Panel 3h. Comparative & International Political Economy and the Middle East

Chair: Daniel Neep

Why is Syria so Statist? Revisiting Ideas and Economic Change in Historical Institutionalism
Daniel Neep, Georgetown University

Why did Syria transition from a laissez-faire to a statist economy between 1946 and 1954? The literature proposes a political or class-based explanation: that the anti-colonial old bourgeoisie that inherited power after independence was so discredited by its record of economic mismanagement, cronyism, and defeat in the 1948 war that army officers felt obliged to intervene (Seale 1986; Torrey 1964). Subsequent military regimes oversaw a historical class compromise (‘social pact’) that promised economic development in exchange for political quiescence (Heydemann 1999). Yet why did Syrian officers, industrialists, and entrepreneurs converged upon one particular set of policies about the economic role of the state? Why, out of all the options available to them, did military rulers in post-WWII Syria adopt this variant of state interventionism? This paper explains the shift by drawing on historical institutionalism to emphasise the importance of ideas in producing economic paradigm shifts. While constructivist IPE (Blyth 1997, 2002; McNamara 1998) draws attention to ideational factors, it overlooks that ideas are neither free-floating nor independent of the social, institutional, and material contexts in which they are articulated. This paper therefore modifies historical institutionalism with Cultural Political Economy (Sum and Jessop 2013; Best and Paterson 2009; Sayer 2002), which takes into account the structural, agential and technological contexts in which such discursive constructions are embedded. In addition to providing new insights into a formative period of Syrian state building, the paper also contributes to our general understanding of economic policymaking under authoritarian rule in the Arab world.

Beyond the Rentier State: Why have Middle East Studies ignored IPE?
Hannes Baumann, Kings College London

Resorting to caricature, we can say that political economists of peripheral regions explain Asian industrialisation (developmental state, flying geese), Latin America’s failed industrialisation (dependency theory), and Africa’s even greater failure (weak/failed states). Thanks to abundant oil reserves, the gift of Middle East studies to political economy was the “rentier state” concept. Middle Eastern economic exceptionalism seemed to explain the political exception of a region untouched by the “third wave of democracy”. However, while Middle East studies thus contributed to comparative political economy (CPE), scholars of international political economy (IPE) have ignored the region. They see the region as so peripheral and “exceptional” that little can be learned from it. Middle East specialists focus their energies on CPE, they refuse to place Middle Eastern political economies into the wider web of global capitalism, and they tend to indulge in “methodological nationalism”. I will challenge these perspectives by discussing three attempts at “bringing the Middle East back in” to IPE: David Spiro argues that Saudi Arabia was playing a central role in reshaping US monetary and financial hegemony in the 1970s, Timothy Mitchell’s speaks about “carbon democracy”, and Adam Hanieh looked at “Gulf capital”.

Varieties of Capitalism in the Arab World: State Intervention and Segmentation
Steffen Hertog, London School of Economics

In recent years, comparative political economists have increasingly focused on the applicability of “Varieties of Capitalism”-type analyses outside of advanced Western economies. The most notably contribution in this regard is Ben Ross Schneider’s concept of “Hierarchical Market Economies” (HMEs) which he has developed to analyse the capitalist systems of Latin America, and which are characterized by a debilitating equilibrium of low skills, diversified business groups, atomized labor relations and a heavy presence of foreign multinationals. This paper investigates whether there are clusters of linked characteristics that similarly set apart capitalist systems in the Arab world or in sub-sections thereof. It will argue that with the exception of the strong role of multinationals, Arab capitalism in the “core Arab” states of Maghrib and Mashreq have much in common with HMEs, which appears to be a concept that in important parts describe developing world capitalisms in general. The paper will highlight an important additional trait that makes the core Arab capitalist systems stand out: a particularly deep, double segmentation of labor markets and business sectors into a) formal state-operated, b) formal private and c) informal private, resulting in a multi-tiered system of insiders and outsiders, contributing to the “negative complementarities” described by Schneider. The double segmentation is caused by traditions of deep state intervention and results in uniquely low levels of trust between government, business and labor market participants, thereby undermining state capacity and contributing to the economic policy stalemates witnessed across the region. The paper will draw on case literature, descriptive statistics, and poll data to make its descriptive and analytical case.

The International Political Economy of Egypt after Mubarak: Critical IPE as Bridge between Global, Regional and National Scales?
Roberto Roccu, Kings College London

This paper suggests that critical strands in International Political Economy (IPE) have much to contribute to the study of the Middle East. This point is illustrated with reference to a scalar-relational approach based on articulation (Macartney and Shields 2011), applied to the study of post-Mubarak Egypt. Following Stuart Hall (1996), articulation is understood as an asymmetrical relation of determination in the first instance on the one hand and relative autonomy on the other hand. In the case of Egypt, two related instances of relative autonomy appear to have particularly wide-ranging implications. Firstly, Gulf powers have exploited the increased relative autonomy of the regional scale produced on the one hand by the effects of the global financial crisis on US and European power projection in the Middle East, and on the other hand by the popular upheavals leading to Mubarak’s overthrow. In this respect, both Qatar’s failed attempt at shoring up Morsi and the current heavy exposure of Saudi Arabia and Kuwait in support of Sisi provide interesting counterpoints to traditional understandings of imperialism in the Middle East. Secondly, relative autonomy also affects economic policies. In Egypt, the relatively greater penetration of Gulf capital vis-à-vis US and European capital appears to be laying down the conditions for a ‘neoliberal patron-client’ arrangement, with GCC’s budgetary support exchanged for increased access to profitable markets and companies. In showing the interactions between global, regional and national actors and factors such an approach also contributes to bridging the gap between IR/IPE and Middle East studies.

Political Economy of Decentralization in the Arab Countries
Mehmet Tosun, University of Nevada, Reno

The Arab region has one of the most centralized government structures in the world. This paper provides an overview of the centralization and decentralization in the region starting with a historical overview and then describing in some detail the administrative and fiscal decentralization which is followed by an empirical analysis of the determinants of decentralization in the Arab region. The empirical analysis also uses a new decentralization indicator constructed by the author based on expenditure assignment scores. The paper also provides specific country descriptions for selected countries and recent developments in the countries that are experiencing the Arab Spring. The study uses data from the World Bank’s Database of Political Institutions (DPI), World Development Indicators (WDI) and the International Country Risk Guide (ICRG). Empirical results from ordered logistic regressions show that decentralization is positively associated with GDP per capita but high-income Arab countries are still significantly less decentralized compared to other countries. Among the institutional variables both internal and external conflicts are found to be robust determinants of decentralization. While external conflicts are negatively associated with decentralization, internal conflicts give mixed results. Over time prevalence of internal conflicts may have brought more decentralization to the region but Arab countries still have lower decentralization possibly due to significantly higher internal conflicts compared to other countries.

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