Why “underdevelopment” in the Middle East? The strengths and limitations of oil, Islam, corruption and other hypotheses Prof. M. Cammett POLS1270 April 5, 2012
From Ottoman-Era Glory to Relative Decline in the Middle East
Proximate Causes Weak integration in the global economy Low private investment Lack of technological development Industrial non-competitiveness High costs of doing business Poor educational systems, underdeveloped human capital
Deeper Causes: Competing Explanations Oil and the “Resource Curse” Islam, Islamic institutions Colonialism Corruption and Crony Capitalism Authoritarianism
Oil and the “Resource Curse” Resource wealth poor economic outcomes – “Dutch Disease” – Rentier states and non- productive economies
The Resource Curse: Critiques Variation in oil-rich countries (Norway v. UAE v. Indonesia v. Algeria) Timing of institution building vis-à-vis influx of windfall profits Hertog: Populism and state autonomy Is oil wealth convincing?
Islam v. Islamic Institutions Islam as a religion Islamic institutions (not Islam per se) Islamic waqfs, corporate forms, inheritance laws disperse wealth inhibit investment
Do Islamic institutions explain underdevelopment in the MENA? Direction of causation? De factp choice/flexibility in corporate forms Ottoman policies, not Islamic institutions? Colonial and post-colonial policies Variable trajectories within the Islamic world Trajectories in the Middle East v. non-Muslim regions of the Global South?
Colonialism
Colonial Governance in the MENA Capitulations Colonial domination of productive, lucrative activities Minimal investment in public welfare & infrastructure Limited indigenous control over economy, policies Legacies for state-building Limitations of “blaming” colonial rulers?
Corruption & Crony Capitalism The logic of the argument: Why corruption is bad for development Is the MENA especially corrupt? Is corruption bad for development?
Corruption and Other Aspects of Governance in Cross-National Perspective (2008)
Authoritarianism and Underdevelopment in the MENA MENA exceptionalism: “Voice & Accountability” Logic : How might authoritarianism hinder development? Campaign posters for Gamal Mubarak Egypt, Sept. 2010
Authoritarianism & Underdevelopment? Mixed Evidence: – East Asia – Latin America – Russia, etc. Regime type v. governance
Towards an Explanation... Historical legacies + Post-independence policies