Adam Smith was not an economist. He was a moral philosopher who pioneered a young discipline in the late eighteenth century that would develop by leaps and bounds in the nineteenth: political economy. One cannot get a degree in it anymore. The University of Glasgow, Smith’s home institution, was the last to abandon the name of its corresponding department in 1998 in favor of economics. In a way, the step marked the final victory of the marginal revolution that started over a century earlier and has since reduced disciplinary biodiversity considerably. In Political Economies of the Middle East and North Africa, Robert Springborg alludes to this past tradition, when political management of the economy was regarded as a factor, if not the decisive one, in resource allocation, and political economy was a broader church than economics is today (pp. 10–11). With great eclectic dexterity, he weaves together analytical strands from political economy, new institutional economics, and historical sociology to explain why the Middle East and North Africa (MENA) region has remained behind its development potential, and why its social contract is fundamentally broken. In most countries, a “30/30 rule” roughly applies: 30 percent youth unemployment and a 30 percent poverty rate (pp.1–2).
This book wants to be a textbook that offers complementary analytical angles to existing classics like A Political Economy of the Middle East by Alan Richards and John Waterbury, revised and amended by Melani Cammett and Ishaq Diwan in a fourth edition, published in 2015. Central for Springborg is the role of the state and its capacity to guide economic development. He advances two basic propositions: path dependency exercises considerable gravity over development options, and limited-access orders of the region have not served their citizens well. The latter he regards as the “root cause” of the region’s malaise, as it won’t allow its states “to interact effectively with civil society in the formation and implementation of policies” (p. 6). He dedicates the whole of Chapter 4 to this point, arguing that “limited-access orders not only militate against economic growth; by encouraging clientelism and discouraging citizenship they also reinforce authoritarian government and material inequality” (p. 64).
Path dependency is conditioned by prior sociopolitical formations and resource endowments. This explains the great emphasis Springborg puts on historical analysis, whose relative absence he identifies as a weakness of institutional economics from which he otherwise borrows extensively. Traditions of state formation that preceded the deleterious impact of colonialism gave countries such as Egypt, Iran, Turkey, Tunisia and Morocco a relative head start in terms of state capacity and effectiveness. These states also show more resilience against state fragmentation today compared to more recently formed states and “artificial” political entities. The dialectic relationships between colonization and the resistance of local elites shaped outcomes in postcolonial times. “Neither militaries nor monarchs have developed state capacities as effectively as have civilian political leaders, such as those in Tunisia, Turkey, Israel, and, to a lesser extent, Iran,” Springborg points out (p. 5). Then, when globalization ushered in a “post-post-colonial” phase in the 1980s, MENA was unable to reap benefits similar to emerging markets in Asia — mainly as a result of clientelism and a limited capacity to extract resources from society due to excessive reliance on oil rents. Globalization and its ideological tropes like the Washington Consensus are often denounced as neocolonial false-flag operations in MENA. Yet, the region has crucially depended on globalization. It has underwritten demand for its hydrocarbon exports and shaped the region’s economic diversification options. When it flagged in the wake of the Great Recession, it wreaked socioeconomic havoc that was a contributing factor to the Arab Spring, Springborg argues.
The first three chapters offer a review of the literature on state building and development in MENA, an analysis of its precolonial legacies of state formation and the transition from colonialism to postcolonial regimes that was followed by the impact of globalization. Building on the longue durée perspectives of Charles Issawi, Timur Kuran and others, Springborg posits the central importance of institutions and resource endowments (all limited except for livestock and hydrocarbons, and the latter would only make a decisive developmental impact after World War II). Following the work of Carl Brown, he also points to the crucial role of “mutual inter-state penetration” and economic, political and military interference by external actors (pp. 16-19).
In Chapter 4, he introduces limited-access orders as an analytical category. He identifies it as the main reason for limited development of “infrastructural power,” which Michael Mann has described as the ability to rule society and extract resources from it rather than relying on rent income. A peculiar feature of the region’s limited-access orders is the existence of deep states, which he defines as being “incentivized to provide bad governance and to do so as secretly as possible” (p. 72). Relying on networks in the military and security services, they have limited political and economic inclusiveness. Chapter 5 analyzes variations of such deep states within the region. It differentiates them according to their relationship with other actors in the national political economy, the social composition of its members, and the types and magnitude of resources they rely upon.
Chapter 6 demonstrates the lack of political and economic inclusiveness with the help of statistical indices, such as the Government Closeness Index and the Global Indicators of Regulatory Governance of the World Bank. It paints a picture of excessively centralized and inefficient bureaucracies with limited representation that fail to deliver public goods such as education and health care. The lack of input legitimacy points to the importance of despotic power and the deep states’ capacity for repression, but also to their need to provide a modicum of material benefits such as public-sector jobs, subsidies and transfer payments to ensure a degree of output legitimacy. Both require financial resources. “The most critical of state capacities is the ability to generate revenue, without which a state cannot function” (p. 112), Springborg writes in Chapter 7. He outlines the state’s limited capacity to raise taxes and the heavy reliance on oil rents, directly in those countries that are oil exporters and indirectly in countries that rely on the regional recycling of oil rents via strategic-transfer payments, investments, and remittances of migrant labor. He also points to lacking fiscal management, ranging from a steady rise of recurrent expenditures at the expense of capital investments to the crony capture of bank credit, the growing role of the informal sector and regulatory shortfalls in financial markets.
Chapter 8 on “regionalization without regionalism” is particularly noteworthy. It deals with peculiarities that emanate from mutual interpenetration of relatively weak states. Unable to control pockets of local autonomy, they are vulnerable to influence mongering by external actors, resulting in the paradoxical situation that the MENA region “leads the world in regionalization, but trails it in regionalism. Its people … interact across national borders socially and politically more than those of other developing regions” (p. 134). When asked about their primary identity, more than half of MENA inhabitants choose a supranational (Muslim, Christian, Arab) or subnational (e.g., tribe or extended family) category, according to the Arab Barometer. Informal regional integration via ideologies, satellite networks and social media goes hand in hand with weak regional organization and limited formal integration. Cross-border interaction is hampered by trade barriers and economic structures that offer limited complementarities as they rely heavily on exports of hydrocarbons. Ties that bind such as intraregional tourism, migration and investments have declined over the past decade and have reduced regionalization. The combination of declining regional interactions, weak institutions and the aggressive reactions of weak nation states that operate in an environment of profound insecurity contributes to a proliferation of conflict. The result is a “MENA civil war” where “political vacuums in ungoverned spaces” lead to a proliferation of the Lebanese “model” of contested sovereignty (pp.141–42).
The book concludes with two chapters that analyze the survival strategies of weaker and stronger MENA states, respectively. Throughout the book, Springborg points to the diversity of MENA states and the need to differentiate between them. It is no coincidence that the book’s title carries the plural of “political economy.” Springborg identifies five categories: failed states (Libya, Yemen, Syria), fragile states (Sudan, Iraq, Lebanon), authoritarian republics (Algeria, Egypt, Iran, Turkey), monarchies (the Gulf countries, Jordan, Morocco) and the outliers (Israel, Tunisia). The differentiation of authoritarian republics into “bunker states” and “bully praetorian states” that he and Clement M. Henry used in their earlier book on Globalization and the Politics of Development in the Middle East (2010, second edition) does not appear in this new one. Presumably the Arab Spring and the growth of state fragility have called for a reappraisal.
The survival strategies of the weaker (failed and fragile) states focus on maintaining bare order and security by “promoting state capture and clientelism under the authority of contending elites unable to agree on coherent government policies” (pp. 216–17). The authoritarian republics have prioritized repression in the face of civil protests. The monarchies have increased repression as well but have also launched economic diversification campaigns. However, their various “vision” documents “have been concocted by Western management consulting firms with no input from local citizens” (p. 217). A regionwide transformation from limited-access to open-access orders that would be a precondition for more stable socio-economic development is unlikely. Only in Tunisia’s brittle young democracy does this remain a distinct possibility, even though the country struggles with an economic crisis and remnants of the deep state of the Ben Ali regime. Theoretically, Israel’s transformation “from a limited access order — dominated by ‘insider’ Labor Zionism prior to 1977 — to a competitive, open access order” could be taken as an example of growth-stimulating policies, if it weren’t for the subordination of the Palestinians. This also prevents Israel’s economic integration into the wider region, which would help the country to leverage its technological leadership (p. 210). Springborg also cautions that Israel shows some of the collateral damage of other neoliberal success stories, such as declining public investment, deteriorating infrastructure and high inequality (Israel has the highest level of poverty among the OECD states).
Implicitly, if not explicitly, the book points to two important areas of future research; resource allocation and rebel governance in areas of limited statehood. Countries where national economies have ceased to exist still have a political economy, and comparative area-studies approaches are important. This applies to the intraregional comparisons that Springborg undertakes but could also include more detailed cross-regional analyses that compare development outcomes in MENA with those of more successful emerging markets in Asia and other parts of the world.
Robert Springborg describes his book as an “old-fashioned political economy” (p. vii). If that sounds somewhat apologetic, it shouldn’t. He has pointed to the need for interdisciplinary approaches to the sociopolitical realities of MENA today, without disciplinary and ideological blinders. This is timely, as renewed protests have erupted in Algeria, Sudan, Iraq and Lebanon. They have shown in no uncertain terms that politics explains economic outcomes and socioeconomic grievances in turn inform politics. The book is rich in analysis, data and anecdotes. It reviews essential literature in the field and draws on a lifetime of scholarship on the MENA region, making it essential reading for students of the region, but also for politicians, executives and business travelers.