrosive political effects of relatively abundant oil resources will over time be countered by influences forcing change, such as mounting socio-economic inequities, a growing middle class, a weakening ‘rentier’ effect (due in part to changing internal economic conditions), as well as a growing democratic neighbourhood as more and more countries move to partial if not full democracies.

But why democratic governance in the first place?

Admittedly, there is no common agreement on how different political regimes influence social and economic development. It has been argued that democratic institutions do not necessarily lead to better economic outcomes and indeed some form of autocratic rule may be desirable to accelerate development. Pre-democratic Korea has often been cited as an illustration of this view.

On the other hand, it has also been argued that democratic governance is better positioned to serve the desired objectives of equitable development and, in the case of conflict-afflicted countries, reconstruction.

This is especially true at the level of policy-making in that democratic institutions are more capable than autocratic ones of providing transparent and predictable policies, with clear, easy-to-monitor mandates and non-arbitrary decision making. In this regard, it should be recalled that one of the main faults of Arab political regimes has been, and remains, elite capture of the state with the consequent highly disproportionate economic benefits accruing to the governing class.

Whatever position one takes on the comparative impact of democratic versus non-democratic institutions on economic outcomes, the fact remains that democracy and freedom are essential ingredients of human welfare. They go hand in hand with national satisfaction associated with equitable and sustainable economic development that incorporates social justice.

To conclude, the hope is that as the conflict-afflicted Arab countries embark on their reconstruction programmes, autocratic institutions will not be re-established under the pretext of the need for a speedy and steady recovery. This would be a false pretext aimed at a return to autocracy.

ERF and other researchers are called upon to make clear that the constituents of an optimal developmental path necessarily include robust growth, equity as well as democracy.

Further reading

Altayib, A (2011) ‘The Socio-economic Background of the Tunisian Revolution: A Sociological Reading’, paper presented at the conference ‘Revolution, Reform and Democratic Transition in the Arab World’ organised by the Arab Center for Research and Policy Studies, Qatar (in Arabic).

Amin, M, et al (2012) After the Spring: Economic Transitions in the Arab World, Oxford University Press.

Bibi, S, and MK Nabli (2010) ‘Equity and Inequality in the Arab Region’, ERF Policy Research Report No. 23.

Devarajan, S, and E Ianchovichina (2017) ‘A Broken Social Contract, Not High Inequality, Led to the Arab Spring’, Review of Income and Wealth.

Elbadawi, I, and S Makdisi (2017) Democratic Transitions in the Arab World, Cambridge University Press.

Hakimian, H, et al (2013) ‘Inclusive Growth in MENA: Employment and Poverty Dimensions in a Comparative Context’, FEMISE Research Report No. 35-16.

Makdisi, S (2011) ‘Autocracies, Democratization and Development in the Arab Region’, ERF Working Paper No. 622.

Spierings, N (2017) ‘Trust and Tolerance across the Middle East and North Africa: A Comparative Perspective on the Impact of Arab Uprisings’, Politics and Governance.

World Bank (2015) Inequality, Uprisings, and Conflict in the Arab World.

Most read

Formidable challenges facing the Middle East require a sea change in economic policies

Weakening global growth, endemic conflicts and increased tensions within the Middle East and North Africa (MENA) – as well as emerging challenges such as climate change and rapid demographic shifts – are likely to have an adverse impact on the region’s economic, social and political stability in the coming years. This column outlines the policy responses that are needed to avert disaster.

Lebanon’s 2019 austerity measures: enough to restore confidence?

Lebanon has entered the danger zone of high public indebtedness. As this column explains, this could seriously compromise the credibility and sustainability of the fixed exchange rate regime and may spark renewed inflationary pressures. Proposed austerity measures are unlikely to be enough to restore confidence in the country’s economy.

How to liberate Algeria’s economy

Algeria’s economy is growing far too slowly to provide enough jobs for a young, expanding and increasingly restless population. As this Project Syndicate column explains, the country's authorities need to boost competition, spur the creation of a digital economy and revamp state-owned enterprises.

The impact of hosting refugees on the labour market

What are the labour market effects of a massive influx of people on members of the host community? This column examines the experience of Jordan resulting from the conflict in neighbouring Syria. Evidence shows that Jordanians living in areas with high concentrations of Syrian refugees had no worse labour market outcomes than Jordanians with less exposure to the influx.

Economies of agglomeration and firm productivity in Egypt

There is a strong body of international evidence that firms are more productive when they cluster near one another geographically. This column reports new findings on the substantial productivity benefits of such agglomeration in Egypt. The results have important implications for policy, including the value of establishing specialised industrial zones for promising business clusters with high growth potential.

Unemployment in Tunisia: why it’s so high among women and youth

Why is unemployment among women, youth and educated people so high in Tunisia? Drawing on a new ERF book – The Tunisian Labor Market in an Era of Transition – this column explores three key factors - labour supply pressures; weak demand for skilled labour; and rigidities in the core institutions of the labour market – as well as potential policy responses