Political Economy of Arab Uprisings

Abstract

This article frames the political economy of the 2011 Arab uprisings as a failure of the Arab development model, especially its inability to support an independent and competitive private sector. Based on a distorted legacy of intervention and distribution, this development model is structurally incapable of reconciling aspirations with economic opportunities. The contradictions associated with this development model are particularly apparent in the region’s labour-abundant economies, where a shrinking resource envelope has led to an erosion of the social contract, resulting in a scaling back of public employment and welfare services. Worryingly, the space vacated by a shrinking state has not been filled by a vibrant private sector. This article analyses the crisis of the Arab state through the lens of an under-developed private sector. In much of the Arab world the private sector acts as an appendage of the state. Businesses tend to survive either when they are too close to the state, such as crony capitalists, or too far, which is the case with informal firms. While private sector development remains an important imperative, it is not simply a function of technocratic policy reform. Relieving greater competitive space for the private sector requires a political concession that grants autonomy to independent businesses and relaxes barriers to regional trade. I argue that an independent merchant class is difficult to visualise without connected regional markets.