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The economics of the Arab Spring

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  • Adeel Malik
  • Bassem Awadallah
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    Abstract

    This article explores the economic underpinnings of the Arab spring. We locate the roots of the regiosn's long-term economic failure in a statist model of development that is financed through external windfalls and rests on inefficient forms of intervention and redistribution. We argue that the rising cost of repression and redistribution is calling into question the long-term sustainability of this development model. A singular failure of tyhe Arab world is that it has been unable to develop a private sector that is independent, competetive and intergrated with global markets. We argue that developing such a orivate sector is both a political as well as a regional challenge. In so far as the private sector genertaes incomes that are independent of the rent streams controlled by the state and can pose a direct political challenge, it is viewed as a threat. And, the Arab world's economic fragmentation into isolated geographic units further undermines the prospects for private sector development. We explain this economic fragmentation as a manifestation of dentralized and segmented administrative structures. Revisiting the polictics and geo-politics of regional trade, we argue that overcoming regional economic barriers constitues the single most important collective action problem that the region has faced since the fall of the Ottoman Empire.

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    File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/csae-wps-2011-23.pdf
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    Bibliographic Info

    Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2011-23.

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    Date of creation: 2011
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    Handle: RePEc:csa:wpaper:2011-23

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    Keywords: Arab Spring; Fragmentation; Regional Trade; Protectionism;

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    Cited by:
    1. Baldi, Guido, 2013. "Fiscal Policy Institutions and Economic Transition in North Africa," MPRA Paper 48677, University Library of Munich, Germany.
    2. World Bank, 2012. "From Political to Economic Awakening in the Arab World : The Path of Economic Integration - Deauville Partnership Report on Trade and Foreign Direct Investment, Volume 1. Overview Report," World Bank Other Operational Studies 11886, The World Bank.
    3. M. Shahid Ebrahim & Seema Makhdoomi & Mustapha Sheikh, 2012. "The Political Economy and the Perennial Underdevelopment of the Muslim World," Working Papers 12011, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).

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