Corruption in the MENA Region: Beyond Uprisings [1st ed.] 9783030553135, 9783030553142

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POLITICAL CORRUPTION AND GOVERNANCE Series Editors: Dan Hough · Paul M. Heywood

Corruption in the MENA Region Beyond Uprisings Dina Elsayed

Political Corruption and Governance

Series Editors Dan Hough University of Sussex Brighton, UK Paul M. Heywood University of Nottingham Nottingham, UK

This series aims to analyse the nature and scope of, as well as possible remedies for, political corruption. The rise to prominence over the last 20 years of corruption-related problems and of the ‘good governance’ agenda as the principal means to tackle them has led to the development of a plethora of (national and international) policy proposals, international agreements and anti-corruption programmes and initiatives. National governments, international organisations and NGOs all now claim to take very seriously the need to tackle issues of corruption. It is thus unsurprising that over couple of decades, a significant body of work with a wide and varied focus has been published in academic journals and in international discussion papers. This series seeks to provide a forum through which to address this growing body of literature. It invites not just in-depth single country analyses of corruption and attempts to combat it, but also comparative studies that explore the experiences of different states (or regions) in dealing with different types of corruption. We also invite monographs that take an overtly thematic focus, analysing trends and developments in one type of corruption across either time or space, as well as theoretically informed analysis of discrete events.

More information about this series at http://www.palgrave.com/gp/series/14545

Dina Elsayed

Corruption in the MENA Region Beyond Uprisings

Dina Elsayed Cairo, Egypt

Political Corruption and Governance ISBN 978-3-030-55313-5 ISBN 978-3-030-55314-2 (eBook) https://doi.org/10.1007/978-3-030-55314-2 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Parkpoom Yeesoontes/EyeEm/Getty Images This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

To future Arab generations, May your voices be heard, May your rights be respected, May You live in better governed societies, May you enjoy a better quality of life, May you witness spring …

Preface

In the context of the growing political and academic attention given to the MENA region in the aftermath of the Arab Uprisings, this book seeks to explore a key dimension of such political upheavals: corruption. There is a general consensus that grand and petty corruption are widespread among countries in the region, and corruption has been a key driver behind the Arab Spring. Against this backdrop, this book seeks to fill the academic gap in corruption studies in the MENA region by looking at the root causes of corruption in fifteen Arab countries. The number of studies on the nature and extent of corruption in MENA countries is limited due to the lack of reliable data on corruption-related issues within these countries, as well as widespread restrictions on accessing corruption-related information. Contributing to the literature on corruption in MENA countries, this book addresses the causes of corruption in the region through a systematic cross-national comparative analysis. In particular, fifteen countries are analyzed in detail using the structured focused comparative method and the Most Similar Systems Design in order to better comprehend the distinctive causes of corruption in these countries, and also to explain the causal relationship between corruption and differences in political and socio-economic dimensions within these countries over a timeframe of 1999–2010. The countries are divided into three sub-regions (Gulf region, North Africa, and Mashreq plus Yemen) to enable focused analysis and comparison within these groups.

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The book concludes that the main variables that showed robustness in impacting the intensity of corruption among all the cases are the rule of law, quality of regulation, and trade openness. Poverty rates and income inequality have been clear triggers for petty corruption to flourish in many cases. However, natural resource endowments have shown less impact on the levels of corruption in the countries analyzed. While women’s empowerment has not been found to be a strong indicator, discrimination in general against women, minorities, religious sects, indigenous groups, immigrants, non-nationals, opposition parties, and other groups has revealed a clear absence of social equality among those populations where favoritism and polarization have taken place. The book further concludes that the relationship between literacy rates and corruption is negligible, but that there is a negative causal relationship between the quality of education and corruption. Finally, there is also a negative correlation between human development and corruption. Cairo, Egypt

Dina Elsayed

Acknowledgments

To the most interesting, extraordinary, yet exhausting years. To the experience I have encountered with every new step I took, putting the pieces of knowledge together to help me reach a clear picture of this puzzle. To the constant sincere support of Professor Dr. Nicolai Dose, with whom I managed to book a space in his busy schedule. I acknowledge that it has been a significant enriching phase in my life because of his patient guidance and encouragement. To Professor Dr. Tobias Debiel, who added constructive input and invaluable feedback to enhance my work. To the experts from each country in the MENA region, who gave me so much of their time, knowledge, experience, and objective perspectives in discussing critical topics. To their willingness to help in all possible ways, to their openness, humbleness and follow-up. To that giving caring loving soul who witnessed it all, who gave me her hand all along the way, who always believed in me and kept pushing me forward, and without whom I would not have reached many places. I am so grateful that she happened to be my mother. To the generous hand who relentlessly supported me. Thank you, my father, for tolerating all my ups and downs, for being patient and understanding.

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To my siblings, Khaled, Mohamed, Nancy, Sherine, and Maha. I could not be any luckier, having you all. I believe I can conquer anything knowing I have a family supporting me every step of the way. To my godparents, Mama Nawal El Degwi and Professor Dr. AbdulMonem Al-Mashat, who have been inspiring role models, and who always pushed me to achieve more and aim higher. Thank you for always encouraging me whenever my journey gets tough. To those who made me believe that friends are the family we choose to belong to. Your support has been irreplaceable throughout this phase. I am thankful to have you. This book would not have been accomplished without you all. For this, I am grateful.

Contents

1

Introduction References

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Definition of Concepts 1 What Is Corruption? 1.1 Corruption Defined Through Public Interest, Public Opinion, and Public Office 1.2 Corruption Defined Through the Principal–Agent Framework 1.3 Corruption as Abuse of Public Office References

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Literature Review 1 Causes of Corruption 1.1 Regime Characteristics 1.2 Role of Government in the Economy 1.3 Development and Society 2 The Analytical Framework 3 Hypotheses of the Study 4 Concluding Remarks References

10 12 14 18 23 27 27 31 33 36 37 38 38

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Research Design, Methodology, and Data Collection 1 Case-Study Method 2 Structured Focused Comparison Method 3 The Most Similar Systems Design 4 Data Collection 5 Concluding Remarks References

49 50 51 53 54 57 58

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The MENA Region: Unique Features and Sustained Regimes 1 Regime Characteristics 2 Role of Government in the Economy 3 Development and Society References

61 64 66 68 72

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Corruption in the Gulf Region: A Black Box 1 Qatar 1.1 Regime Characteristics 1.2 Economic Status 1.3 Development Status 2 United Arab Emirates (UAE) 2.1 Regime Characteristics 2.2 Economic Status 2.3 Development Status 3 Oman 3.1 Regime Characteristics 3.2 Economic Status 3.3 Development Status 4 Bahrain 4.1 Regime Characteristics 4.2 Economic Status 4.3 Development Status 5 Kuwait 5.1 Regime Characteristics 5.2 Economic Status 5.3 Development Status 6 The Kingdom of Saudi Arabia (KSA) 6.1 Regime Characteristics

77 80 80 85 89 93 93 99 102 106 106 111 113 117 117 123 126 129 129 133 137 139 139

CONTENTS

6.2 Economic Status 6.3 Development Status 7 Causes of Corruption in the Gulf Region: A Cross-National Comparative Analysis References 7

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144 145 149 157

Corruption in North Africa: Monopoly of Power and Widespread Ignorance 1 Tunisia 1.1 Regime Characteristics 1.2 Economic Status 1.3 Development Status 2 Morocco 2.1 Regime Characteristics 2.2 Economic Status 2.3 Development Status 3 Egypt 3.1 Regime Characteristics 3.2 Economic Status 3.3 Development Status 4 Algeria 4.1 Regime Characteristics 4.2 Economic Status 4.3 Development Status 5 Libya 5.1 Regime Characteristics 5.2 Economic Status 5.3 Development Status 6 Causes of Corruption in North Africa: A Cross-National Comparative Analysis References

220 227

Corruption in the Mashreq Region Plus Yemen: A Region in Turmoil 1 Jordan 1.1 Regime Characteristics 1.2 Economic Status 1.3 Development Status

235 237 237 243 245

165 168 168 174 177 181 181 185 188 191 191 194 198 201 201 204 207 211 211 215 218

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Lebanon 2.1 Regime Characteristics 2.2 Economic Status 2.3 Development Status 3 Syria 3.1 Regime Characteristics 3.2 Economic Status 3.3 Development Status 4 Yemen 4.1 Regime Characteristics 4.2 Economic Status 4.3 Development Status 5 Causes of Corruption in the Mashreq Region Plus Yemen: A Cross-National Comparative Analysis References

248 248 251 255 258 258 263 266 269 269 274 277 280 287

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Corruption in the MENA Region: What are the Roots? 1 Comparing Across Each Hypothesis 1.1 Regime Characteristics 1.2 Economic Status 1.3 Development Status 2 Comparing Across the Ten Hypotheses 3 What Are the Exclusive Causes of Corruption? References

291 291 292 295 298 302 305 307

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Conclusion: Is There a Way Out?

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Annexes

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Index

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Abbreviations

CPI DCR EU FDI FIS FNL GCC GDP GNI HDI IAF ILO IMF KSA MENA NA NDP NGO OECD SMEs TI UAE UN UNDP V-Dem WEF WTO

Corruption Perception Index Democratic Constitutional Rally Party (Tunisia) European Union Foreign Direct Investment Front Islamic du Salut Party (Algeria) Front de Libération Nationale Party (Algeria) Gulf Cooperation Council Gross Domestic Product Gross National Income Human Development Index Islamic Action Front Party (Jordan) International Labor Organization International Monetary Fund Kingdom of Saudi Arabia Middle East and North Africa No Available Data National Democratic Party in Egypt Non-Governmental Organization Organization of Economic Cooperation and Development Small and Medium Enterprises Transparency International United Arab Emirates United Nations United Nations Development Programme Varieties of Democracy Project World Economic Forum World Trade Organization

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List of Figures

Chapter 5 Fig. 1

Map of the MENA region

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Chapter 6 Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig.

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Map of the Gulf region Regime characteristics in Qatar Economic status in Qatar Regime characteristics in UAE Economic status in UAE Regime characteristics in Oman Economic status in Oman Regime characteristics in Bahrain Economic status in Bahrain Regime characteristics in Kuwait Economic status in Kuwait Regime characteristics in KSA Economic status in KSA

78 83 88 98 101 110 114 122 125 134 136 143 146

Chapter 7 Fig. Fig. Fig. Fig.

1 2 3 4

Map of North Africa Regime Characteristics in Tunisia Economic Status in Tunisia Regime Characteristics in Morocco

166 173 176 184

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LIST OF FIGURES

5 6 7 8 9 10 11

Economic Status in Morocco Regime Characteristics in Egypt Economic Status in Egypt Regime Characteristics in Algeria Economic Status in Algeria Regime Characteristics in Libya Economic Status in Libya

187 195 197 205 208 214 217

Chapter 8 Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig.

1 2 3 4 5 6 7 8 9

Map of the Mashreq Region & Yemen Regime characteristics in Jordan Economic status in Jordan Regime characteristics in Lebanon Economic status in Lebanon Regime characteristics in Syria Economic status in Syria Regime characteristics in Yemen Economic status in Yemen

236 242 244 252 254 262 265 273 276

CHAPTER 1

Introduction

Corruption is a worldwide phenomenon; no country is entirely clean and immune from it. It penetrates societies at all levels, causing the malfunctioning of their political and economic institutions (Glynn et al. 1997; Amundsen 1999). It is a complex phenomenon that persists as a global problem, attracting the attention of policymakers, political scientists, and economists. Efforts continue on the political as well as the academic level to address corruption and its intermingled dimensions: causes, effects, implications, and means of curbing it. During the last decade, international organizations have placed tackling corruption at the top of their agendas and action plans. In December 2003, the United Nations adopted the UN Convention Against Corruption. This marked a clear step within the development cooperation realm towards fighting corruption internationally. Initiatives were adopted on regional and national levels to restrain corruption through good governance strategies, the enforcement of laws, establishing national entities to fight corruption, and raising awareness of its implications. Moreover, it has become an integral component of donor assistance agendas. Development aid is now tied in with accountability and transparency measures, which falls under the umbrella of advancing good governance practices in recipient countries. Consequently, much attention has been paid worldwide to improving the functioning of institutions and political systems. The World Bank © The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_1

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views corruption as a significant obstacle to economic and social development because it undermines the capacities of systems to function effectively (World Bank 1997). Transparency International considers corruption one of the “greatest challenges” of this era, since it “undermines good government, fundamentally distorts public policy, leads to misallocation of resources, harms the private sector and private sector development and particularly hurts the poor” (Commonwealth Secretariat 2001: 55). Nevertheless, so far, the effectiveness of international institutions’ efforts in this area remains ambiguous on diverse levels (McCusker 2006; Richter and Burke 2007; Nadgrodkiewicz et al. 2012; Pech and Debiel 2011; Sumpf 2015). An overview of academic research on corruption indicates that studies have attempted to define the concept, determine its causes and effects, and analyze its diverse motives and dimensions using several methods, designs, and frameworks. Empirical studies on corruption have noticeably increased in number during the last decade, reflecting the greater concern caused by the alarming figures. Those empirical efforts have offered various insights which in turn have triggered further research and analysis. In addition, much of the research has undertaken crossnational analysis to offer a wider scope and deeper explanation of the phenomenon. In spite of extensive research efforts on the subject of corruption, less widespread consensus has been reached regarding its different dimensions. This is primarily due to the difficulty of measuring a complex phenomenon like corruption where adequate data is lacking (Bardhan 1997; Ades and Di Tella 1997; Tanzi 1998; Lambsdorff 1999; Jain 2001; Aidt 2003; Serra 2006). Based on that, the relevance of this book stems from both political perspectives and academic reasoning. First, the 2011 Arab Uprisings, which brought down some regimes in the MENA region, indicated the geostrategic importance of this region, as well as the importance of analyzing its countries with regard to corruption, which stood out as one of the main reasons for the Arab Uprisings. Second, while the MENA region has been a subject of research in literature, it is under-represented in studies of corruption. The topic is generally studied in relation to broader issues like enhancing democratic practices, promoting notions of good governance, and the impact of corruption on human development and economic growth in the region. These issues have mainly been addressed by international organizations (such as the World Bank and the United Nations) through the lens of enhancing good governance and

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transparency in the region, without an in-depth analysis of the distinct features of corruption within its countries.1 The lack of political will within the MENA region countries to tackle such a sensitive topic and the lack of data on its leading causes present another obstacle to the planning of appropriate strategies to curb it. This book aims to fill this gap and contribute to the literature on corruption. More specifically, it seeks to analyze the causes of corruption in this distinctive region, presenting another level of knowledge stemming from its culture and history. A study of the causes of corruption in these countries requires consideration of the exclusive features—their distinct political and socio-economic conditions, oil richness in some cases, and their cultural uniqueness—which are variously reflected in how their systems function. Third, since the countries of focus vary in their levels of corruption, this book intends to study the causes of corruption through an analytical comparative perspective, which offers a deeper level of understanding for each country, as well as to compare them cross-nationally. The ability to speak the mother language of this region—Arabic—and awareness of its circumstances and culture offers the author an extraordinary opportunity to comprehend the different dimensions of the phenomenon in these countries, to analyze corruption within its proper context, and to correctly reflect on it based on her academic study, experience, and cultural knowledge. This book has been developed in an attempt to answer the question: • What are the causes of corruption in the MENA region countries? Sub-questions developed during the course of answering this central question include, but are not limited to: • What are the main variables causing corruption in each country? • Which variables are evident among all the selected countries under study? • What are the exclusive causes of corruption among each sub-group within the MENA region?

1 This is elaborated upon in Chapter 5 which tackles the general features of the MENA region.

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• Which variables have less of an impact on the levels of corruption in the MENA countries? • Which variables turn out to be irrelevant in the study of the causes of corruption? To answer the main question, this book employs the case study research method, conducting an in-depth analysis of the causes of corruption in fifteen Arab countries in the MENA region. These countries are Algeria, Bahrain, Egypt, Jordan, Kingdom of Saudi Arabia (KSA), Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Syria, Tunisia, United Arab Emirates (UAE), and Yemen. In order to address the sub-questions, the book follows the structured, focused comparison method and employs the Most Similar Systems Design to conduct a cross-national comparative analysis across all the countries. Regarding the scope and period of study, this book focuses mainly on public office corruption in the MENA region countries. Private corruption is beyond the book’s scope.2 The timeframe of the study is from 1999 until 2010. The year 1999 represents, in most cases, a continuation in power of either the same leader or a successor sharing the same ideology. Furthermore, the intention is to study the phenomenon of corruption before the 2011 Arab Uprisings, in order to have a consistent analysis. The Arab Spring countries (Tunisia, Egypt, Libya, and Syria) have witnessed drastic changes since 2011 and are still in transition, experiencing unsteady paths towards democracy, which in turn will hinder coherent analysis of the countries under study. The book is divided into ten chapters. Following a general outline of the topic in Chapter 1, chapter 2 defines corruption, highlighting its various classifications and types, and concluding with a working definition. Chapter 3 reviews the literature on corruption, focusing on work addressing its causes, which presents a blueprint for developing the analytical framework and the hypotheses of the book. Chapter 4 outlines the methodology, with a specific focus on the structured, focused comparison method, the method of difference, and the Most Similar Systems Design, as well as the case-study research method. The chapter then

2 Private corruption generally occurs when those in charge misuse their office—an organizational position in a private firm—for personal benefit.

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explains the data collection process used. Chapter 5 defines the boundaries of the MENA region and explains the specific range of countries under study, highlighting their broad common political, economic, and societal features. Chapters 6, 7, and 8 focus on the causes of corruption in the MENA region, initially giving a general overview of each sub-regional group (Gulf countries, North African countries, and Mashreq countries plus Yemen). This is followed by an in-depth longitudinal analysis of the causes of corruption in the fifteen countries across the three sub-regions during the period of study (1999–2010). Thus, chapter 6 addresses the causes of corruption in the Gulf countries (Qatar, UAE, Oman, Bahrain, Kuwait, and KSA) and conducts a cross-country comparison among the six cases along with some concluding remarks. Chapter 7 looks at the causes of corruption in North Africa, shedding light on features common to the countries in the region. It then analyzes the five countries within the region (Tunisia, Morocco, Egypt, Algeria, and Libya), compares the causes of corruption across the five cases, and presents some concluding observations. Chapter 8 analyzes the causes of corruption in the Mashreq region (Jordan, Lebanon, and Syria) plus Yemen, compares the causes of corruption cross-nationally, and concludes with some remarks on this group of countries. Chapter 9 conducts a cross-country comparison across the fifteen countries under study by addressing each hypothesis, then grouping all the hypotheses, in order to arrive at the causes of corruption in the MENA region, as well as highlighting exclusive causes of corruption in some of its countries. Chapter 10 emphasizes the most important findings of the study, compares the causes of corruption in the three sub-regions, along with the author’s insights on the issue of corruption within the MENA region, and suggests future perspectives for research on corruption.

References Ades, A., & Di Tella, R. (1997). The New Economics of Corruption: A Survey and Some New Results. Political Studies, 45(3), 496–515. Aidt, T. S. (2003). Economic Analysis of Corruption: A Survey. The Economic Journal, 113(491), F632–F652. Amundsen, I. (1999). Political Corruption: An Introduction to the Issues (Working Paper. 99(7)). Bergen: Chr. Michelsen Institute. Bardhan, P. (1997). Corruption and Development: A Review of Issues. Journal of Economic Literature, 35(3), 1320–1346.

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Commonwealth Secretariat. (2001). 1999 Meeting of Commonwealth Law Ministers and Senior Officials: Port of Spain, Trinidad and Tobago, 3–7 May 1999: Memoranda (Vol. 1). Commonwealth Secretariat. Glynn, P., Kobrin, S. J., & Naím, M. (1997). The Globalization of Corruption. In K. A. Elliott (Ed.), Corruption and the Global Economy (pp. 7–27). Washington, DC: Institute for International Economics. Jain, A. K. (2001). Corruption: A Review. Journal of Economic Surveys, 15(1), 71–121. Lambsdorff, J. G. (1999). The Transparency International Corruption Perceptions Index 1999: Framework Document. Berlin: Transparency International. McCusker, R. (2006). Review of Anti-Corruption Strategies. Canberra: Australian Institute of Criminology. Nadgrodkiewicz, A, Nakagaki, M., & Tomicic, M. (2012). Improving Public Governance: Closing the Implementation Gap Between Law and Practice. Center for International Private Enterprise. Washington, DC: Global Integrity. Pech, B., & Debiel, T. (2011). Corruption as an Obstacle to Development? Taking Stock of Research Findings and the Effectiveness of Policy Strategies. In UNIKATE 40. Social Sciences - Comparative, International, Transnational (pp. 16–25). Essen: University of Duisburg-Essen. Richter, W. L., & Burke, F. (Eds). (2007). Combating Corruption, Encouraging Ethics: A Practical Guide to Management Ethics. Lanham, MD: Rowman & Littlefield. Serra, D. (2006). Empirical Determinants of Corruption: A Sensitivity Analysis. Public Choice, 126, 225–256. Sumpf, D. (2015). Working Paper on Governance: Envisaging the Future in the Arab Region. United Nations Working Paper. Tanzi, V. (1998). Corruption Around the World: Causes, Consequences, Scope, and Cures. Staff Papers-International Monetary Fund, 559–594. World Bank. (1997). Helping Countries Combat Corruption: The Role of the World Bank. The World Bank. http://www1.worldbank.org/publicsector/ant icorrupt/corruptn/corrptn.pdf. Accessed April 6, 2020.

Further Reading Debiel, T., & Gawrich, A. (Eds.). (2013). (Dys-) Functionalities of Corruption: Comparative Perspectives and Methodological Pluralism. Comparative Governance and Politics. Special Issue 3. Springer. DeLeon, P. (1993). Thinking About Political Corruption. Armonk, NY: ME Sharpe.

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Seldadyo, H., & Haan, J. (2005). The Determinants of Corruption. Paper Prepared for the 2006 EPCS Conference. http://conferences.wcfia.harvard. edu/sites/projects.iq.harvard.edu/files/gov2126/files/seldadyo_determina nts_corruption.pdf. Accessed April 6, 2020.

CHAPTER 2

Definition of Concepts

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What Is Corruption?

At first glance, corruption seems to be a simple, easily understandable phenomenon. However, as a persistent worldwide phenomenon found in all countries to varying degrees, it is in fact a complex one that needs a clear understanding of its characteristics, dimensions, and impact. Various approaches and perspectives have sought to define the concept, leading to much controversy, especially since it is associated with both societies and individual actions. Nowadays, corruption is gaining much academic attention and is subject to increased scrutiny as efforts are made to curb it and create better systems of government around the world. While many social science approaches have sought to define corruption, it remains difficult to reach a common definition of the term and arrive at reliable concrete measures of the phenomenon. Furthermore, consideration of corruption is intermingled with other concepts like governance, transparency, and accountability in today’s vocabulary (Rose-Ackerman 1997b; Lancaster and Montinola 2001; Kaufmann et al. 2005). This chapter sheds light on the range of literature defining the concept and concludes with the definition used in this book.

© The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_2

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Corruption Defined Through Public Interest, Public Opinion, and Public Office

Among the researchers who have worked on the concept and its historical roots is Heidenheimer (1989), who views corruption through a broad lens as depraved and unprincipled behavior. His definition involved the three concepts of public opinion, public office, and public interest, but his approach was later heavily criticized. The public opinion definition stands for what the public views as corrupt—presenting a subjective approach—which creates confusion even about what the ‘public’ is (Heidenheimer 1989). Scott (1972: 3–4) is considered one of the most prominent writers to offer insights on corruption. He also gave a public opinion definition of corruption, in which the ‘public’ determines its dimensions. Scott’s definition, likewise, is subjective, and fails to offer any capacity to operationalize it. Still, this approach of defining corruption finds relevance in certain fields such as public policy (i.e., when drafting national anti-corruption strategies), offering a blueprint to curtail the phenomenon. It also assists in looking into the norms and values within different contexts and cultures to gain a broader understanding of what corruption means in different societies. Heidenheimer (1989) based the public interest definition of corruption on the commonly accepted norms of what comprises a public good. In other words, if a public official’s act stands against the public interest, it is considered unethical. Along the same lines, Friedrich (1966: 74) contended that one can look at an act and classify it as corrupt according to the public interest—meaning that if a public official is regarded as acquiring something beyond his capacities and legal assignments, then this counts as corrupt conduct. Even though the public interest offers a more objective approach to defining corruption, it fails to be operational. This also applies to the public opinion definition, due to the difficulty of reaching a consensus on public ‘opinion’ and public ‘interest’. The public office definition of corruption describes the phenomenon more objectively. According to this approach, Heidenheimer (1989) defines corruption as the violation of the official regulations of a formal office. Likewise, Nye’s (1967: 419) public office definition of corruption is acts that violate the rules and regulations of office and are carried out with the aim of pursuing private gains. Aikin (1964: 142) also views corruption as an act that disrupts the authorized power of a public office or is against its moral standards of behavior in order to gain personal

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benefits, power, or status. Morris (1991) interprets corruption generally as conduct against political norms. Lessig (2013) views corruption as a legal systematic influence that undermines the effectiveness of an institution, leading to public distrust and weakening the institution’s reputation and credibility. Khan (1996: 12) defines corruption as an act by persons in public office positions that departs from the ‘formal rules of conduct’, where this behavior is motivated by private gains being ‘wealth, power or status’. Gould (2001) views corruption as an unethical phenomenon, consisting of deviation from the moral standards in a given society, and leading to disrespect for and distrust of the authorized and constituted powers. Sandholtz and Koetzle (2000) regard corruption as conduct by a public official that is far from the commonly accepted and prevailing norms in society. Accordingly, based on the above definitions, corruption consists of a violation of the power vested in a public official, serving another person directly or indirectly. It is a two-sided phenomenon, since it takes both an agent and a client to conduct such acts for personal gain. This definition is, therefore, operational in the sense of not abiding by the rules that are established in principle. However, Bayley (1966: 721) and Scott (1972: 10–11) highlight that defining corruption in public office terms cannot be generalized as, first, it depends on the cultures of which these regulations are a part of. Second, it neglects to look at the cases in which the legislators themselves are corrupt. Third, some regulations are already unfair, in that they serve the aspirations of those who established them, so paying a bribe in those cases might not be considered unethical (RoseAckerman 1978: 9). An obvious difficulty of following these approaches, generally, is their incompatibility with empirical analysis across countries with diverse cultures (Gibbons 1989; Manzetti and Blake 1996). Discussions and debates over the definition of corruption according to these approaches have given rise to other efforts. Johnston (1996: 331) combines the public opinion and public office approaches to give a definition of corruption under the umbrella of a ‘neo-classical approach’. He defines corruption as the misuse of ‘public order’ to achieve private gain, where misuse is determined based on legal standards or societal norms, in the sense of what the society disapproves or views as unacceptable. Hence, societies differ in their definition of corrupt actions, with standards varying because cultures are dissimilar (Johnston 1996). Similarly, van den Berg and Noorderhaven (2016) argue that the approach under which corruption is defined decides how the society perceives the

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concept: it becomes either an insignificant issue that does not require decisive action or a widespread phenomenon that appears high up on policymakers’ agendas. Each of these approaches has its own drawbacks. Though public office is suitable in many instances, it fails to tackle corruption within specific contexts, such as the legislative authority. The public opinion approach lacks clarity and concrete standards, even though most comparisons in research on the intensity of corruption worldwide rely on public opinion surveys. The public interest approach falls between the public office and the public opinion approaches and is ambiguous due to being society based. In a nutshell, the above set of definitions of corruption (public opinion, public interest, and public office) have led to much deliberation on the concept and a lack of consensus on a common meaning, with the variances leading to abundant research scrutinizing the three approaches. Research efforts have tried to deal with the non-alignment of the public office or formal regulations with the public interest that is reflected in the society’s norms. Studies have sought to understand how and why this deviation happens, and which norms are associated with corruption within public office (Gibbons 1989; Morris 1991; Manzetti and Blake 1996; Kurer 2005). Nevertheless, this controversy began to diminish with the spread of globalization, notably when international organizations such as the UN and various transnational actors established general guidelines, including definitions of illegal and unethical acts. 1.2

Corruption Defined Through the Principal–Agent Framework

A well-known and widely employed definition of corruption is offered by the principal–agent model. It presents an economic approach to how corruption occurs, and is based on the rational choice of individuals, with the underlying assumption that people are driven by self-interest to act to maximize their own advantage (Olson 1971). This approach to defining corruption stands principally for those individuals that represent the process of corruption. It defines corruption as a behavior conducted through some agents who are delegated to act on behalf of some principals (Rose-Ackerman 1978; Klitgaard 1988). Based on this approach, Klitgaard (1988: 24) defines corruption as a disagreement between the public’s interest and that of the public official. Hence corruption takes place when the agent fails to act in accordance with the principal’s interest, seeking private benefit. The two essential

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perspectives, according to Klitgaard, are ‘information’ and ‘incentives’. In line with this, Klitgaard (1988) develops the principal–agent–client model, which involves three actors playing their part in the corruption process. The principals are the officials holding power who can deliver goods or services to the clients. Generally, principals have a comparative advantage as they are acquainted with the administration and are well aware of the processes, which enables them to exploit their power to act in their own interests. This takes various forms, including bribery, fraud, nepotism, extortion, or embezzlement (which are defined in the following section). Clients are the benefit givers, with these public officials sometimes employing agents to deliver the activity on their behalf. Agents might also act in their own interests and begin to abuse power entrusted to them, sustaining the vicious circle of corruption. Building on this nexus, Klitgaard’s principal–agent–client model suggests the following equation to better understand how corruption flourishes: Corruption = Monopoly + Discretion – Accountability. (Klitgaard 1988: 75)

It shows that opportunities for unethical acts are enhanced when agents impose their monopoly power on clients, accompanied by discretion and lack of accountability towards the principal. Klitgaard has given a precise explanation of corruption, viewing the problem as lying in the concentration of powers, discretion, and weak accountability. Becker and Stigler (1974) contend that the bureaucrats are sometimes the agents, and the rulers are the principals, where both have conflicting self-interests even though the agent is assigned to fulfill the interests of the principal. In a similar vein, Alam (1989: 442) argues that corruption is clearly understood within the principal–agent functional relationship. He defines it as either “the sacrifice of the principal’s interest for the agent’s” or “the violation of norms defining the agent’s behavior”. In this scenario, the government is the agent, while citizens are the principals. This can also be the case during elections when democracy is in place. To explain this situation, citizens/voters—who act as principals— face restrictions in accessing information, whereas public officials—who act as agents—have a comparative advantage in processing information that invites corruption opportunities because citizens have bounded rationality. They vote according to the limited knowledge they gain. This gives scope for politicians to be unaccountable and act unethically in many

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instances (Rose-Ackerman 1978; Banfield 1979; Persson and Tabellini 2000; Adsera et al. 2003; Besley 2006). Therefore, according to the principal–agent perspective, corruption is an individual unethical act, driven by personal gain to maximize profit and minimize costs. This approach to explaining corruption focuses on the individual incentives in which each actor is only seeking his own selfinterest. It ignores other vital dimensions of the phenomenon, such as cultural aspects, social values, and norms, and how these systems function (Elster 1989; Green and Shapiro 1994). 1.3

Corruption as Abuse of Public Office

Webster’s Dictionary defines corruption as ‘inducement (as of public officials) by means of improper considerations (as bribery) to commit a violation of duty’ (Gove 1961). The Oxford Dictionary (2000) defines the concept as a dishonest act, or illegal behavior explicitly conducted by persons in power, and it changes ‘personal behavior’ to ‘immoral standards’. McMullan (1961: 183–184) defines corruption in the sense that a public official is corrupt if he accepts money or benefits in kind for conducting an act under his assigned authority. Kubbe and Varraich (2020: 3) define corruption as the “absence of impartiality in the exercise of public power”. In broad terms, the most common and acknowledged definition of corruption is “the abuse/misuse of public office for private benefit/gain” (Sandholtz and Koetzle 2000; Sandholtz and Gray 2003; Mungiu-Pippidi 2013). Several institutions studying corruption employ this definition. Among them is Transparency International (TI) which initiated the Corruption Perception Index (CPI) in 1995. Similarly, the World Bank’s definition of corruption is often quoted in the literature as “the abuse of public office for private gain” (World Bank 1997). Based on this general definition, it is worth noting that the abuse of entrusted responsibilities and authority is not limited to the ‘public’ officials and ‘public’ sector as it also takes place in the private sector. Corruption in that sense is also viewed as a one-sided process, encompassing one individual as the sole actor even though the action can sometimes involve two or more persons. In other words, one is the corrupt official receiving benefits, and the other is the person offering them to get a service done. Corruption is thus a complex concept encompassing many features and dimensions, including more than one actor, different interests, intended

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benefits, abused power, and a common consensus within the society that this behavior is against its norms. However, this last dimension is not easy to pinpoint, due to diverse interpretations even among individuals in one society as well as across societies (Gampat 2007). In line with that, the definition employed in this book is the working definition of the World Bank, the United Nations, and Transparency International, which is the “abuse of public office for private benefit”. Relying on this definition assists in offering a wide perspective and enables flexibility in analyzing the countries under study. Most of the data used in this book is derived from those international institutions, which allows more consistency throughout the research. Having mentioned earlier that the focus of this book is corruption in the public sector, it is worth looking at its different practices, which helps in the later analysis and reflection on the MENA countries within this book. Corruption manifests in various forms on different levels of public administration. The most common distinction on the governmental level is between grand and petty corruption. Grand corruption occurs when both the amount of corrupt activities is large, and those involved in them are high-level officials. It is at the decision-making level, and therefore is also called political corruption, since it is associated with unethical behaviors of those assigned to take decisions for the general public, legislate, and enforce laws. In this context, these highlevel officials abuse power vested in them to enhance their status, gain more benefits, and in many instances sustain their political positions. Such conduct and decisions occur in complete secrecy; therefore, they are rarely detected. This type of corruption not only leads to misallocation of resources, but it also negatively affects the whole of society. While grand corruption is strongly linked to the political elite, it is also apparent in economies that are witnessing rapid growth, in which there are opportunities for new investments and industries. It can also include arms deals and natural resource extraction (Heidenheimer et al. 1993; Moody-Stuart 1997; Andvig et al. 2000; Alan and Theobald 2000; Leenders and Sfakianakis 2001; Rose-Ackerman 2002; Cisar 2003; Khan 2006; Bray 2007; FATF 2011). Petty corruption, on the other hand, falls at the other end of the administrative hierarchy, way below grand corruption. It refers to minor benefits associated with routine decisions and undertakings assigned to low-level civil servants, which is why it is also referred to as bureaucratic corruption. Typically, this type involves activities like issuing licenses, tax

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and customs authorities, school admissions, hospital access, and many other services. In many cases, petty corruption is initiated by the service seeker (the person offering a bribe or equivalent in kind) in order to bypass bureaucratic regulations, i.e., obtain a privilege, gain access, or lessen the time needed to get the service done. Unlike grand corruption, which abuses rules and regulations to serve the private interest of those in power, petty corruption may not necessarily have strong political consequences, as it takes place at the administrative end of the political system. Petty corruption occurs regularly when civil servants are underpaid and may be tempted to increase their income through dishonest activities (Heidenheimer et al. 1993; Andvig et al. 2000; Leenders and Sfakianakis 2001; Rose-Ackerman 2002; Cisar 2003; Khan 2006; Bray 2007; FATF 2011). Even though the distinction between grand and petty corruption remains unclear in many instances, it is relevant in analytical terms, and in the case of this book, to the study of the countries of the MENA region. Corruption takes many forms, with some practices involving threats or coercion, and some happening on a day-to-day basis, such as bribery, while others are unusual, complex, and involve huge resources. Nevertheless, they all tend to take place in secret and may be recognized in certain circumstances. The most common forms relevant to this book are described below (Gupta 1995; Rose-Ackerman 1997a; Amundsen 1999; Andvig et al. 2000; Myint 2000; UNODC 2004; Richter and Burke 2007; Lambsdorff 2007; Goldstraw-White and Gill 2012). The most well-known and common form of corruption is bribery, the payment of money or a benefit in kind to a public official in exchange for a service. Corruption is a two-sided process, and in the case of bribery, the initiative can come from either the benefit taker or the benefit giver. The benefit is often money but can also be valuables or favors of personal interest to the bribe taker, such as incentives or access to information. The term has different connotations in different cultures. For example, with petty corruption in the MENA region, a ‘sweetener’, commonly known as baksheeh, is offered to civil servants to make a bureaucratic process faster or easier, or to bypass it. Extortion is a kind of blackmail, as it mainly relies on coercion, power, and the threat of violence to oblige a person to act in a certain manner. Extortion can be initiated by a person seeking favors and benefits, and in this case, officials are the victims. Sometimes public officials misuse their authority to gain personal advantage, and this is generally associated with bureaucratic regulations of which few have oversight, so they are less

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accountable for their decision making. Extortion is similar to bribery but differs in two aspects. The first is that it is a corrupt behavior that uses coercion, violence or the threat of violence to extract money or other benefits. The second is that, unlike the exchange of benefits associated with bribery, one party can obtain a substantial benefit while the other gets nothing, except being let go and not intimidated again. Embezzlement is often associated with grand corruption. It is the ability of a public official to exploit their position and power to access and make use of valuables, money, or property entrusted to their authority. The actions of embezzlement are often referred to as theft, which is not always classified as corruption. This type is obvious in some of the MENA region countries as it is a more common occurrence in authoritarian regimes. Within those regimes, there is less chance of being caught, and sanctions are rarely applied, mainly due to the absence of a strong legal system. Fraud is the illegal and unethical extraction of money. It involves deception and providing false data in order to manipulate the person in charge of the data to take certain actions based on it. It is considered fraud when state institutions and officials are part of informal black markets, and when illegal goods are traded. Since it generally involves huge amounts of money or falsifying very critical information, it mostly falls under the heading of grand corruption. Other abuses of power can happen through preferential treatment, which occurs in three interrelated forms of corruption: favoritism, nepotism, and clientelism. Preferential treatment involves a person in power granting certain benefits, based on the powers invested in their position, and favoring someone who is affiliated to them in some way. The affiliation and link can be family, friendship, political party, religion, sect, tribal ties, or any other group identity that links the persons together. Such actions create conflicts of interest, as when someone is seeking a personal advantage, it might damage the interests of another or even of the public generally. Another aspect of the conflict is that manipulative behavior in order to gain some benefit is against the code of conduct of public office. However, rationalizing and defining an ambiguous situation where circumstances intermingle, can be challenging. Examples include donations to certain parties, appointment of individuals from the ruling family or friends to political positions, or granting a license for business operations to specific individuals. In this connection, Varraich (2014) developed an umbrella model for corruption and other concepts that

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are often associated with it (clientelism, state capture, patrimonialism, particularism, and patronage), showing how the concepts overlap. In conclusion, the distinction between a corrupt and a non-corrupt act is not always crystal clear. Even though corruption, whether grand or petty, and taking any of the forms mentioned, may be evident, grey areas exist when it comes to distinguishing between appropriate and inappropriate behaviors. This can include gift giving, lobbying, and state capture of certain services or goods like natural resources. For example, in some societies, an exchange of gifts is a very common and accepted behavior when a service is done by a person in a public office, but in other societies this is considered a corrupt activity and is strictly forbidden. Therefore, in each and every culture, corruption is perceived differently. Legal systems also differ with regard to penal codes, and the clarity and efficacy of rules and regulations. In a nutshell, this book relies on the broad definition of corruption as the abuse of public office for private interest, since it focuses on public-sector corruption and primarily relies on data and reports available from international organizations that employ this definition (UN, World Bank, Transparency International). This in turn allows coherent and consistent analysis of the phenomenon throughout the study.

References Adsera, A., Boix, C., & Payne, M. (2003). Are you Being Served? Political Accountability and Quality of Government. Journal of Law, Economics, and Organization, 19(2), 445–490. Aikin, C. (1964). Corruption. In J. Gould & W. L. Kolb (Eds.), A Dictionary of the Social Sciences. London: Tavistock Publications Limited. Alam, M. S. (1989). Anatomy of Corruption: An Approach to the Political Economy of Underdevelopment. American Journal of Economics & Sociology, 48(4), 441–471. Alan, D., & Theobald, R. (2000). Corruption and Democratization. London: Frank Cass. Amundsen, I. (1999). Political Corruption: An Introduction to the Issues (Working Paper. 99(7)). Bergen: Chr. Michelsen Institute. Anderson, C., & Tverdova, Y. (2003). Corruption, Political Allegiances and Attitudes Toward Government in Contemporary Democracies. American Journal of Political Science, 47 (1), 91–109.

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Andvig, J. C., Fjeldstad, O. H., Amundsen, I., & Søreide, T. (2000). Research on Corruption A Policy Oriented Survey. Chr. Michelsen Institute and Norwegian Institute for International Affairs. http://www.icgg.org/downloads/ contribution07_andvig.pdf. Banfield, E. C. (1979). Corruption as a Feature of Governmental Organization. In M. Ekpo (Ed.), Bureaucratic Corruption in Sub-Saharan Africa: Toward a Search for Causes and Consequences (pp. 147–170). Washington, DC: University Press of America. Bayley, D. H. (1966). The Effects of Corruption in a Developing Nation. Western Political Quarterly, 19(December), 719–732. Becker, G. S., & Stigler, G. J. (1974). Law Enforcement, Malfeasance and the Compensation of Enforcers. Journal of Legal Studies, 3(1), 1–18. Besley, T. (2006). Principled Agents? The Political Economy of Good Government. Oxford: Oxford University Press. Bray, J. (2007). Facing Up to Corruption: A Practical Business Guide. London: Control Risks. Cisar, O. (2003). Strategies for Using Information Technologies for Curbing Public-Sector Corruption: The Case of the Czech Republic (CR). Budapest: Open Society Institute. Elster, J. (1989). Social Norms and Economic Theory. Journal of Economic Perspectives, 3(4), 99–117. Financial Action Task Force (FATF). (2011). Laundering the Proceeds of Corruption. Paris: FATF/OECD. Friedrich, C. J. (1966). Political Pathology. Political Quarterly, 37 (1), 70–85. Gampat, R. (2007). Approaches to Corruption (HDRU Brief No. 03/07). Colombo: UNDP Regional Centre. Gibbons, K. M. (1989). Toward an Attitudinal Definition of Corruption. In A. Heidenheimer, M. Johnston, & V. LeVine (Eds.), Political Corruption: A Handbook (pp. 165–171). New Brunswick, NJ: Transaction Publishers. Goldstraw-White, J., & Gill, M. (2012). Bribery, Corruption and Fraud in the Middle East. Survey Study. Dubai: Ernest & Young. Gould, D. J. (2001). Administrative Corruption: Incidence, Causes and Remedial Strategies. In A. Farazmand (Ed.), Handbook of Comparative and Development Public Administration (pp. 761–774). New York: Marcel Dekker Inc. Gove, P. B. (Ed.). (1961). Webster’s Third New International Dictionary of the English Language. A. Merriam-Webster. Green, D. P., & Shapiro, I. (1994). Pathologies of Rational Choice Theory: A Critique of Applications in Political Science. New Haven: Yale University Press. Gupta, A. (1995). Blurred Boundaries: The Discourse of Corruption, the Culture of Politics and the Imagined State. American Ethnologist, 22(2), 375–402.

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Heidenheimer, A. J. (1989). Perspectives on the Perception of Corruption. In A. J. Heidenheimer, M. Johnston, & V. T. Le Vine (Eds.), Political Corruption: A Handbook (pp. 149–163). New Brunswick, NJ: Transaction Publishers. Heidenheimer, A. J., Johnston, M., & LeVine, V. T. (Eds.). (1993). Political Corruption. A Handbook (Third Printing 1993). New Brunswick, NJ: Transaction Pub. Hornby, A. S., Ashby, M., & Wehmeier, S. (2000). Oxford Advanced Learner’s Dictionary of Current English. Oxford: Oxford University Press. Johnston, M. (1996, September). The Search for Definitions: The Vitality of Politics and The Issue of Corruption. International Social Science Journal, 48(3), 321–335. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2005, June). Governance Matters IV: Governance Indicators for 1996–2004 (Policy Research Working Paper 3630). The World Bank. Khan, M. H. (1996, April). A Typology of Corrupt Transactions in Developing Countries. IDS Bulletin, 27 (2), 12–21. Khan, M. (2006). Determinants of Corruption in Developing Countries: The Limits of Conventional Economic Analysis. In S. Rose-Ackerman (Ed.), International Handbook on the Economics of Corruption (pp. 216–244). Cheltenham, UK: Edward Elgar. Klitgaard, R. (1988). Controlling Corruption. Berkeley: University of California Press. Kubbe, I. & Varraich, A. (Eds.). (2020). Corruption and Informal Practices in the Middle East and North Africa. London: Routledge. Kurer, O. (2005). Corruption: An Alternative Approach to Its Definition and Measurement. Political Studies, 53(1), 222–239. Lambsdorff, J. G. (2007). The Institutional Economics of Corruption and Reform: Theory, Evidence, and Policy. Cambridge: Cambridge University Press. Lancaster, T. D., & Montinola, G. R. (2001). Comparative Political Corruption: Issues of Operationalization and Measurement. Studies in Comparative International Development (SCID)., 36(3), 3–28. Leenders, R., & Sfakianakis, J. (2001). Combating Corruption: Constitutional Frameworks for the Middle East and North Africa. Center for Constitutional Transitions, International Institute for Democracy and Electoral Assistance and the United Nations Development Project. Lessig, L. (2013). Foreword: ‘Institutional Corruption’ Defined. Journal of Law, Medicine and Ethics, 41(3), 2–4. Manzetti, L., & Blake, C. (1996). Market Reforms and Corruption in Latin America. Review of International Political Economy, 3, 671–682. McMullan, M. (1961). A Theory of Corruption. Sociological Review, 9, 181–201. Moody-Stuart, G. (1997). Grand Corruption. Oxford: World View Publishing.

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Morris, S. D. (1991). Corruption and Politics in Contemporary Mexico. Tuscaloosa: University of Alabama Press. Mungiu-Pippidi, A. (2013). Controlling Corruption Through Collective Action. Journal of Democracy, 24(1), 101–115. Myint, U. (2000). Corruption: Causes, Consequences and Cures. Asia Pacific Development Journal, 7 (2), 33–58. Nye, J. S. (1967, June). Corruption and Political Development: A Cost-Benefit Analysis. American Political Science Review, 61, 417–427. Olson, M. (1971). The Logic of Collective Action: Public Goods and the Theory of Groups (2nd ed.). Cambridge, MA: Harvard University Press. Persson, T., & Tabellini, G. (2000). Political Economics: Explaining Economic Policy. Cambridge: The MIT Press. Richter, W. L., & Burke, F. (Eds.). (2007). Combating Corruption, Encouraging Ethics: A Practical Guide to Management Ethics. Lanham, MD: Rowman & Littlefield. Rose-Ackerman, S. (1978). Corruption: A Study in Political Economy. New York: Academic Press. Rose-Ackerman, S. (1997a). Corruption: Causes, Consequences and Cures. Trends in Organized Crime, 3(1), 109–111. Rose-Ackerman, S. (1997b). The Political Economy of Corruption. In K. A. Elliot (Ed.), Corruption and the Global Economy (pp. 31–60). Washington, DC: Institute for International Economics. Rose-Ackerman, S. (2002). “Grand” Corruption and the Ethics of Global Business. Journal of Banking & Finance, 26(9), 1889–1918. Sandholtz, W., & Gray, M. M. (2003). International Integration and National Corruption. International Organization, 57 (4), 761–800. Sandholtz, W., & Koetzle, W. (2000). Accounting for Corruption: Economic Structure, Democracy and Trade. Industrial Studies Quarterly, 44(1), 31–50. Scott, J. C. (1972). Comparative Political Corruption. Englewood Cliffs, NJ: Prentice-Hall. UNODC. (2004). UN Anti-Corruption Toolkit. Vienna: UNODC. van den Berg, P., & Noorderhaven, N. (2016). A Users’ Perspective on Corruption: SMEs in the Hospitality Sector in Kenya. African Studies, 75(1), 114–132. Varraich, A. (2014). Corruption: An Umbrella Concept (QoG Working Paper Series 2014:05). World Bank. (1997). World Development Report 1997: The State in a Changing World. New York: Oxford University Press.

CHAPTER 3

Literature Review

There is a great deal of literature on the topic of corruption. However, the wide range of empirical studies of corruption reveals different approaches and findings. It is generally agreed that corruption hinders development and weakens bureaucracy (Sequeira 2012). This chapter examines some of the prominent research outcomes, with a particular focus on the causes of corruption. Corruption has gained much attention among economics scholars. Leff (1964) was the first to analyze the relationship between corruption and economic growth, followed by Huntington (1968) and Hines (1995), who argued that corruption could affect growth positively. Mixed outcomes were recorded by studies of this relationship in countries as different as the US (Akai et al. 2005), Nigeria (Ajie and Wokekoro 2012), and China (Donga and Torgler 2013). Muta¸scu and Danuletiu (2010), using the Human Development Index to examine the correlation between corruption and political, administrative, and economic factors, concluded that corruption negatively affects individual welfare. Mauro (1997) argued that those in charge of public resource allocation have better opportunities for corrupt activities, and that consequently, corruption may assist in increasing public investment. In another study, Mauro (1998) contended that corruption lowers allocation of expenditure on education.

© The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_3

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Several studies have concluded that there is a strong relationship between GDP and corruption. Husted (1999) and Paldam (2002) argued that even though corruption negatively impacts GDP, less developed and developing countries are not able to fight it effectively. Lambsdorff (1999) and Paldam (2002) argued that the absence of corruption impacts GDP, contending that the growth of GDP can be explained through changes and variations in the levels of corruption in given countries, but not in absolute levels. Researchers like Akçay (2001), on the other hand, analyzed the level of corruption to FDI flows in some developing countries, finding that corruption does not act as a barrier to growth. Similarly, Evrensel (2010) reached the conclusion that corruption is associated more with governance variables than with growth. There is, therefore, some ambiguity regarding the impact of corruption on GDP growth (Knack and Keefer 1995; Brunetti et al. 1997). Mauro (1995) studied the impact of corruption on investment through a cross-sectional study of 67 countries. He found that corruption impacts investment negatively, reducing the ratio of investment to GDP. In a later study, Mauro (1997) reiterated his results, relying on a larger sample of countries. Knack and Keefer (1995) and Brunetti et al. (1997) reached similar findings, supporting Mauro’s argument. Offering another explanation, Wedeman (1996) argued that the effect of corruption on investment depends on the ‘level’ of corruption in a given country, countries with lower levels of corruption being strongly affected, while those with high levels of corruption will not notice such a strong impact on their investments. Campos et al. (1999) argued similarly, relying on data from the World Bank to analyze this aspect. They concluded that corruption is sometimes important for economic gains, with both predictability and level of corruption impacting on investment. Tanzi and Davoodi (1997) looked at the impact of corruption on investment. They argued that corruption affects the quality of a country’s infrastructure in many dimensions, including negatively impacting investments and, consequently, GDP. Although their findings were not robust, they found that corruption strongly increased public investment. Presenting an alternative view, Lambsdorff (1999) contended that the ‘nature’ of corruption determines its impact and risks to investment. Furthermore, many studies have tackled the relation between corruption and capital inflows, and it is widely acknowledged that corruption undermines a country’s capacity to attract foreign capital. Wheeler and

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Mody (1992) did not reach a robust conclusion about the relationship between FDI and a given country’s level of risk—which includes corruption, among other indicators. However, Wei (1997) found a strong negative impact of corruption on FDI by studying capital inflows between countries having bilateral relations. Alesina and Weder (1999) generally concluded that corruption does not particularly influence FDI. Nevertheless, Lambsdorff (1999) argued that corruption has a negative effect on capital inflows in the host country, indicating a strong relationship between corruption levels and credit risks, with poor governance having a bad impact on capital inflows in a corrupt country. Castro and Nunes (2013) tested the effect of corruption on FDI inflows. Their results showed a negative correlation, indicating that countries witnessing lower levels of corruption have higher FDI inflows. Delgado et al. (2014) studied the effect of FDI on economic growth, associating it with the level of corruption. They concluded that corruption indirectly affects FDI, weakening its share in achieving growth rates in several developing countries. Different outcomes are recorded by studies of the impact of corruption on FDI inflows in specific regions. Quazi (2014) analyzed East and South Asia, arriving at the conclusion that there is a clear negative effect of corruption on FDI inflows. Nevertheless, another study by Quazi et al. (2014) on African countries found that corruption acts as a facilitator for FDI inflows in these countries. Regarding trade, Lambsdorff (1998, 1999) analyzed data for the eighteen largest exporting and 87 largest importing countries, the later study relying on a wider range of countries and data. He concluded that countries vary in their willingness to export to corrupt countries, and hence their readiness to become involved in corrupt practices like bribery. He also found that these exporting countries are responsible for corruption occurring in international trade. As for foreign assistance, Alesina and Weder (1999) examined whether corrupt countries encourage donor countries1 to offer development aid or deter them from doing so. They did not find clear-cut evidence that corrupt countries are less prone to receive aid from OECD countries. However, while some countries, including Australia and the Scandinavian countries, have a greater tendency to discourage aid contributions to corrupt countries, this is not the case for countries like the US.

1 Donor countries in the cited study are the OECD countries.

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Some scholars have looked at the political implications of corruption. Many have argued that corruption erodes legitimacy, leading to a lack of trust by citizens in the political system (Seligson 2002; Anderson and Tverdova 2003). Through testing specific dimensions of legitimacy in six Latin American countries, Booth and Seligson (2009) concluded that corruption—particularly obvious in petty corruption—undermines the population’s trust in the system. Chang and Chu (2006) studied some Asian countries, finding a strong relationship between trust and state legitimacy. They contended that when citizens perceive higher levels of political corruption, this leads to reduced trust in the legitimacy of the state. Rose-Ackerman (2001) analyzed post-socialist state transitions, highlighting the interaction between trust and democracy and stressing the importance of distinguishing between trust among individuals and trust in the bureaucracy, and their impact on corruption. However, other studies have argued that patronage can assist in strengthening legitimacy in unstable situations. These arguments are based on the fact that corrupt behaviors related to offering political support and receiving rewards in return can enhance legitimacy, with benefits exchanged in a patron– client system (Huntington 1968; Reno 1995; Papagianni 2008; OECD 2008; Bellina et al. 2009; Mungiu-Pippidi 2011). Making a similar argument, Arriola (2009) analyzed some African countries, contending that patronage networks enable leaders to stay in office longer, which indicates political stability. Beissinger and Young (2002) argued that patronage can act as a legitimizing factor for the country as long as the political elite’s interests do not surpass the state’s interest, but that if this does happen, state legitimacy is eroded. Galtung and Tisné (2009) argued that patronage networks can hinder state building in post-conflict countries, illustrating this by reference to several states in Africa. Another contrasting perspective is offered by Lindemann (2008), who finds that the effect of corruption on stability depends on the political elites’ relations with society. Furthermore, many researchers have focused on the question of how to fight corruption. De Asis (2000), basing his insights on the World Bank’s perspectives on governance, argued that there are three main pillars of corruption. First, incentives prevailing in low wages, patronage and excessive bureaucracy; second, absence of transparency and access to information; and third, lack of accountability. His broadly acceptable list of solutions to corruption, based on these three interlinked issues, included ‘domestic’ efforts, primarily through raising awareness,

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political will, and following a participatory analysis of the issue. Tanzi’s (2000b) alternative viewpoint was based on the IMF’s experiences with fiscal decentralization. Tanzi stressed the importance of better-functioning public institutions in charge of tax policies, administration, expenditures, and budgets. He also emphasized the importance of effective resource transfer from the center to the subdivisions, in order to ensure effective and specific task execution. In the absence of efficient decentralization policies and procedures, corruption becomes more profoundly rooted in the lower levels of administration (Tanzi 2000b).

1

Causes of Corruption

Although scholars have worked extensively on the causes of corruption, there is no consensus in the literature (Bardhan 1997; Ades and Di Tella 1997; Tanzi 1998; Lambsdorff 1999; Jain 2001; Aidt 2003; Serra 2006). This section reviews the relevant literature, highlighting the most significant causes of corruption and those most widely agreed upon among researchers. It is divided into three sub-sections that are the basis for the hypotheses and analytical framework of this book. The first addresses the regime characteristics, and the features of the political system and its bureaucratic structures that can positively or negatively impact corruption levels. The second looks at the different economic features within a given country. The third tackles developmental, societal, and cultural features affecting corruption levels in a given country. 1.1

Regime Characteristics

Democracy is a complex term; it is important to understand what democracy is in order to determine its indicators. It is a political system characterized by mass participation, competitive elections, the rule of law, and respect for civil rights. Many criteria need to be fulfilled for a country to be categorized as democratic. Among the most important characteristics of democracy are: first, accountability of the regime; second, political competition so that no specific political party or person can get a grip on power; third, political equality both for the electorate and for those running for public office, given that everyone has the right to access public office; and fourth, freedom of the media and especially a free press that monitors government activities and decisions, spreads awareness

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and keeps the public informed (Lipset 1959; Dahl 1971; Sartori 1987; Diamond et al. 1995; Roskin and Robert 2013). Paldam (1999a), Goldsmith (1999), and Sandholtz and Koetzle (2000) found no clear impact of democracy on corruption. However, Suphacahlasai (2005), Kunicova and Rose-Ackerman (2005), and Lederman et al. (2005) found that democracy and corruption are negatively correlated. Treisman (1999a) relied on Gastil’s democracy index and found little evidence of the effect of democracy on corruption levels, although in a later study (Treisman 2000), he argued that older democracies witness less corruption. Paldam (1999a), and Gerring and Thacker (2004, 2005) reached findings supporting those of Treisman (2000). In addition, Montinola and Jackman (2002) and Sung (2004) concluded that well-established democracies are negatively correlated with corruption; however, semi-democratic or autocratic regimes witness higher levels of corruption. De Mesquita et al. (2002) argued along the same lines, contending that political figures in non-democratic regimes hold onto power for longer. They succeed in sustaining power and misusing the country’s resources for their personal benefit; hence, these countries witness higher levels of corruption. Politicians in democratic countries, on the other hand, stay in office for a shorter time and seek to maintain their popularity in order to be re-elected; they therefore make more effort to offer public goods. In a World Bank study, Rose-Ackerman (1997: 40) argues for the importance of democracy to deter corruption, stating that “democracy gives citizens a role in choosing their political leaders. Thus, corrupt elected officials can be voted out of office”. In contrast, she later states that “democracy is not necessarily a cure for corruption. Some democracies harbor corrupt politicians even though citizens are aware of their malfeasance. Moreover, bribes are often used to fund political parties and election campaigns.” In relation to this, Lederman et al. (2001), Sung (2002), and Brunetti and Weder (2003) argue that a free press is negatively associated with corruption, as it reveals corrupt behaviors and abuses of public office to the masses. Linked to this is the importance of respecting political rights and civil liberties. Treisman (2007), using World Bank data, found that political rights are negatively associated with levels of corruption, but these findings were not robust. Another dimension of democracy is the quality of the judiciary, with an independent judiciary distinctly reducing corruption levels (World Bank 1997). Ades and Di Tella (1996), as well as Sung

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(2002), also found a negative relationship between the independence of judicial authority and levels of corruption. Decentralization is another aspect studied in association with corruption. It affects the intensity of corruption either positively by supporting better regulation with effective checks—hence lower corruption is observed—or negatively by creating more regulation with less monitoring, resulting in higher corruption levels. The concentration of power in capital cities and growing dissatisfaction with central government planning has introduced a broader perspective on administration (Smoke 1994; Olowu 2000). Decentralization has risen to the top of the development agenda and donor strategies. The World Bank (2000) considers decentralization an essential component of anti-corruption aid that is focused on governance and accountability in developing countries (Crook and Manor 1998; World Bank 1999). According to Khan (2002), decentralization is the process of changing government administration in order to be more responsive to the people’s needs by delegating some of the central government’s powers to the lower levels of administration. Even though the definition and process seem clear, the results of decentralization on the ground have differed widely among countries (Smoke and Lewis 1996), so there are no definitive findings regarding the impact of decentralization on corruption. Weingast (1995) and Breton (1996) argued that less corruption is evident in decentralized governments due to subdivisions competing to provide public services. Gurgur and Shah (2005) supported the argument that decentralization contributes to better governance; hence corruption decreases. They contended that corruption levels are higher in unitary systems, so corruption is more negatively correlated with unitary countries than with federal ones. A different perspective was offered by Banfield (1979), who argued that decentralization increases corruption, with fragmentation in the political system providing opportunities for corrupt practices to expand due to the smaller number of entities monitoring and ensuring transparency. Prud’homme (1995) argued that corruption is more evident in the lower levels of administration since more opportunities are present due to the relative freedom of action of local bureaucrats in decision making, as well as the proximity of those local officials to the public and their needs. Manor (1999) contended that decentralization is associated with a greater number of people involved in corrupt activities. Brueckner

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(2000), Tanzi (2000a, b), and Carbonera (2000) arrived at similar generalizations, concluding that in local subdivisions, corruption is more likely to take place. On another level of analysis, Shleifer and Vishny (1993) argued that corruption is more apparent in countries that are in the middle of the decentralization spectrum, meaning that the country is still in a mid-level of governmental centralization. However, countries that are either extremely centralized or extremely decentralized witness less corruption (Shleifer and Vishny 1993). Treisman (1999b) concluded that federal systems witness higher levels of corruption than centralized systems. Furthermore, Treisman (2000) used the Transparency International Index (CPI) to look at the relationship between corruption and decentralization in a cross-country analysis. He reached the same conclusion that federal states witness higher levels of corruption than unitary states. He explained that unitary states are ‘cleaner’ than federal ones, given the existence of clear and effective hierarchies of control that allow central government officials to limit subnational bureaucrats’ actions. Goldsmith (1999) had similar results, highlighting that decentralization does not offer a better system of administration since it is easier in such systems to be unseen and to get away with corrupt activities. Goel and Nelson (2010) employed two measures to look at decentralization—the number of government subdivisions in relation to the population and to the area. They obtained mixed outcomes regarding decentralization and corruption, but if better regulation is enacted and enforced, less corruption is observed. Looking at fiscal decentralization, Huther and Shah (1998) and Fisman and Gatti (1999) studied subdivisions’ expenditures as an indicator of decentralization, concluding that with decentralized public spending, lower corruption levels occur. Arikan (2000) as well as Fisman and Gatti (2002) similarly concluded that more subnational government spending—with fiscal decentralization—is associated with fewer corrupt activities. De Mello (2000) argued that fiscal decentralization generally connects the public’s needs more closely to government. Estache and Sinha (1995) worked on a cross-country analysis of 20 countries over 20 years. They found that deliverables to the public are positively affected when expenditure is decentralized; however, this is less efficient when funds are held by central government. Concerning history and its relationship with corruption, Treisman (1999a) and Swamy et al. (2001) looked at the impact of colonial history

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on corruption. Treisman (1999a) found that former British colonies witness lower corruption levels than other colonial heritages. Swamy et al. (2001) supported this argument, concluding that colonial histories of other countries witness higher levels of corruption compared to the British ones. Other studies looked at corruption in relation to years of independence, concluding that the early years of independence witness higher levels of corruption, followed by a brief decline, then an increase as it becomes established in the society (Knack and Keefer 1995; Paldam 2002; Lambsdorff 2006). This is also explained by Lambsdorff and Teksoz (2004), who contended that over time it becomes a common practice and a way to offer bribes in exchange for services. 1.2

Role of Government in the Economy

Many approaches have been used by many scholars to investigate the role of government and its effect on corruption, yet no robust findings have been achieved. Rose-Ackerman (1999) and Lambsdorff (2006) have argued that it is not easy to reach a concrete conclusion regarding the role of government in corruption. Goel and Nelson (1998), RoseAckerman (1999), and Graeff and Mehlkop (2003) have agreed that bigger governments can be a reason for higher corruption, as the public resorts to unethical and illegal behaviors to bypass red tape in order to make procedures quicker and easier. In another explanation, La Porta et al. (1999) argued that as bigger governments can employ and spend more on policies and regulations, efficient enforcement mechanisms lead to higher transparency and better governance, which consequently lowers corruption. Iterating on this, Lambsdorff and Cornelius (2000) argued that unclear and imprecise government regulations lead to higher corruption levels. Gerring and Thacker (2005) also found a negative correlation between the quality of regulations and corruption levels. Another dimension of the role of government is the degree to which the government controls and/or is part of the economic activities in a given country. Goel and Nelson (2010) looked at two aspects of government intervention. The first was the general size of the stateowned industry, foreign investment regulations, and the financial sector (including banks, wages, inflation, taxes, and prices). The second focused on monetary policies and the government’s role in the economy. In this regard, the authors used specific indicators in the Heritage Foundation’s Index of Economic Freedom to measure the role of government

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in the economy. They concluded that the greater the government intervention in the economy, the more opportunities are created to engage in corrupt activities. They also highlighted that big government is not in itself a reason for higher levels of corruption, because a large public sector with strong institutions, regulation, and checks and balances would lead to less corruption. Treisman (2000) and Ali and Isse (2003) reached another conclusion. They assumed that state involvement is negatively correlated with corruption, meaning that it helps reduce corruption. Moreover, an earlier study by Shleifer and Vishny (1993) contended that the more monopolistic the government’s attitude, the higher the potential for corrupt activities, especially apparent in rents. Ades and Di Tella (1997) found that government intervention increases corruption. In another piece of research, Lambsdorff (1999) argued that the role of government has no effect on corruption; rather, it is poor institutions that are sources of corruption. Concerning economic freedom and corruption, Henderson (1999) and Paldam (2002) claimed a negative correlation between economic freedom and corruption. Broadman and Recanatini (2001) and Djankov et al. (2002) looked at government regulation of market entry. They contended that there is a positive correlation between government regulation and corruption, where the greater the regulation of market entry, the higher the levels of corruption. Nevertheless, Johnson et al. (1998), Bonaglia et al. (2001), and Fisman and Gatti (2002) argued that as the size of the unofficial economy increases, so too does corruption. Treisman (1999a) and Leite and Weidmann (1999) argued that there is a clear negative relationship between openness to trade and corruption levels. Sachs and Warner (1995) assessed this variable using the number of years the country has been open to trade. This is supported by Ades and Di Tella (1997, 1999), who assume a negative relationship between openness and corruption, using data derived from Business International (BI) and Institutes for Management Development (IMD). Ades and Di Tella (1997) viewed the country’s openness in terms of competition. They analyzed it through the ratio of imports to GDP, concluding that openness is negatively correlated with corruption. Brunetti and Weder (1998), Treisman (2000), and Herzfeld and Weiss (2003) found that the greater the amount of imports—an indicator of trade openness— the less the levels of corruption. Moreover, Paldam (2001), Brunetti and Weder (2003), Knack and Azfar (2003), Graeff and Mehlkop (2003), and Gurgur and Shah (2005) found a negative relationship between openness

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and corruption; the more a country is open to trade, the less corruption is observed. Scholars like Knack and Azfar (2003) and Fréchette (2006) have given another viewpoint. Both studies determined that the more trade restrictions a country enforces, the higher the levels of corruption this country witnesses. This is in line with the findings mentioned above on the negative relationship between trade openness and corruption. Another aspect studied by Leite and Weidmann (1999) and Treisman (2000). These scholars argued that the longer a country has been open to trade, the less corruption is witnessed. Moreover, Sandholz and Gray (2003) contended that the greater the participation in and membership of international or regional organizations (such as the UN, IMF, and WTO) and the longer the duration of integration, the less corruption is witnessed. This is due to the fact that countries under the umbrella of such organizations need to abide by international agreements and codes of conduct. As for corruption and richness in natural resources, Ades and Di Tella (1999), Montinola and Jackman (2002), Kunicova (2002), Treisman (2003), Lambsdorff (2006), and Bhattacharyya and Hodler (2010) reached comparable findings, arguing that the natural resource endowments of a country allow higher opportunities for corruption, whether rent seeking or rent generation. Leite and Weidemann (1999) arrived at robust conclusions with regard to the abundance of natural resources, mentioning that the possession of natural resources provides opportunities for corruption to take place. Their analysis used fuel exports as a percentage of GNP to measure rents. Studying another dimension, Tornell and Lane (1998) found a positive correlation between exports of raw material and corruption opportunities. Nevertheless, Goel and Nelson (2010) concluded that a country’s population distribution has a relatively stronger impact on corruption than its possession of natural resources. 1.3

Development and Society

Lipset (1960) argued that development has an apparent impact on democracy, as it assists in increasing education levels, which in turn contributes to raising public awareness. Consequently, any official abuses or inappropriate acts can be challenged. Generally, La Porta et al. (1999), and Treisman (2000) contended that the higher the level of economic development, the lower the levels of corruption. This is due to the fact

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that development helps raise literacy rates in a country, positively indicating the spread of awareness among the population. Serra (2006) and Akçay (2006) argued that when countries become more developed and prosperous, the levels of corruption drop. Damania et al. (2004), Brown et al. (2005), Kunicova and Rose-Ackerman (2005), and Lederman et al. (2005) agreed that there is a negative relationship between development and corruption. These researchers used different indicators to analyze development in relation to corruption. For example, Damania et al. (2004) determined that income levels could have an impact on corruption. Ades and Di Tella (1999) and Truex (2011) looked at literacy rates, while other studies have used GDP per capita to measure development. Even though studies used numerous variables, they reached one general conclusion, which is that the country’s development status can help explain its level of corruption. Findings regarding the relationship between income and corruption were not consistent. On one hand, Chang and Golden (2004), Kunicova and Rose-Ackerman (2005), and Lederman et al. (2005), along with other authors, found that as income increases, corruption decreases. On the other hand, Braun and Di Tella (2004) and Fréchette (2006) reached the opposite finding, namely a positive relationship between income and corruption. Rijckeghem and Weder (1997, 2001) argued that low public-sector salaries are negatively correlated with corruption. They argued that on one side, low wages drive public officials to increase their income through illegal and unethical means, with less developed countries witnessing higher corruption levels. On the other side, high salaries earned by high-ranking public officials present a risk for these officials if they are detected in a corrupt act. They therefore try to prevent this loss, behaving more ethically and refraining from illegal actions. Treisman’s (1999a), and Swamy et al.’s (2001) analysis of this relationship reached imprecise conclusions, which were mostly not vigorous. Gupta et al. (1998) have analyzed income—measured by the GINI coefficient— concluding that income inequality is positively correlated with corruption. Nevertheless, Paldam (2002) also used the GINI coefficient, concluding that it does not explain much and shows little variation in relation to the levels of corruption. Park (2003) and Brown et al. (2005) contended that there is no strong positive relationship between income inequality and corruption. However, Husted (1999) and Swamy et al. (2001) argued

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that inequality gives rise to more chances of corruption. Amanullah and Eatzaz (2016) concluded that there is a relationship between income inequality and corruption levels. Swamy et al. (2001) and Dollar et al. (1999) studied the gender effect on corruption by analyzing the percentage of women in the parliament and their participation in the labor force. They found that both indicators of women’s participation are negatively related with corruption. Another point was highlighted by Mocan and Rees (2005), who contended that males are more prone to engage in corrupt practices than females. Sung (2003) argued that the aspect of gender should be studied along with indicators of a well-functioning democratic regime that pays attention to promoting women’s rights. In that regard, these findings are in line with studies that call for women’s empowerment in society to ensure good governance. Some researchers analyzed religion as a variable to understand how it affects levels of corruption. Treisman (1999a) argued that some religions—Catholicism, Orthodox, and Islam—are hierarchical—which assists in lowering corruption levels. He built a strong relationship between religions, specifically Protestantism, and corruption, arguing that there exists a strong negative relationship between the percentage of Protestants among the population and corruption levels. Paldam (1999b) offers another in-depth analysis of this relation. He concluded that the presence of a high percentage of Reformed Christianity (Protestants and Anglicans) and religious tribal affiliations in countries reveal lower levels of corruption. However, in countries with a high percentage of preReform Christianity, Islam, Buddhism, and Hinduism, higher levels of corruption are witnessed. Herzfeld and Weiss (2003) and Chang and Golden (2004) found a negative relationship between corruption and the percentage of population following a particular religion. La Porta et al. (1999) and Paldam (2001) concluded the opposite. Another level of analysis related to La Porta et al.’s (1999) hierarchies idea is the ‘power distance’ concept. This is a precise cultural predictor of corruption practices, since it measures the extent to which officials who are less powerful accept and follow power distribution due to the existence of hierarchies. Husted (1999) supported the finding of La Porta et al. (1999), concluding that there is a positive relationship between power distance and corruption. La Porta et al. (1997), Adsera et al. (2003), and Uslaner (2004) contended that trust is negatively correlated with corruption. This is due to the belief that it helps civil servants

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cooperate with each other as well as with the masses. Husted (1999) concluded that culture strongly impacts the levels of corruption in societies, and therefore an important way to fight corruption is to take into consideration culture as a significant indicator.

2

The Analytical Framework

From the literature review above, which includes diverse perspectives on the causes of corruption, it is clear that there is a lack of general agreement among scholars on the strength of causal relationships between corruption and the different variables impacting its intensity. Building on the range of studies that have identified the most relevant independent variables causing corruption, this book develops an analytical framework to help address the causes of corruption in the fifteen MENA region countries. The framework offers in-depth explanations of countryspecific conditions in order to analyze how each variable might be a cause of corruption in the countries under study and have a positive/negative impact on its intensity. The book focuses on analyzing the causal relationship between ten independent variables and corruption, presenting the dependent variable. These variables are categorized to portray three main dimensions in a given country: political, economic, and developmental. The first group of independent variables addresses regime characteristics, including the rule of law, political rights, and press freedom, core criteria in a well-functioning democracy. The rule of law indicates equality of all before the law, access to justice, securing basic rights, and an independent judiciary. Political rights reflect how far the population enjoys the right to vote, run for public office, and voice their political demands freely. Press freedom shows how far the country respects freedom of expression and to what extent journalists are free to articulate their views openly. The second group of independent variables are economic ones, including the quality of regulation, economic openness, and natural resource endowments. The quality of regulation looks at government efficiency in its regulation of the economic sector, as well as the intensity of government control and ownership of different sectors of the economy. Economic openness indicates how far the country imposes barriers, as well as market openness, and participation in the international trading community. Natural resource endowments determine the abundance of natural resources in the country. The third group of independent variables are concerned with the societal and developmental dimensions of a country, including income

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inequality, poverty rates, literacy rates, and women’s empowerment. Income inequality reflects how much income levels vary in a country, departing from a fair distribution among the population. Poverty rates show how much of the population are living below national poverty lines. Literacy rates look at education as a main pillar in any society’s development. Lastly, women’s empowerment addresses the gender dimension, looking at how far women enjoy equal opportunities without discrimination and are able to actively participate in society.

3

Hypotheses of the Study

The hypotheses of this study have been formulated to cover the three main dimensions in a country and developed in line with the most relevant scholarly efforts on the variables impacting the intensity of corruption. The systematic analysis aims to determine the causes of corruption in the MENA region countries during the period 1999– 2010. The following ten hypotheses are addressed within each country, then systematically compared across the sub-regions and finally across the fifteen MENA region countries: Regime Characteristics Variables H1 The higher the respect for rule of law, the lower the levels of corruption H2 The higher the respect for political rights, the lower the levels of corruption H3 The higher the freedom of the press, the lower the levels of corruption Economic Variables H4 The better the quality of regulation, the lower the levels of corruption. H5 The greater the economic openness, the lower the levels of corruption. H6 The richer the country is in natural resources, the higher the levels of corruption. Development Variables H7 The higher the level of income inequality, the higher the levels of corruption. H8 The higher the poverty rate, the higher the levels of corruption. H9 The higher the literacy rate, the lower the levels of corruption. H10 The more women are empowered, the lower the levels of corruption.

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4

Concluding Remarks

The studies conducted so far on the causes of corruption have not been sufficient to reach robust conclusions about the specific causes of corruption across regions and countries. Scholars agree that more research on the causal relationship between corruption and the different variables needs to be carried out, with the support of case studies. More qualitative research using in-depth analysis of the countries can add another dimension to the literature on the causes of corruption. This book attempts to do so, focusing on the MENA region countries.

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Herzfeld, T., & Weiss, C. (2003). Corruption and Legal (In)-Effectiveness: An Empirical Investigation. European Journal of Political Economy, 19(3), 621– 632. Hines, J. R. (1995). Forbidden Payment: Foreign Bribery and American Business After 1977 (National Bureau of Economic Research Working Paper No. 5266). Huntington, S. P. (1968). Political Order in Changing Societies. New Haven: Yale University Press. Husted, B. (1999). Wealth, Culture, and Corruption. Journal of International Business Studies, XXX (2), 339–360. Huther, J., & Shah, A. (1998). A Simple Measure of Good Governance and its Application to the Debate on the Appropriate Level of Fiscal Decentralization (World Bank Working Paper Series No. 1894). Washington, DC. Jain, A. K. (2001). Corruption: A Review. Journal of Economic Surveys, 15(1), 71–121. Johnson, S., Kaufmann, D., & Zoido-Lobaton, P. (1998). Regulatory Discretion and the Unofficial Economy. American Economic Review Papers and Proceedings, 88(2), 387–92. Khan, M. H. (2002). Corruption and Governance in Early Capitalism: World Bank Strategies and Their Limitations. In J. Pincus & J. Winters (Eds.), Reinventing the World Bank (pp. 164–184). USA: Cornell University Press. Knack, S., & Azfar, O. (2003). Trade Intensity, Country Size and Corruption. Economics of Governance, 4(1), 1–18. Knack, S., & Keefer, P. (1995). Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Measures. Economics and Politics, 7 (3), 207–227. Kunicova, J. (2002). When Are Opposition’s Lips Sealed? Comparative Political Corruption in Democracies. Department of Political Science, Yale University, New Haven. Kunicova, J., & Rose-Ackerman, S. (2005). Electoral Rules and Constitutional Structures as Constraints on Corruption. British Journal of Political Science, 35(4), 573–606. La Porta, R., Lopez-De-Silanes, F., Shleifer, A, & Vishny, R. (1997). Trust in Large Organizations. American Economic Review, 137 (2), 333–38. La Porta, R., Lopez de Silanes, F., Shleifer, A., & Vishny, R. (1999). The Quality of Government. Journal of Law Economics and Organization, 15(1), 222– 279. Lambsdorff, J. G. (1998). An Empirical Investigation of Bribery in International Trade. European Journal of Development Research, 10(1), 40–59. Lambsdorff, J. G. (1999). The Transparency International Corruption Perceptions Index 1999: Framework Document. Berlin: Transparency International.

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Lambsdorff, J. G. (2006). Causes and Consequences of Corruption: What Do We Know from a Cross-section of Countries? In S. Rose-Ackerman (Ed.), International Handbook on the Economics of Corruption (pp. 3–51). Cheltenham, UK: Edward Elgar. Lambsdorff, J. G., & Cornelius, P. (2000). Corruption, Foreign Investment and Growth. The Africa Competitiveness Report 2000/2001. Lambsdorff, J. G., & Teksoz, S. U. (2004). Corrupt Relational Contracting. In J. G. Lambsdorff, M. Schramm, & M. Taube (Eds.), The New Institutional Economics of Corruption (pp. 138–151). New York: Routledge. Lederman, D., Loayza, N. V., & Soares, R. R. (2001). Accountability and Corruption. Political Institutions Matter (The World Bank Policy Research Working Paper). The World Bank. Lederman, D., Loayza, N. V., & Soares, R. R. (2005). Accountability and Corruption: Political Institutions Matter. Economics and Politics, 17 (1), 1–35. Leff, N. (1964). Economic Development through Bureaucratic Corruption. American Behavioral Scientist, 8(3), 8–14. Leite, C., & Weidemann, J. (1999). Does Mother Nature Corrupt? Natural Resources, Corruption and Economic Growth (IMF Working Paper No. 99/85). Lindemann, S. (2008). Do Inclusive Slite Bargains Matter? A Research Framework for Understanding the Causes of Civil War in Sub-Saharan Africa (Discussion Paper 15). LSE London: Crisis States Research Centre. Lipset, S. M. (1959). Some Social Requisites of Democracy: Economic Development and Political Legitimacy. American Political Science Review, 53(1), 69–105. Lipset, S. M. (1960). Political Man: The Social Bases of Politics. Garden City, NY: Anchor Books. Manor, J. (1999). The Political Economy of Democratic Decentralization. Washington, DC: The World Bank. Mauro, P. (1997). The Effects of Corruption on Growth, Investment, and Government Expenditure: A Cross-Country Analysis. In K. A. Elliott (Ed.), Corruption and the Global Economy (pp. 83–107). Washington, DC: Institute for International Economics. Mauro, P. (1998). Corruption and the Composition of Government Expenditure. Journal of Public Economics, LXIX, 263–279. Mesquita, D., Bruce, M., James, D., Siverson, R. M., & Smith, A. (2002). Political Institutions, Policy Choice and the Survival of Leaders. British Journal of Political Science, 32(4), 559–590. Mocan, H. N., & Rees, D. I. (2005). Economic Conditions, Deterrence and Juvenile Crime: Evidence from Micro Data. American Law and Economics Review, 7 (2), 319–349.

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Montinola, G. R., & Jackman, R. W. (2002). Sources of Corruption: A CrossCountry Study. British Journal of Political Science, 32(1), 147–170. Mungiu-Pippidi, A. (2011). Contextual Choices in Fighting Corruption: Lessons Learned (Report 4/2011). Oslo: Norwegian Agency for Development Cooperation. Muta¸scu, M., & Danuletiu, D. C. (2010). Corruption and Social Welfare in The EU27 Countries. Annales Universitatis Apulensis Series Oeconomica, 12(1), 450–459. OECD. (2008). Concepts and Dilemmas of State Building in Fragile Situations: From Fragility to Resilience (OECD/DAC Discussion Paper). Paris: OECD. Olowu, D. (2000). Bureaucracy and Democratic Reform. In G. Hyden, D. Olowu, & H. Ogendo (Eds.), African Perspectives on Governance (pp. 153– 179). Trenton, NJ: Africa World Press. Paldam, M. (1999a). The Big Pattern of Corruption. Economics, Culture and the Seesaw Dynamics (Unpublished manuscript. University of Aarhus. Center for Dynamic Modelling in Economics. Working Paper, 11). Paldam, M. (1999b). Corruption and Religion. Adding to the Economic Model (Unpublished manuscript). University of Aarhus. Paldam, M. (2001). Corruption and Religion: Adding to the Economic Model. Kyklos., 54(2–3), 383–413. Paldam, M. (2002). The Cross-country Pattern of Corruption: Economics, Culture and the Seesaw Dynamics. European Journal of Political Economy, 18, 215–240. Papagianni, K. (2008). Participation and State Legitimation. In C. T. Call & V. Wyeth (Eds.), Building States to Build Peace (pp. 49–86). Boulder, CO: Lynne Rienner Publishers. Park, H. (2003). Determinants of Corruption: A Cross-National Analysis. The Multinational Business Review, 11(2), 29–48. Prud’homme, R. (1995, August). The Dangers of Decentralization. The World Bank Observer, 10(2), 201–220. Quazi, R. (2014). Corruption and Foreign Direct Investment in East Asia and South Asia: An Econometric Study. International Journal of Economics and Financial Issues, 4(2), 231–242. Quazi, R., Vemuri, V., & Soliman, M. (2014). Impact of Corruption on Foreign Direct Investment in Africa. International Business Research, 7 (4), 1–10. Reno, W. (1995). Corruption and State Politics in Sierra Leone. Cambridge, UK: Cambridge University Press. Rose-Ackerman, S. (1997). Corruption and Development. In Annual World Bank Conference on Development Economics. World Bank. Rose-Ackerman, S. (1999). Corruption and Government. Cambridge: Cambridge University Press.

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Rose-Ackerman, S. (2001). Trust, Honesty and Corruption: Reflection on the State-Building Process. European Journal of Sociology/Archives Européennes de Sociologie, 42(3), 526–570. Roskin, M., & Robert, C. (2013). Political Science: An Introduction (13th ed.). Boston: Pearson. Sachs, J., & Warner, A. (1995). Economic Reform and the Process of Global Integration. Brookings Papers on Economic Activity, 1, 1–119. Sandholtz, W., & Gray, M. M. (2003). International Integration and National Corruption. International Organization, 57 (4), 761–800. Sandholtz, W., & Koetzle, W. (2000). Accounting for Corruption: Economic Structure, Democracy and Trade. Industrial Studies Quarterly, 44(1), 31–50. Sartori, G. (1987). The Theory of Democracy Revisited. Chatham, NJ: Chatham House. Seligson, M. A. (2002). The Impact of Corruption on Regime Legitimacy: A Comparative Study of Four Latin American Countries. The Journal of Politics, 64(2), 408–433. Sequeira, S. (2012). Advances in Measuring Corruption in the Field. In D. Serra, & L. Wantchekon (Eds.), New Advances in Experimental Research on Corruption (Research in Experimental Economics. Vol. 15) (pp. 145–175). Yorkshire: Emerald Group Publishing Limited. Serra, D. (2006). Empirical Determinants of Corruption: A Sensitivity Analysis. Public Choice, 126(1–2), 225–256. Shleifer, A., & Vishny, R. W. (1993). Corruption. Quarterly Journal of Economics, 108(3), 599–617. Smoke, P. (1994). Local Government Finance in Developing Countries: The Case of Kenya. Nairobi: Oxford University Press. Smoke, P., & Lewis, B. (1996). Fiscal Decentralization in Indonesia: A New Approach to an Old Idea. World Development, 24(8), 1281–1299. Sung, H.-E. (2002). A Convergence Approach to the Analysis of Political Corruption: A Cross-National Study. Crime, Law and Social Change, 38(2), 137–160. Sung, H.-E. (2003). Fairer Sex or Fairer System? Gender and Corruption Revisited. Social Forces., 82(2), 703–723. Sung, H.-E. (2004). Democracy and Political Corruption: A Cross-National Comparison. Crime, Law and Social Change, 41(2), 179–193. Suphachalasai, S. (2005). Bureaucratic Corruption and Mass Media (Environmental Economy and Policy Research Discussion Paper [05.2005]). Swamy, A., Knack, S., Lee, Y., & Azfar, O. (2001). Gender and Corruption. Journal of Development Economics, 64(1), 25–55. Tanzi, V. (1998). Corruption Around the World: Causes, Consequences, Scope, and Cures, 559–594. Staff Papers-International Monetary Fund.

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Tanzi, V. (2000a). Fiscal Federalism and Decentralization: A Review of Some Efficiency and Macroeconomic Aspects (Chapter 14). In Proceedings of the Annual World Bank Conference on Development Economics (pp. 231–263). Washington, DC: The World Bank. Tanzi, V. (2000b). Some Politically Incorrect Remarks on Decentralization and Public Finance. In J. J. Dethier (Ed.), Governance, Decentralization and Reform in China, India and Russia (pp. 47–63). Dordrecht: Kluwer Academic Publishers. Tanzi, V., & Davoodi, H. (1997). Corruption, Public Investment, and Growth (International Monetary Fund Working Paper, 97/139). Tornell, A., & Lane, P. R. (1998). Voracity and Growth (CEPR Discussion Paper. No. 2001). National Bureau of Economic Research. Treisman, D. (1999a, June). The Causes of Corruption: A Cross-National Study (Unpublished manuscript). Los Angeles: University of California. Treisman, D. (1999b, September). Decentralization and Corruption: Why Are Federal States Perceived to be More Corrupt. Paper Prepared for the Presentation at the Annual Meeting of the American Political Science Association, University of California, Los Angeles, Atlanta. Treisman, D. (2000). The Causes of Corruption: A Cross-National Study. Journal of Public Economics, 76(3), 399–457. Treisman, D. (2003). Post-Communist Corruption. In N. F. Campos & J. Fidrmuc (Eds.), Political Economy of Transition and Development: Institutions, Politics and Policies (pp. 201–226). Dordrecht: Kluwer Academic Publishers. Treisman, D. (2007). What Have We Learned About the Causes of Corruption from Ten Years of Cross-national Empirical Research? Annual Review of Political Science, 10, 211–244. Truex, R. (2011). Corruption, Attitudes, and Education: Survey Evidence from Nepal. World Development, 39(7), 1133–1142. Uslaner, E. M. (2004). Trust and Corruption. In J. G. Lambsdorff, M. Taube, & M. Schramm (Eds.), The New Institutional Economics of Corruption (pp. 76– 92). London: Routledge. Van Rijckeghem, C., & Weder, B. (1997). Corruption and the Rate of Temptation: Do Low Wages in the Civil Service Cause Corruption? (International Monetary Fund Working Paper 97/73). Van Rijckeghem, C., & Weder, B. (2001). Bureaucratic Corruption and the Rate of Temptation: Do Wages in the Civil Service Affect Corruption and by How Much? Journal of Development Economics, 65(2), 307–331. Wedeman, A. (1996). Looters, Rent-scrapers, and Dividend-collectors: The Political Economy of Corruption in Zaire, South Korea, and the Philippines. Paper Presented at the 1996 Annual Meeting of the American Political Science Association, San Francisco.

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Wei, S.-J. (1997). How Taxing is Corruption on International Investors (National Bureau of Economic Research Working Paper 6030). Cambridge, MA. Weingast, B. R. (1995). The Economic Role of Political Institutions: Marketpreserving Federalism and Economic Development. Journal of Law Economics and Organization, 11(1), 1–31. Wheeler, D., & Mody, A. (1992). International Investment Location Decisions: The Case of U.S. Firms. Journal of International Economics, XXXIII, 57–76. World Bank. (1997). World Development Report 1997: The State in a Changing World. New York: Oxford University Press. World Bank. (1999). World Development Report 1999/2000 Entering the 21st Century: The Changing Development Landscape. London and New York: Oxford University Press. World Bank. (2000). Helping Countries to Combat Corruption. Progress at the World Bank Since 1997. Washington, DC: World Bank.

CHAPTER 4

Research Design, Methodology, and Data Collection

Comparative politics is among the most relevant approaches in the development and enrichment of theory in political science (Almond 1996). Comparative politics—conducting a comparison across political systems— is extremely important for understanding the significance of findings for each country. This is because its core focus is highlighting and explaining similar and/or different political features within certain units of analysis, such as states, systems, societies, and political parties. It is also useful to conduct comparisons over periods of time to assist in building a systematic relationship among the different variables under study (Silverman 1991; Hague and Harrop 2001; Lim 2006; Caramani 2014; Keman 2014). In that sense, this book is primarily comparative, aiming to explain the different causes of corruption in fifteen Arab countries in the MENA region. Comparing across the countries would, first, enhance theoretical knowledge on the causes of corruption, and second, assist in empirically observing and explaining the causes of corruption across these fifteen countries (the units of analysis in this book). The book relies on the casestudy method, analyzing each case on its own and comparing the variation in corruption levels over time within each case. The structured focused comparison method is followed in order to provide more precision and a systematic layout for comparing the cases. The Most Similar Systems Design (MSSD) is employed primarily to select the cases—to enable

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design of the comparative analysis and to understand the causal relationships between corruption and the different variables. The first section of this chapter discusses the case-study method, the second explains the structured focused comparison method, the third highlights the Most Similar Systems Design, and the fourth underlines the research design and data collection, and explains the indicators employed to conduct the analysis.

1

Case-Study Method

The case-study method is an appropriate approach for studying complex social phenomena through in-depth, comprehensive analysis. While there has been much controversy regarding its strength and ability to reach reliable and consistent findings, the case-study method has received a lot of attention in social sciences. Defining the case-study method as a research tool, Yin (1984: 23) states that it is: an empirical inquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used.

The case study has many variations and several applications, among which are explaining causal links in real events (that are too complex to be grasped through experiments or surveys), describing an incident within its real setting, and illustrating specific issues in a descriptive manner, where there is no evident or specific outcome (Yin 2009). The purpose of a case study is to explain the conditions and circumstances surrounding the phenomenon, reach a clear understanding, and maybe in certain contexts clarify causal relationships (McCutchein and Meredith 1993). Sommer and Sommer (1991) viewed the case study as a profound empirical method that enables comprehensive analysis of a specific issue. Despite being criticized for their weakness in reaching generalizations, case studies provide in-depth investigation and analysis. Similarly, Hartley (1994) regarded them as aiming to explain the complex dynamic processes under which a phenomenon takes place. Lee et al. (1999) noted that this kind of research, using deep examination and focus on each case, could draw causal relationships from the cases.

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Stake (2000) stated that case studies are “useful in the study of human affairs because they are down-to-earth and attention holding” (Stake 2000: 19), and asserted that these case studies assist policymakers in broadening their experience. According to Yin, the case study can “contribute uniquely to our knowledge of individual, organizational, social and political phenomenon” (Yin 1984: 14). This book depends on the case-study method as it helps to understand and explain complicated social issues—like corruption—that need much observation and thorough examination, especially when quantitative means are limited. In this connection, Yin (2003) made it clear that the main aim of case studies is to reach analytical generalizations rather than statistical ones, since the cases are more humanistic in nature. In line with this, Stake (2000) noted that this method gives a clear view of the phenomenon and hence extends knowledge, taking on the role of an interpreter. In this way, this book undertakes single longitudinal case studies, followed by multiple case studies, in which a cross-national comparison offers explanations of the relevant causes of corruption in the MENA region countries (1999–2010) and attempts to reach generalizations that might be valid for other cases.

2

Structured Focused Comparison Method

In order to achieve a systematic analysis for the fifteen countries in the MENA region, the structured focused comparison method is employed to better align the questions addressed, the relevant variables, and the data across all the cases. Political scientists like Van Evera (1997) have recognized the advantages of following this method when conducting qualitative research. The studies by George et al. (1971), George and Simons (1994) and Krepon and Caldwell (1991) in international relations have often been cited as presenting the paradigm of this method (George and Bennett 2005). While George (1979a, b) provides grounds for this tool to be employed in studying historical events, its application for real-world events sometimes falls short of offering analytical clarity. Haney (1997) later developed the method by following surveys on cases to integrate both the structured focused comparison and the large-N analysis. A precise statement of the method is given by George and Bennett (2005):

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The method is “structured” in that the researcher writes general questions that reflect the research objective and that these questions are asked of each case under study to guide and standardize data collection, thereby making systematic comparison and cumulation of the findings of the cases possible. The method is “focused” in that it deals only with certain aspects of the historical cases examined. The requirements for structure and focus apply equally to individual cases since they may later be joined by additional cases. (George and Bennett 2005: 67)

First, the method is ‘structured’ based on the logic that the research objective is clear, with a set of general questions to standardize the data collection, guide the researcher throughout the analysis of each case, accumulate findings, and enable a systematic comparison across the cases. Second, the method is ‘focused’ as it only studies specific aspects of the cases. This necessitates having a precise theoretical framework as well as identifying which data are necessary for the analysis. Thus, the method is based on identifying the research problem, the variables to be analyzed, and the appropriate cases (multiple cases or different aspects within a single case). It requires questions to be developed that are standard for all the cases under study, reflecting clearly the objectives of the research and the theoretical focus. The primary goal is to enhance the information acquired and align the cases to be able to explain the effect of specific variables. The method tries to combine qualitative research methods with systematic analysis, where better findings are reached within large-N studies. Nevertheless, the structured focused comparison method offers a relevant tool in studies that involve in-depth analysis of a small number of cases, combining logic and qualitative analysis. However, the results are not always guaranteed to be clear, as the choice of cases or variables can lead to ambiguous outcomes. Moreover, an in-depth analysis of some cases hinders alignment and consistency, leading to poor findings. This can be due to the analysis of intermingled variables/factors in a complicated phenomenon, the analysis of small-N cases, or the absence of appropriate information. In a nutshell, this book uses the pillars of the structured focused comparison method to address the causes of corruption across the different countries in the MENA region by following a single scheme of analysis throughout the whole book. This method helps to clarify the most significant variables and important outcomes across the fifteen countries from a systematic analytical perspective.

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The Most Similar Systems Design

Comparative politics uses several methods and research designs (Keman 2014). Mill’s method of comparison presents the basis for the crosscomparison of the cases in two regions in this book, the Gulf and North Africa. Following Mill’s efforts, Przeworski and Teune (1970) initiated research designs to assist in selecting cases for comparative studies: the Most Similar Systems Design and the Most Different Systems Design. The two designs are developed largely along the same lines as Mill’s Method of Agreement and Method of Difference. Mill’s Methods are based on the idea of interpreting the similarities and differences among the cases under study as well as the variables in order to establish a logical causal relationship between the dependent and independent variables. The Method of Difference works by comparing cases that differ with regard to the dependent or independent variable but are similar across other features and variables. The Method of Agreement works the other way, comparing cases that are similar with regard to the dependent or independent variable but differ on other levels. The Most Similar Systems Design focuses on conducting comparative analysis of similar cases to explain the different outcomes and the variation across the cases, while the Most Different Systems Design looks at very different cases, focusing on outcomes for a certain topic or phenomenon that are similar across the cases (Peters 1998; Lim 2006; Caramani 2014). This book uses the Most Similar Systems Design as an initial step for grouping the fifteen cases, the basis of a blueprint for conducting a structured, systematic, and comparative analysis for the MENA countries. According to this design, the six Gulf countries and the five North African countries share general common features with regard to their cultural, historical, political, and social settings, but differences between them are reflected in their dissimilar corruption levels over the years. This indicates that analyzing the different variables in association with corruption within those countries might help improve understanding of the causes of this phenomenon. The Method of Difference helps to answer the questions addressed in this book by determining the variation in the underlying causes of corruption, especially across the Gulf and North African countries.

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4

Data Collection

Data for this book was collected from international indices, constitutions, country-specific reports, and expert interviews. First, indices published by international organizations like the World Bank, Transparency International, the United Nations, the Varieties of Democracy (V-Dem) project, Freedom House, the Heritage Foundation, and Reporters without Borders were used. Several indicators were employed to understand the independent variables pertinent to corruption. To operationalize corruption levels across the countries under study, the Corruption Perception Index (CPI) by Transparency International presented the baseline for determining corruption levels in these countries. This index is principally compiled from surveys that seek to record the public’s perceptions of the level and degree of corruption in their own countries. Other data sets by the World Bank, UN, and V-Dem encompass indicators used for analysis within each country. The political indicators include Polity IV, which classifies regimes on a scale between full democracy and failed/occupied states. The rule of law variable is measured by two V-Dem indicators, civil liberties and judicial constraints on the executive. The political rights variable uses the Freedom House Political Rights Index. The freedom of press variable is operationalized through the Reporters Without Borders Press Freedom Index, which measures the extent of freedom enjoyed by journalists and how far governments respect and ensure this freedom. Generally, the political indicators used to operationalize the three variables are precise to a great extent in reflecting the variables. This, in turn, helps to give a better view of the political background of the countries under study. Nevertheless, the economic indicators do not accurately mirror the variables. The quality of regulation variable is measured by the Heritage Foundation Economic Freedom Index. Among the many indicators included in this index, the most convincing one for measuring the quality of regulation is the ‘business freedom’ component within the regulatory efficiency indicator, which looks at how efficiently the government regulates the business sector. The state ownership of the economy index by V-Dem has been used to give a view on how far the government

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is controlling the main sectors of the economy.1 The economic openness variable is measured through membership of the WTO as well as the Heritage Foundation Economic Freedom Index, in which the ‘trade freedom’ component of the open markets indicator was suitable for measuring openness within a country. The natural resource endowments variable is measured by total natural resources rents as a percentage of GDP. Although this was the most convenient indicator, it was not accurate enough to illustrate the variable. The development variables included the UNDP Human Development Index and the World Bank country classifications which give an overview of the general status of the countries under study, enabling a better understanding of the societal aspects of each one. The book used World Bank data to analyze income inequality, poverty rates, literacy rates, and women’s empowerment.2 Income inequality is measured through the GINI index. Women’s empowerment is measured through two indicators: the percentage of women in the labor force and the proportion of seats held by women in the national parliament. Neither indicator strictly represents the variable, although they show how far women are actively engaged in society.3 The data have been derived for the fifteen countries during the years 1999–2010. There have been minor changes to the different indicators over the years for most of the countries. However, the longitudinal study helped to reach some conclusions regarding positive/negative relationships between the different independent variables and corruption within the countries. It also contributed to the general overview of corruption trends in the countries under study. Therefore, in many cases averages have been calculated from the twelve years for the indicators that witnessed fewer variations during the whole period of study. It is worth highlighting that data derived from the indices have not always measured the independent variables precisely. However, they were the most adequate and suitable of the data sets available to assist in the analysis 1 The state ownership of the economy indicator is not illustrated on a graph as the

scores did not change over the years for most of the countries. 2 Data on poverty rates, income inequality, and literacy rates are discussed without being displayed on graphs, as these are available for only a few years in a limited number of countries. 3 Women’s empowerment indicators are discussed without being displayed in graphs, as the percentages did not show much variation.

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of the phenomenon. Moreover, the availability of data for the different variables is not the same for all countries. Annex 1 presents the independent variables (discussed in Chapter 3) that use data from different international indices in order to operationalize the variables in relation to corruption. This operationalization of variables helps analyze corruption in each case on a longitudinal basis, and later on assists with the systematic comparative analysis for the MENA region countries. The annex presents the detailed analytical framework, including the specific variables, an explanation of each indicator employed, and scale/index meanings. In Annex 2, each country has a separate table encompassing the data for all the indicators over the period of study (1999–2010), and within each case study two graphs reflecting the data are presented. Second, viewing the constitutions of the countries under study gave a preliminary view of the extent of the authorities within the countries, the different rights and duties of the population, and a general view of the system. Third, country-specific reports and studies published mainly by international organizations (Polity IV project, Bertelsmann country reports, and GAN Business Anti-Corruption country reports) gave concise information on each country. Publications available at national level in the MENA region countries are generally less reliable. Fourth, expert interviews were conducted for each of the countries under study. These interviews aimed to offer a better understanding of the phenomenon within the society, verify the data, add another perspective to the book, and provide a deeper and more realistic exploration of each country. The need for local experts to offer a country-specific overview of the causes of corruption was vital; interviewees live in the respective country, witness day-to-day incidences of corruption and, as a result, are aware of the corruption intensity in their own societies. For each country, there were two main intensive semi-structured interviews, one with an academic and the other with a public official. Some experts were re-interviewed, and new ones were also interviewed at a later stage in an attempt to improve the analysis of some outcomes and/or to obtain specific information and knowledge when the author lacked access to data. Both face-to-face and virtual interviews were conducted. The interviewees, many of whom occupy high-profile positions in their respective countries, are intentionally anonymous due to the sensitivity of the topic, which cannot be discussed in almost all the countries in the region. The total number of interviewees from the fifteen countries

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under study is 37, and most of the interviews took place between 2016 and 2019.4 Conducting interviews with academics and experts who are Gulf nationals was challenging due to the sensitivity of this topic. Even the institutions working in this area are affiliated to the government, and making contact with these officials was not possible. Therefore, interviews were conducted with ‘non-national’ Arab academics and experts who are familiar with the topic through living and working in those countries.

5

Concluding Remarks

The literature reviewed in Chapter 3 assisted the author to comprehend and interpret the relationship between corruption as a dependent variable and the ten other political, economic, and social variables that represent the independent variables. The case-study method guides the systematic empirical analysis of the phenomenon of corruption within each country on a longitudinal basis. It aims to analyze and interpret the causes of corruption in the MENA region countries. These interpretations are followed by a systematic cross-national comparison across the region. This approach assisted in developing a comprehensive perspective on the causes of corruption within the MENA region. Using the Method of Difference to classify the case studies offered a better understanding of corruption and the variables causing it in the cases under study. Additionally, the operationalization of the variables is demonstrated by using data derived from the different international organizations as the indicators. The empirical analysis is deepened through the expert interviews, which allowed for more careful and thorough explanations of the causes of corruption in the individual case studies. In summary, this empirical research is conducted according to the structured focused comparison method and uses the Most Similar Systems Design to systematically conduct cross-national comparison of the fifteen countries in the MENA region.

4 A numbered list of the anonymous interviews appears in Annex 3.

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References Almond, G. A. (1996). Political Science: The History of the Discipline. A New Handbook of Political Science, 75–82, 50. Caramani, D. (2014). Comparative Politics (3rd ed.). New York: Oxford University Press. George, A. L. (1979a). Case Studies and Theory Development: The Method of Structured, Focused Comparison. In P. G. Lauren (Ed.), Diplomacy: New approaches in History, Theory, and Policy (pp. 43–68). New York: Free Press. George, A. L. (1979b). The Causal Nexus Between Cognitive Beliefs and Decision-Making Behavior. In L. Falkowski (Ed.), Psychological Models in International Politics (pp. 95–124). Boulder, CO: Westview Press. George, A. L., & Bennett, A. (2005). Case Studies and Theory Development in the Social Sciences. Cambridge: MIT Press. George, A. L., Hall, D. K., & Simons, W. E. (1971). The Limits of Coercive Diplomacy: Laos, Cuba, Vietnam. Boston: Little, Brown and Company. George, A. L., & Simons, W. E. (1994). The Limits of Coercive Diplomacy. Boulder: Westview Press. Hague, R., & Harrop, M. (2001). Comparative Government and Politics: An Introduction (5th ed.). New York: Palgrave. Haney, P. J. (1997). Organizing for Foreign Policy Crisis. Ann Arbor, MI: University of Michigan Press. Hartley, J. F. (1994). Case Studies in Organizational Research. In C. Cassell & G. Symon (Eds.), Qualitative Methods in Organizational Research (pp. 208– 229). Newbury Park, CA: Sage. Keman, H. (2014). Comparative Research Methods. In D. Caramani (Ed.), Comparative Politics (3rd ed., pp. 47–58). Oxford: Oxford University Press. Krepon, M., & Caldwell, D. (1991). The Politics of Arms Control Treaty Ratification. New York: Palgrave Macmillan. Lee, T. W., Mitchell, T. R., & Sablynski, C. J. (1999). Qualitative Research in Organizational and Vocational Psychology, 1979–1999. Journal of Vocational Behavior, 55(2), 161–187. Lim, T. C. (2006). Doing Comparative Politics: An Introduction to Approaches and Issues. Boulder: Lynne Rienner Publishers. McCutcheon, D. M., & Meredith, J. R. (1993). Conducting Case Study Research in Operations Management. Journal of Operations Management, 11(3), 239–256. Peters, B. G. (1998). Comparative Politics: Theory and Methods. New York: Palgrave. Przeworski, A., & Teune, H. (1970). The Logic of Comparative Social Inquiry (p. 94). New York: Wiley-Interscience. Silverman, L. (1991). Beyond the Micro/Macro Distinction. European Journal of Political Research, 19(4), 375–397.

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Sommer, B. B., & Sommer, R. (1991). A Practical Guide to Behavioral Research: Tools and Techniques. New York: Oxford University Press. Stake, R. E. (2000). The Case Study Method in Social Inquiry. In R. Gomm, M. Hammersley, & P. Foster (Eds.), Case Study Method: Key Issues, Key Texts (pp. 20–26). London: Sage. Stake, R. E. (2008). Qualitative Case Studies. In N. K. Denzin & Y. S. Lincoln (Eds.), Strategies of Qualitative Inquiry (Vol. 2, pp. 119–149). Los Angeles: Sage. Van Evera, S. (1997). Guide to Methods for Students of Political Science. Ithaca: Cornell University Press. Yin, R. K. (1984). Case Study Research: Design and Methods. Beverly Hills, CA: Sage. Yin, R. K. (2003). Case Study Research: Design and Methods. Thousand Oaks, CA: Sage. Yin, R. K. (2009). Case Study Research: Design and Methods. Thousand Oaks, CA: Sage.

CHAPTER 5

The MENA Region: Unique Features and Sustained Regimes

As a starting point, a region is basically defined through the main characteristics of its geography and culture. The MENA region is an exception, however, as its countries are outlined differently, depending on the purpose of analysis and/or the political stances of the international community. Generally, it is composed of countries of the League of Arab States (Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, North Sudan, South Sudan, Syria, Tunisia, United Arab Emirates, and Yemen), Iran, Israel, and Turkey. Other definitions expand the region to include Pakistan and Afghanistan, in addition to some countries in the Asian continent. However, some restrict the MENA region to encompass a small number of countries, namely Egypt, Syria, Palestine, Israel, Lebanon, and Jordan (El-Erian and Fischer 1996; Angrist 2010; McKee et al. 2017). International organizations such as the International Monetary Fund (IMF) have several country groups for the region. These comprise the Middle East, North Africa, Afghanistan and Pakistan (MENAP), the Middle East and North Africa (MENA), the Gulf Cooperation Council (GCC), the Arab World, the Maghreb, the Mashreq, and North Africa. In the World Bank’s geographical scope of work classification, the MENA region comprises nineteen countries. In this sense, the MENA cannot be rigidly defined as a ‘region’; it includes diverse groups

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of countries under its umbrella, reflecting vast landscapes with no clear-cut classification. Therefore, it is crucial to clarify the selection of countries within this book, which confines the MENA region to fifteen Arab countries. These are Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, and Yemen. These countries are chosen because they share common political, economic, and societal characteristics, with a high resemblance of certain features during the period of study. Generally speaking, these countries have similar history and traditions; the majority speak one language and adhere to Islam (Ayubi 1995; Gasiorowski and Yom 2017; Goldschmidt and Al-Marashi 2018). Other Arab countries are not included in this book since their settings do not align with the prevailing patterns and trends in the countries mentioned above, which would not allow for systematic analysis and comparison. To serve the aim of this book, the fifteen countries are classified into three sub-regions (the GCC countries, the North African countries, and the Mashreq countries plus Yemen).1 The key reason for these geographical groupings is the political and socio-economic resemblances between the countries in each group, which helps in conducting a systematic comparison across each group of countries following analysis of corruption in each country within the region.2 1 Yemen is a standalone country in this book for two reasons. On one hand, it belongs geographically to the Gulf region but there is a huge difference between it and the six GCC members’ systems, presenting an obstacle to systematic comparison across the region. Thus, for pragmatic reasons, Yemen is excluded from analysis with the first regional group, as its political and socio-economic profile is different from those of the homogeneous monarchy GCC member states. Yemen is included in the third group (Mashreq countries and Yemen), as it displays a few comparable features to the three countries in the region. On the other hand, it is important not to exclude Yemen from the book, first, because it belongs to the Arab and MENA regions according to the different definitions and literature mentioned in this book. Second, scholars focusing on the MENA region—as well as international organizations (IMF, TI, UN, World Bank) analyzing and reporting on the region—do include Yemen. Third, it is crucial to analyze corruption in Yemen prior to the January 27, 2011 uprising in Sanaa to comprehend the scene before the drastic changes that took place in the country. 2 As mentioned earlier (see Chapter 4), the Most Similar Systems Design was used to conduct comparisons between countries in the Gulf and North Africa regions, while in the Mashreq countries plus Yemen this design was not strictly followed due to the variances exposed. Adopting the Most Similar Systems Design helps to locate variations

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Fig. 1 Map of the MENA region

The heat map (Fig. 1), which reflects the different intensities of corruption in the MENA countries, is compiled by the author based on the Corruption Perception Index (CPI) rankings for the years under study (1999–2010). Qatar and UAE are the least corrupt countries followed by Oman, Bahrain, Jordan, Kuwait, Tunisia, Saudi Arabia, Morocco, Egypt, Algeria, Lebanon, Syria, and Yemen, respectively. It is worth highlighting that no drastic variations have taken place over the years in these countries’ corruption levels. Despite many anti-corruption efforts within the region, none has addressed the root causes of corruption in its societies. There has been limited research on corruption in the MENA region, where it remains a central issue and poses a challenge as it undermines legitimacy, hinders resources, and affects institutions and the delivery of services to the population. During the period of this study (1999–2010), there was no dramatic progress in curbing corruption in the MENA countries, and this is reflected in their performance on the CPI during those years. This book therefore aims at exploring an untapped critical theme in the region before the uprisings took place. While the outcomes of this book are not conclusive, they nevertheless explore the distinct features of corruption within the countries of the MENA region. Geography and culture do not always reflect the extent of integration and cooperation among the countries within any region. Despite the common features among the MENA countries and their strategic location, less has been accomplished in this respect compared to other in the causes of corruption among countries under study that share similar political and socio-economic features while experiencing different levels of corruption.

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regions of the world, for example, the European Union or the Association of Southeast Asian Nations (ASEAN). Efforts by the international community to encourage cooperation between the countries of the region after World War II were not very fruitful either economically or politically (El-Erian and Fischer 1996; McKee et al. 2017). Despite the establishment of the Arab League and the GCC, limited progress and collaboration have been realized among these countries in terms of benefiting from being in one region, with clear geographical lines plus shared interests (Hoekman and Sekkat 2010). The countries of the region have missed opportunities for economic gains, collective political action, and non-economic benefits such as security, conflict resolution, cultural and educational cooperation. These include, but are not limited to, political coordination on critical issues, investment benefits, trade facilities (especially with their comparative advantage of access to the Red Sea, Mediterranean Sea and the Suez Canal), exchange of expertise through policy transfer, educational cooperation, tourism, labor organization, political and strategic collaboration, and general agreements on global public goods, all of which could have enhanced relations between the MENA countries. An important element that could have facilitated this cooperation is the prevailing culture and language in the region, which would facilitate establishment of a solid union offering mutual benefits in a multilateral context.

1

Regime Characteristics

A unique feature of the MENA region is that most of its countries have retained some of their traditional aspects combined with modern institutions. Tribes, which were the central political actors dominating the territories, continued to exist after the colonial era, maintaining their political and economic roles within the modern settings of the nationstates (Barkat 2000). Riggs (1964) argued that Arab countries are hybrid societies featuring old and modern patterns. Although modernity has found its way into the MENA region, the traditional features were not swept away. Tribes have maintained their legitimacy by institutionalizing their status and power in many of the countries under study (Hammoudi 2000). In other words, the original tribal identity managed to maintain its functions, power, and the loyalty of its clans in the face of successive waves of globalization and democratization, transforming social settings into

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political structures (Ibrahim 1982; Sharabi 1987; Alwafi 1995; Barkat 2000; Hijazi 2006; Sidani and Thornberry 2013). Another feature of the region is the colonial history of a number of its countries, which has affected the structures of their systems. In the postcolonial era they developed non-identical regime structures and political systems. However, all of them—except Lebanon—have been ruled by authoritarian regimes that maintained their power unaltered for long periods. Republics in the region (Algeria, Egypt, Libya, Syria, Tunisia, and Yemen) have been headed by strong presidents, most of whom had military backgrounds. They consolidated their power through the armed forces and a single ruling party, which ensured an insignificant role for opposition parties in the political arena. Similarly, monarchies in the region (Bahrain, Jordan, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, and UAE) have maintained their rule using tools which are similar to those used by the presidents, controlling the armed forces and dominating the political scene through members of the royal family while limiting political participation. In that sense, the governments of the MENA region have used more or less similar methods to maintain control over the different bureaucratic state institutions (Kamrava 1998; Looney 2005; Rothstein and Broms 2011; Drine 2012; MacQueen 2013; Youssef 2014). Consequently, both legislative and judicial authorities have been powerless on many occasions due to the vast powers invested in the executive branch. Even though some regimes were compelled to appear more democratic under American pressure with the 9/11 democracy wave— either introducing elections into their systems or making their existing elections seem open and free compared to previous years—none of these countries can be considered truly democratic. With illiberal democracy prevailing within the majority of these countries, the governments in the region have allowed limited liberalization with strong surveillance of political parties and opposition groups (Lust-Okar 2004; El-Ghobashy 2010). The MENA countries have nevertheless varied in regard to political competition, political inequality, and constraints on political participation. In some of its countries (Libya, Oman, Qatar, Saudi Arabia, Syria, and UAE), political competition was not allowed and opposition was restricted. Other countries have accepted limited opposition participation in elections, while excluding certain groups from the political scene (Algeria, Bahrain, Egypt, Kuwait, Morocco, and Tunisia). Another set

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of countries have allowed all political groups to compete and take part in elections (Lebanon, Jordan, and Yemen). However, both Jordan and Yemen allowed competition for legislative elections only, while the head of state could not be voted out of office and was not subject to competition (Lust-Okar 2004; El-Ghobashy 2010). An integral dimension of these regimes has been an inactive civil society, or at times a civil society that was active in certain areas but could not challenge the stability of the regime. Civil society, labor unions, and associations have had little autonomy to act and influence the political or economic decisions of the government, having been mostly constrained by legal powers of the state or by actual harassment of their activities (Carapico 2010). Freedom of expression is a significant factor mobilizing civil society towards any chances of change, but most of the MENA countries have failed to allow freedom of the press, with governments suppressing views critical of their performance. The executives were thus not accountable to their populations who were, to a great extent, oppressed and have experienced years of static governmental structures. The tribal system and the policies and measures inherited from it are largely outdated and incompetent, and good governance over the different levels of the administration in many of the MENA countries has been nonexistent during the period of study. The roots and persistence of corruption therefore remained high across several countries in the region, together with the absence of any democratic characteristics that could have empowered the masses (Kamrava 1998; Looney 2005; Rothstein and Broms 2011; Drine 2012; MacQueen 2013; Youssef 2014).

2

Role of Government in the Economy

Among the causes of the uprisings in several countries across the Arab world, corruption stands out as a central issue. With the ruling elites controlling the main sectors in their economies, the general population felt deprived of all the economic gains of the country (Achcar 2013). This has created social unrest and dissatisfaction with the whole system and its structures, leading people to head to the streets to voice their demands. During the period of study (1999–2010), the regimes in the region maintained their centralized power by relying on economic policies that brought enormous privileges to the leaders and their supporters. Most of the economic sectors in the region were controlled by the ruling

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elites, who benefited from resources, investments, and economic activities, notably because monopolies and unfair economic practices prevailed among many of the countries in the region with varying intensities. Furthermore, many of these countries’ governments also lacked efficient institutions and mechanisms that could appropriately exploit their natural and human resources. Although most of the MENA region countries are resource-rich, several have relied heavily on development aid. The region is generally considered a highly aid-dependent region (Rivlin 2009), due to governments’ failure to manage their resources properly and allocate them fairly. The MENA countries have also gone through periods of economic growth and stagnation. The majority are developing countries facing obstacles to growth and incapable of maintaining a significant role in the globalized economy. Many countries in the region have negotiated trade agreements, mainly with the US and the EU, in order to become active participants in the global market. This has had different—but limited—outcomes among the countries of the region. In line with that, the majority of the MENA countries are members of the WTO, while a few had observer status or were in the accession phase during the period of study (Algeria, Libya, Syria, Lebanon, and Yemen). The integration of the MENA countries in the international economy has been impacted by the assistance of international institutions and donors, with some countries urged to develop their economic and financial policies in line with the Washington Consensus (Morocco and Tunisia). Other countries, however, have resisted such reforms, sustaining their own economic structures and financial institutions (Egypt and Syria). Nevertheless, the oil-exporting countries have benefited greatly from their integration in the world economy (Hoekman and Sekkat 2010; Moore 2010; Gause III 2010; Kaufmann and Fellow 2011; MacQueen 2013; Emara and Jhonsa 2014). The MENA region’s openness to the international world—membership of international organizations, signing various UN conventions, and committing to international cooperation agreements—has not been clearly reflected on the ground in many of its countries. These steps towards opening up their economies have validated their acceptance of official international norms, while in reality many have been far from being economically open and competitive (Hoekman and Sekkat 2010; Moore 2010; Gause III 2010; Kaufmann and Fellow 2011; MacQueen 2013; Emara and Jhonsa 2014).

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3

Development and Society

The tribal theme is a historical, political, and social phenomenon within the MENA region. Long ago, tribes representing indigenous groups organized society across most of the region, assuming political, military, economic, and social roles within society. An integral part of this tribal system, based on family ties and blood bonds, is the social norms (A’raf )—unwritten ethical and moral codes of conduct well known to everyone (Ali 2005; Ma’atok 2017). According to Al-Wardi (2007), despite the existence of political structures and the universally declared principles of governance, the Arab world has inserted the traditional settings of tribalism and patronage into the modern political framework. Moghadam (1993), on the other hand, states that patriarchal patterns have been sustained to preserve the interests of the ruling elite. As the analysis within the case studies reveals, both these arguments hold true. As regards the development aspects of the MENA region, its countries have generally improved their provision of services over the years, but their human development rankings differ, due to their diverse economic and social circumstances. Most of the region’s countries have enjoyed high literacy rates, but the quality of the education systems varies. Income inequality and poverty rates stand at an average of 30% in the countries for which data is available, with Yemen the poorest country in the MENA region, and petty corruption has spread within countries where poverty rates and income inequality are high. Linked to this, there is broad acceptance of bribery, known as bakshish, in specific countries, mainly in North Africa and the Mashreq, where it is generally not perceived as unethical. The term originally meant a tip or small gratuity given to people such as waiters in a restaurant. However, it developed into a bribe that a civil servant in the lower levels of administration receives for speeding up a process and/or bypassing red tape and bureaucracy. These small amounts of money, a form of petty corruption, are common practice; the excuse is that it is a way of helping underpaid civil servants meet their financial obligations. Preferential treatments are widespread in the MENA region. In Arab societies, wasta originally meant ‘mediation’ in conflict or disputes between families and tribes (Kilani and Sakijha 2002; Al-Ramahi 2008). However, nowadays, it is associated with nepotism, the abuse of authority to offer benefits because of connections and ties with certain members of a family, tribe, ethnic group, or even a close circle of friends. Wasta is an

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informal, widely known practice in the region; it relies on networks to get things done more quickly, easily, and comfortably. Within some societies, it is neither considered a corrupt act nor is it an infringement of the law, even though it is used to gain specific benefits, such as getting a job, bypassing bureaucratic processes, gaining privileged access to those in power, and so on (Sidani and Thornberry 2013; Barnett et al. 2013; Osella 2014; Ramady 2016). In this sense, it is a culturally accepted practice across many societies for a person in power to offer certain privileges and benefits to their close or wide circle of family, friends, tribe, party, or any other affiliates.3 Although there is a lack of data on poverty rates and income inequality among the petro-states (the GCC countries, Libya and Algeria), another dimension of inequality prevails, namely, that the majority of the population in all these countries are non-citizen expatriates who have borne the brunt of economically developing the respective countries by being involved in the processes of growth. During the period of study, these expatriates have been less privileged, often receiving lower wages than citizens and generally enjoying fewer state services and benefits. That being said, the GCC countries enjoy the highest GDP per capita among the countries of the region, with Qatar the highest. In contrast, Yemen and Syria have had the lowest GDP per capita within the MENA region. Other standard features of the societies are Arabic as the mother tongue, the majority Muslim populations, and an inherited culture of passive obedience. The general acceptance of the leaders for who they are, and an inability to question them and, in most cases, hold them accountable, have laid the foundations for grand corruption. All the experts interviewed for this book noted this established culture of rooted obedience and submissive political attitudes. While Arabic is the mother tongue of almost all the peoples in the MENA region countries, as well as the dominant official language, other languages exist. Berber is popular in North African countries (Libya, Tunisia, Morocco, and Algeria), and it has different dialects. Kurds in Syria identify themselves by their ethnic affiliation and dialect. Despite these variations, the governments of the MENA region emphasize their Arab identity, despite the existence of other identities voicing many demands on different levels (Hudson 1977; Lust 2017). In addition, 3 This is also based on the BTI reports for the countries, expert interviews, and the author’s insights.

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Islam plays a central role in managing people’s daily lives in the majority of the MENA region countries, and is the most widely accepted slogan used to achieve the goals of the countries’ regimes. Most countries in the region define themselves as religious since Islam is mentioned in their constitutions. They embrace an Islamic identity, and many of the governments have derived their legitimacy partially from a ‘religious basis’. Some countries established their rule claiming direct descent from the prophet Muhammed (Jordan, Morocco, Saudi Arabia, Bahrain, UAE, Oman, and Kuwait). Other countries’ constitutions describe Islam as the official state religion, requiring the head of the state to be a Muslim, and state that Shari’a is the source of law (Egypt, Yemen, Syria, Libya, Algeria, and Tunisia). Nevertheless, Christians are present in the region, constituting a high percentage of the population in Lebanon, and a minority in Egypt, Jordan, and Syria. Their numbers have increased due to the Gulf region’s high reliance on foreign labor in their societies (Hudson 1977; Schwedler 2013; Lust 2017). Looking at women’s empowerment, despite the tremendous changes stemming from knowledge, technology, and waves of democracy, women around the world are still facing barriers to full access to power and active engagement in their societies. The scene is worse in the MENA region where women have been underrepresented in the political and economic structures during the period of study (1999–2010). While the MENA region countries have enacted substantial reforms to allow women to have an active role in society, much effort is needed to realize gender equality across the countries within the region. While development in the basic education of girls has been obvious during the past two decades, the region ranked very low in the 2006 Global Gender Gap Report4 (Hausmann et al. 2006). Women have been less empowered than men in the MENA region due to the persistence of traditional and cultural aspects. Tunisia is an exception in being more open with regard to women’s rights and political empowerment. Several of these points are relevant to the study of corruption in the MENA region. First, substantial literature has suggested that poor consideration of gender equality hinders a functional democratic society (Fish 2002; Inglehart and Norris 2003). Second, while addressing gender challenges in the MENA region, scholars looked at Islam as a trigger for the 4 The report analyzed the gap between men and women using economic, political, and social criteria.

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patriarchal patterns in the region that deprive women of active participation in their society (Inglehart and Norris 2003; Alexander and Welzel 2011; Welzel 2013). Third, Arab traditions of male dominance, which give men a higher profile while women are their subordinates, present a challenge for women’s empowerment (Rizzo et al. 2007). Moreover, Rizzo et al. (2007) implied that while challenges to gender equality are not themselves related to Islam, they are more evident in Arab Muslim societies, whereas non-Arab Muslim societies showed more support for women’s rights. Fish (2002: 29) argued that women are of “inferior” status in Muslim countries that perform poorly regarding gender equality, and Ross (2008) argued that this is the case in petro-states which enjoy high per-capita wealth. Several scholars have addressed the gender equality issue in association with the patriarchal phenomenon in the MENA region, whose societies are male dominated, giving men more freedom to act, which in turn creates gaps that the society cannot avoid due to its traditional cultural norms (Joseph 1996; Walby 1996; Charrad 2001, 2009; Duflo 2012; Jayachandran 2014). Other scholars reference kin-based systems in the MENA region, especially in North Africa and the GCC countries (Charrad 2001; Kemp et al. 2015; Abalkhail and Allan 2016; Alexander and Parhizkari 2018). Lewis (1961) has written on these systems, which work informally alongside the formal structures within the societies. These systems are also patriarchal, generally favoring male-dominant groups over any other persons, including women and males who belong to minority groups or other races or ethnicities. These features combined underlie everyday life in most of the MENA region countries, reflecting the nexus that contributes to the gender gap, dichotomies, and exclusion within its societies. Taking into consideration the above political, economic, and social dimensions, this book studies the causes of corruption on a case-bycase basis and analyzes the variables that are pertinent to corruption in each country over the period from 1999 until 2010. The fifteen countries are classified into three groups. Chapter 6 addresses the six GCC countries (Qatar, UAE, Oman, Kuwait, Bahrain, and Saudi Arabia). Chapter 7 focuses on five North African countries (Tunisia, Morocco, Egypt, Algeria, and Libya). Chapter 8 analyzes three of the Mashreq countries (Jordan, Syria, and Lebanon) plus Yemen. At the beginning of each chapter, the common features of each group of countries are

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highlighted. The countries are then studied individually, using the structured focused comparison method to produce a systematic analysis for the fifteen countries. A cross-national comparison of the causes of corruption is conducted for each sub-region, and concluding remarks highlight the causes of corruption across the countries within each group. In Chapter 9, a systematic cross-national comparison of the causes of corruption in all fifteen countries addresses the hypotheses and delivers outcomes.

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Inglehart, R., & Norris, P. (2003). Rising Tide: Gender Equality and Cultural Change Around the World. Cambridge and New York: Cambridge University Press. Jayachandran, S. (2014). The Roots of Gender Inequality in Developing Countries (NBER Working Paper, No. 20380). Joseph, S. (1996). Patriarchy and Development in the Arab World. Gender & Development, 4(2), 14–19. Kamrava, M. (1998). Non-Democratic States and Political Liberalization in the Middle East: A Structural Analysis. Third World Quarterly, 19(1), 63–85. Kaufmann, D., & Fellow, S. (2011). Governance and the Arab World Transition: Reflections. Global Economy and Development: Empirics and Implications for International Community. Kemp, L. J., Madsen, S. R., & Davis, J. (2015). Women in Business Leadership: A Comparative Study of Countries in the Gulf Arab States. International Journal of Cross Cultural Management, 15(2), 215–233. https://doi.org/ 10.1177/1470595815594819. Accessed April 4, 2020. Kilani, S., & Sakijha, B. (2002). Wasta: The Declared Secret. Amman: Arab Archives Institute. Lewis, I. M. (1961). A Pastoral Democracy (pp. 1–100). London: Oxford University Press. Looney, R. (2005). Profiles of Corruption in the Middle East. Journal of South Asian and Middle Eastern Studies, 28(4), 1–20. Lust, E. (Ed.). (2017). The Middle East (14th ed., pp. 160–205). Los Angeles: Sage. Lust-Okar, E. (2004). Divided They Rule: The Management and Manipulation of Political Opposition. Comparative Politics, 36(2), 159–179. Ma’atok, P. (2017). The Clash of Tribal Loyalties. Beirut: Knowledge Forum (Arabic). MacQueen, B. (2013). An Introduction to Middle East Politics. London: Sage. McKee, M., Keulertz, M., Habibi, N., Mulligan, M., & Woertz, E. (2017). Demographic and Economic Material Factors in the MENA Region. Middle East and North Africa Regional Architecture: Mapping Geopolitical Shifts, Regional Order and Domestic Transformations (MENARA) (Working Papers No. 3). Moghadam, V. (1993). Modernizing Women: Gender and Social Change in the Middle East. Boulder and London: Lynne Rienner Publishers. Moore, P. W. (2010). Political Economy. In M. P. Angrist (Ed.), Politics & Society in the Contemporary Middle East (pp. 75–98). Lynne Rienner Publishers. Osella, F. (2014). The (Im)morality of Mediation and Patronage in South India and the Gulf. In A. Piliavsky (Ed.), Patronage as Politics in South Asia (pp. 365–393). Cambridge: Cambridge University Press.

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Ramady, M. A. (Ed.). (2016). The Political Economy of Wasta: Use and Abuse of Social Capital Networking. Switzerland: Springer. Riggs, F. (1964). Administration in Developing Countries: Theory of the Prismatic Society. Boston, MA: Houghton Mifflin. Rivlin, P. (2009). Arab Economies in the Twenty-First Century. Cambridge: Cambridge University Press. Rizzo, H., Abdel-Latif, A. H., & Meyer, K. (2007). The Relationship Between Gender Equality and Democracy: A Comparison of Arab Versus Non-Arab Muslim Societies. Sociology, 41(6), 1151–1170. https://doi.org/10.1177/ 0038038507082320. Accessed April 4, 2020. Ross, M. (2008). Oil, Islam and Women. American Political Science Review, 102, 107–123. Rothstein, B., & Broms, R. (2011). Why No Democracy in the Arab MuslimWorld? The Importance of Temple Financing (APSA 2011 Annual Meeting Paper). Schwedler, J. (2013). Islamists in power? Inclusion, Moderation, and the Arab Uprisings. Middle East Development Journal, 5(1), 1350006. https://doi. org/10.1142/S1793812013500065. Accessed April 4, 2020. Sharabi, H. (1987). Neopatriarchy: A Theory of Distorted Change in Arab Society. New York: Oxford University Press. Sidani, Y., & Thornberry, J. (2013). Nepotism in the Arab World: An Institutional Theory Perspective. Business Ethics Quarterly, 23(1), 69–96. Walby, S. (1996). The ‘Declining Significance’ or the ‘Changing Forms’ of Patriarchy? In V. M. Moghadam (Ed.), Patriarchy and Development: Women’s Positions at the End of the Twentieth Century. Oxford: Oxford Scholarship Online. Welzel, C. (2013). Freedom Rising. Cambridge: Cambridge University Press. Youssef, H. (2014). The Arab League and the Rule of Law. Rule of Law and Constitution Building: The Role of Regional Organizations (pp. 33–64). Stockholm: International IDEA.

Further Reading Abdulkadir, R., & Buttorff, G. (2016). Kin-Based Values and Attitudes Toward Gender Equality in Morocco and Egypt. In M. Shalaby & V. M. Moghadam (Eds.), Empowering Women After the Arab Spring (pp. 91–118). London: Palgrave Macmillan. Al-Muslimi, F. (2016). A History of Missed Opportunities: Yemen and the GCC. Carnegie Middle East Center. https://carnegie-mec.org/diwan/ 62405. Accessed April 04–East. New York and London: I. B. Tauris. Barnett, M., & Gause, R. (1998). Caravans in Opposite Directions: Society, State and the Development of a Community in the Gulf Cooperation Council. In E.

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Adler & M. Barnett (Eds.), Security Communities (pp. 161–197). Cambridge Studies in International Relations. Cambridge: Cambridge University Press. Dalacoura, K. (2012). The 2011 Uprisings in the Arab Middle East: Political Change and Geopolitical Implications. International Affairs, 88(1), 63–79. El-Sawi, A. (2000). Symposium on Arab Parliamentary Development. Summary Report. The Lebanese Center for Policy Studies. Beirut, 1618 May 2000. https://www.lcps-lebanon.org/activities/1323943921-Sympos ium%20on%20Arab%20Parliamentary%20Development.pdf. Accessed April 4, 2020. Gasiorowski, M., & Yom, S. L. (Eds). (2017). The Government and Politics of the Middle East and North Africa (8th ed.). Boulder: Westview Press. Goldschmidt, A., Jr., & Al-Marashi, I. (2018). A Concise History of the Middle East (12th ed.). New York: Routledge. Kubbe, I., & Varraich, A. (Eds.). (2020). Corruption and Informal Practices in the Middle East and North Africa. London: Routledge. Moghadam, V. M. (2004). Patriarchy in Transition: Women and the Changing Family in the Middle East. Journal of Comparative Family Studies, 35(2), 137–162. Stensöta, H. O., Wängnerud, L., & Agerberg, M. (2015). Why Women In Encompassing Welfare States Punish Corrupt Political Parties. In C. Dahlström & L. Wängnerud (Eds.), Elites, Institutions and the Quality of Government (pp. 245–262). London: Palgrave Macmillan. UNDP. (2004). Arab Human Development Report 2004: Towards Freedom in the Arab World. UNDP Regional Bureau for Arab States. http://hdr.undp.org/ sites/default/files/rbas_ahdr2004_en.pdf. Accessed April 4, 2020.

CHAPTER 6

Corruption in the Gulf Region: A Black Box

The Gulf countries share not only geographical location, but also political and socio-economic features. This group, comprising six countries— Qatar, UAE, Oman, Kuwait, Bahrain, and Saudi Arabia—generally scores better with regard to corruption levels than the rest of the MENA region countries over the period of study (1999–2010). Qatar and the UAE are the ‘cleanest’ among the six, followed by Oman, Bahrain, Kuwait, then Saudi Arabia, respectively (Fig. 1).1 The Gulf countries have very similar political features, since they are all traditional hereditary patriarchal monarchies. Since their independence, the Gulf countries have been ruled through their royal families. Members of the ruling families and the major tribes are appointed to all the highlevel positions and are the main actors in the political and economic scenes. To guarantee the ruling families’ legitimacy and authority, the interests of the big tribes and clans in each of those countries are taken into consideration in the policy-making process, with consensus reached on critical decisions. This has given scope for nepotism and favoritism to flourish in the political decision-making process, where the interests of the ruling elite and its close circles have been very much preserved. There have been limited channels for the political participation of citizens, 1 This is based on the author’s compiled data on corruption, relying on the CPI for the years under study.

© The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_6

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Fig. 1 Map of the Gulf region

which occurs mainly through traditional means2 (Segal 2012; Chay 2016; Weiner 2016). Civil freedoms are widely restricted and political parties have been banned in the Gulf countries, although in Kuwait and Bahrain they have an informal presence. The countries in this group are defined by many researchers as ‘rentier states’, their richness in natural endowments offering a substitute for democracy. They enjoy relatively high levels of economic and human development along with well-established infrastructure. Their significant oil resources are responsive to the people’s economic demands (state benefits, secure jobs in the public sector, and no income taxes) (Beblawi 1987). In return, the ruling families have strengthened their authority, secured their rule, and prevented any chance of democratic development for the politically passive populations, who are neither interested nor have the freedom to voice their demands and influence their governments’ decisions. Consequently, the Gulf regimes are categorized as ‘autocratic’, scoring between −10 and −7 according to Polity IV, and ranked ‘not free’ according to the political rights index of Freedom House. Only Kuwait is categorized as ‘partially free’ for the years under study (see Annex 2). The most significant economic aspect of these countries is their richness in natural resources. In 1981 the Gulf Cooperation Council was established, with the primary aim of enhancing economic coordination as well as political and cultural cooperation. The six countries are members 2 The traditional means are gatherings in a house for intellectual exchange about public affairs, called diwaniyya or majilis. This is regarded as a cultural institution that takes the place of formal party organization.

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of WTO, and are open to international trade, relying on oil exports as the main source of income for their governments. The oil and gas sectors are under full state control with a clear government monopoly, and the ruling families, along with the major tribes in the Gulf region, have had significant roles and shares in the different economic activities. Widespread favoritism and preferential treatment are seen in administrative decisions related to procurement processes in the business sector, because the ruling families directly or indirectly own entire industries and companies.3 Regarding the development status of this region, the six Gulf countries figured among the high-income countries in 2010. Citizens enjoy good services, many are offered a good education, and literacy rates exceed 95%. The Gulf region has the highest GDP per capita of the MENA region countries, due to its countries’ oil richness and small populations. The data for poverty rates and income inequality was absent for the six countries, so the analysis relied mainly on the available information as well as expert interviews. Nevertheless, social inequality is found in the societies of the Gulf countries when the composition of their populations is examined. Non-nationals generally make up more than 50% of the inhabitants, yet they do not enjoy any privileges compared to the citizens. Nationals in the six countries have the right to get a job in the public sector and their financial well-being is secured by the government due to their countries’ wealth, which in effect contributes to the high income of citizens, who thus do not get involved in illegal acts such as bribery. Non-citizens, who receive no social benefits from the government, generally refrain from corrupt acts for fear of losing their jobs and being deported. Petty corruption is therefore not rampant in the Gulf region.4 On a general note, patronage has been widespread, and is especially obvious within the higher levels of society across the Gulf region. The appointment of family members to posts in the government and state-run institutions has been the norm, and preferential treatment for tribal connections has determined the profile of the cabinet, rather than ability and professionalism. With tribes an integral part of the Gulf societies, the traditional reliance on tribal ties in running state affairs has led 3 This is confirmed by expert interviews and stated in the GAN Integrity Reports on corruption in those countries. 4 This has been stated during the Gulf expert interviews. In Oman and Saudi Arabia petty corruption took place, still, it was not widespread compared to other countries in the region.

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to widespread acceptance of favoritism and nepotism; hence, preferential treatment is not regarded as unethical. Although there are some similarities among the Gulf monarchies (nondemocratic regimes, lack of political competition, monopoly access to and allocation of natural resource revenues by the ruling families, and high levels of human development), they vary in several respects, and each has displayed different levels of corruption. The following sections provide in-depth systematic analysis of the causes of corruption in each of the six countries.

1 1.1

Qatar

Regime Characteristics

Qatar declared its independence in 1971, becoming a modern state under the absolute hereditary monarchy of the Al Thani family. The family has ruled the country for decades, historically controlling state institutions and drawing boundaries within the country based on its tribal territories. Sheikh Hamad bin Khalifa Al Thani deposed his father in a bloodless coup d’état in 1995, ruling for eighteen years until his son Emir Tamim took over in 2013 (Fromherz 2012; Yom and Gause 2012; Henderson 2013). In 1999, Hamad formed a constitutional committee to draft a new permanent constitution and the country issued its first written constitution in 2004, after a popular referendum accepted the constitution with an overwhelming majority (96.6%). The constitution introduced a partially elected unicameral parliament, establishing a power-sharing system between the three branches of government, but reserved ultimate powers to the Emir. It has formalized several basic rights for citizens, including guaranteeing freedom of assembly, expression, and religion (Herb 2002; Barany 2013; Crystal 2017). In Qatar, the Emir enjoys absolute power over the economy, and directs domestic and foreign policy, having secured his authority based on a combination of traditional tribal codes and modern bureaucratic institutions, with the support and trust of the Al Thani family and other big families and tribes (Rathmell and Schulze 2000; Kamrava 2009). The Emir’s powers under the constitution are many (Qatar Constitution 2004: article 67) and include formulating the general policy direction of the country, supported by the cabinet, issuing and ratifying laws,

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appointing cabinet ministers, appointing and dismissing civil and military officials, pardoning prisoners, and reducing their sentences. The Emir distributes power in a top-down manner, appointing members of the Al Thani and other big families and tribal leaders to key official positions in the civil service and private companies. The cabinet’s role is to assist the Emir to execute the policies and plans already decided by him. As for the legislative authority, the Al-Shura Council is a unicameral body with a consultative function. It is entitled to approve the national budget, to draft, discuss, and propose bills for the Emir’s endorsement, and to monitor the performance of the cabinet. Two-thirds of its members are elected by direct general ballot, while the rest are appointed by the Emir (Qatar Constitution 2004: article 77). Nevertheless, the Council is a weak body unable to exercise any real legislative authority (Ehteshami and Wright 2007; Fromherz 2012). The constitution guarantees the independence of the judicial authority (Qatar Constitution 2004: articles 124, 129–131). The judicial system is generally perceived as being efficient, but has a number of controversial aspects. The Emir appoints judges after consultation with the Supreme Judiciary Council and can renew their terms without restrictions. The judicial authority is subject to executive control since the Emir issues and ratifies laws and decrees. Non-citizen judges are vulnerable to deportation, and it is widely acknowledged that cases against Qatari citizens have often been settled out of court, with no sentence passed. Even though the Emir and his cabinet are officially subject to jurisdiction of the judiciary, in reality, it is unlikely that a case can be filed against the Emir, his family, or a member of the cabinet (Rathmell and Schulz 2000; US Department of State 2011; Crystal 2017). For example, even though the constitution clearly states that ministers should not exploit their official positions for their personal benefit or that of people related to them (Qatar Constitution 2004: article 128), it is debatable how far this is implemented when it comes to questioning high-level officials (BTI: Qatar 2010). In reality, with networks dominating society, cases involving people linked to the elite have rarely made it to court, as highlighted during expert interview A1. The expert mentioned that, in 2002, the Minister of Foreign Affairs was accused of accepting an illegal payment from a British defense company, yet the investigation was abandoned. Although Qatari institutions engaged in practices of accountability, they lacked transparent infrastructures, as many official reports were not made public. In 2007,

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the National Committee for Accountability and Transparency was established, and in 2008 Qatar launched a National Strategy for Integrity and Transparency which focused on establishing processes for investigating and fighting corruption and raising awareness of it. Qatar signed the UN Convention against Corruption in 2005, ratified it in 2007, and hosted the Corruption-Free Asia Conference in 2008, demonstrating the country’s official commitment to fighting corruption. As for laws on corruption, the Qatar Penal Code (2004) criminalizes bribery, extortion, and abuse of power, but there is no clear legal framework for reporting corrupt activities. There are also no laws to protect whistleblowers and watchdogs. Non-governmental efforts to fight corruption were made illegal; Law 12 prohibited civil society from addressing corruption (Law 12 2004). Despite the significant stability of Qatari political institutions, the system of checks and balances often appeared dysfunctional throughout the study period. The legislative and judicial authorities had no powers to check or balance the powers invested in the Emir and his close circles, who only permitted the legislative body to exercise a consultative function, and even the elections remained on hold for a decade. Hence, it can be said that the political institutions in Qatar were neither representative nor liberal, due to the distribution and practice of power in Qatar and the absence of challengers to the ruling family (Fig. 2). Looking at the political indicators, Qatar is categorized as an ‘autocracy’ according to Polity IV, scoring −10 throughout the whole period of study, which is in line with the above analysis of power centralization in the hands of the Emir and his close circles (Polity IV: Qatar 2010). However, the country scores fairly well on the V-Dem indicators of judicial constraints on the executive (average 0.52) and equality of citizens before the law (0.59). The V-Dem data for Qatar suggest a negative relationship between the rule of law and the levels of corruption, even though the regime lacks any democratic characteristics, with power retained in the hands of the Emir. Regarding freedom of association and assembly in Qatar, there have been tight restrictions on civil rights and political freedoms in the country. Political parties were banned, and there was no appropriate channel for the people to participate in the decision-making process. It was not until 2004 that the government issued a labor law allowing citizens to organize trade unions and engage in collective activities (such as the right to strike). Individuals were only allowed to organize public events and demonstrations after obtaining government approval, and they were prohibited

CORRUPTION IN THE GULF REGION: A BLACK BOX

Fig. 2 Regime characteristics in Qatar

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from expressing views on certain topics like the Emir’s or his family’s legitimacy. As for civil society and interest groups, both seemed to be underdeveloped and almost completely under the regime’s control. There were no grassroots initiatives, and entities were more or less established through government or quasi-government institutions. For example, the government established a Human Rights Department in 2005 to address human trafficking and support general reforms related to human rights. The Qatar Foundation, affiliated to the ruling family, is one of the world’s richest non-government organizations, working on improving education, and the situation of women, children, and the elderly. Establishing an NGO faced many barriers, ranging from cost to red tape. Most Qatari citizens had no interest in political or social engagement because they were either associated with the Al Thani family or had profited from the country’s wealth (Johnston 2005; Blanchard 2008; The Economist 2010; Gengler and Tessler 2011; Fromherz 2012; Crystal 2017). With a score of 6, Qatar ranked as ‘not free’ in the Freedom House political rights index. This is clearly because political parties were banned, and political, professional, or civic participation in society was highly restricted. Political rights were suppressed in Qatar, but this does not suggest a relationship with corruption, although it might indicate that corruption is associated with the high-level officials who limited citizens’ engagement in politics and society and prevented them from openly voicing their rights. This was confirmed in expert interview A1 with a legal advisor to the Qatari government. Since Sheikh Hamad took office in 1995, Qatar has made progress, abolishing the country’s Ministry of Information and supporting the launch of the Al-Jazeera broadcasting channel.5 Although freedom of expression of the press and media are guaranteed by the constitution (Qatar Constitution 2004: articles 47–48), the local Qatari media have practiced ‘self-censorship’ when addressing government affairs, the ruling family, or religion. A media law of 2002 mentioned that ‘criticizing friendly governments’ could be punished. There have been several daily newspapers in Qatar, owned not by the government, but by members of the ruling family or people within their network. International newspapers, magazines, and internet content in the country have been subject to 5 This channel represented an exceptional step for Arab broadcasting across the whole region, permitting criticism and discussing sensitive political, social, and economic matters—apart from Qatari domestic issues.

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censorship, especially on issues related to politics or religion. The regime did not therefore face any kind of criticism (US Department of State 2011; Barany 2013; Crystal 2017). Although there were clear limitations on freedom of expression, Qatar scored an average of 26 for press freedom, better than most of the MENA region countries under study. The country has witnessed varying levels of press freedom, according to the Press Freedom Index, giving the impression that there was a lack of interest among the population— including journalists—who refrained from criticism of the regime which could have led to trouble with the elites. Under a regime that practiced huge controls, limiting any criticism, press freedom is not related to corruption in Qatar. The political scene in Qatar is a mixture of a non-democratic regime, absent political parties, and a lack of freedom of association and expression, but a functioning judicial authority. This implies that the relationship between the three variables of regime characteristics and corruption is controversial. The first hypothesis concerning the rule of law in Qatar shows a negative relationship between rule of law and corruption. The second hypothesis on political rights indicates an unclear causal relationship between political rights and corruption. The same applies to the third hypothesis on the freedom of expression, where the alteration in press freedom scores in the country does not correspond to the minor variation in the levels of corruption. Nevertheless, political rights and freedom of the press act as catalysts for political corruption in the country, since the regime has deprived its people of the right to actively engage in the political process and express their opinions openly. 1.2

Economic Status

During Sheikh Hamad’s rule, Qatar’s economy has witnessed strong economic performance, with growth rates increasing to reach 19.5% in 2010 and a GDP per capita among the highest in the world according to World Bank data. The Emir has implemented many reforms related to opening up the economy, facilitating doing business, competition, and trade liberalization. These included simplifying government bureaucratic procedures, offering clear access to information on regulations about business conduct, implementing efficient customs procedures for imports and exports, removing restrictions on transferring overseas profits, new laws on real estate, and procedural reforms to encourage business and

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increase investments.6 Qatari citizens are exempt from income and corporation taxes, and private company taxes were among the lowest internationally. This resulted in improvements in Qatar’s ranking in international indices; both the Global Competitiveness Index and the World Economic Forum ranked Qatar among high-performing economies worldwide (Berrebi et al. 2009; Hvidt 2011). The country is rich in natural resources, possessing the world’s thirdlargest gas reserves. The economy relies mainly on the production of oil and gas, and the state-owned Qatar Petroleum Company runs the entire oil and gas production process. There has been no legal framework governing this sector and high levels of secrecy regarding contracts with other private companies. There were no data on revenues from this sector, its management, or its monitoring and oversight mechanisms during the period of study (Crystal 2017). Natural resource rents in Qatar have been decreasing over the years, ranging from 30 to 17%, but this does not correspond to the levels of corruption over the years. Therefore, the natural resource endowments have no direct effect on the intensity of corruption in the country. Despite impressive economic growth and the support of privatization, the WTO’s 2005 report on Qatar stated that: “a competition law is absent, and the market still needs more openness and conformity with the WTO requirements” (WTO 2005). In addition, even though investments were welcomed in Qatar, the mixture of public and private ownership by the ruling family remained questionable even after all the reforms liberalizing the economy. The biggest companies have been mostly state owned, enjoying monopolistic advantages. It can be said that throughout the study, first, the state has been involved in the private sector, and the whole business environment has been managed through the ruling family and the big tribes. The Al Thani family has been deeply involved in the business sector, holding key positions in big companies (e.g., the chairman of Qatar Petroleum was the Energy Minister, who was also on the board of the Qatar Investment Authority which is in charge of domestic and foreign investments). Tribes benefited from the reform process by obtaining senior positions in most of the big companies, in order to secure their loyalty to the regime. Moreover, foreign investments in the market

6 Detailed regulations are available at the website of the Qatari Ministry of Economy and Commerce.

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have required a local partner in most sectors—apart from tourism, education, and health care—that were opened up by the government to foreign access and engagement (North and Weingast 1989; Gause 1994; Peterson 2009; Fromherz 2012; Crystal 2017). Second, there has been a lack of clear information on budget allocations, as informal networks overshadowed regulations. Public procurement processes were not transparent, with corporates generally complaining that they risked corruption in terms of preferential treatment and reliance on connections when participating in big public procurement tenders (Global Integrity Report 2009: 125). The report also mentioned that: “public officials are not subject to financial disclosure laws and the State Audit Bureau is not mandated to audit the assets of these officials” (Global Integrity Report 2009: 65). However, there were no reports of bribes or illegal payments on matters like contracting and licensing (Crystal 2004). This may be owing to the high income levels of civil servants—also emphasized in the expert interview with A2 who has worked in the public sector for the past 30 years and confirms that petty corruption is not common in society simply because both citizens and non-citizens are financially satisfied and do not need to engage in illegal activities (Fig. 3). In the absence of competition legislation, and with the ruling elite’s strong hegemony on economic activities and influence in the oil and gas industry, Qatar has not developed a proper free market. This is reflected in the state ownership of the economy indicator in the V-Dem index, where the country scores 1.94 for almost all the years under study, demonstrating that the Qatari regime controls many sectors in the economy directly or indirectly, while some are relatively free of state ownership. With implementation of better regulation, the country has scored higher over the years of study in the business freedom indicator, improving from 55 in 1999 to 73.7 in 2010. This is in line with the corruption levels perceived in the country, indicating a negative relationship between the quality of regulation and corruption. The correspondence between the two variables implies that, even though the economy has been highly controlled by the regime, the presence of regulation assisted the smooth functioning of some sectors within the economy. As for trade, Qatar became a member of the WTO in 1996 and has recorded no trade disputes throughout the study, although it has not participated in the WTO’s multilateral trade commitments and agreements. Membership of the WTO illustrates openness, and trade freedom

Fig. 3 Economic status in Qatar

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scores have been steadily increasing, indicating progress through the years. This corresponds with the levels of corruption in Qatar, with the opening up of the country to competition reflected in lower levels of corruption over the years. Based on the above review and the data from different economic indicators, the country scored generally better over the years on quality of regulation as well as economic openness. This suggests a causal relationship between these two variables and corruption. However, the government’s domination of vital activities in the economy as well as its endowments of natural resources do not correspond directly with corruption. Given that the high-level positions in all the economic institutions have been occupied by members of the ruling family and its clans, and the confidentiality practiced over government revenues and budget allocations, it can be said that this control over major activities within the economy has provided scope for grand corruption to occur. 1.3

Development Status

The country has maintained high scores on human development, averaging 0.80 over the period of study. The constitution stipulates that education “shall be a significant foundation for the progress of society” (Qatar Constitution 2004: article 25). The government has invested heavily in education throughout the past decade. As well as the University of Qatar, established in 1977, an education city comprising a number of world-class American universities was founded in the capital, Doha, in 2003. It offers good-quality education and females constitute a big percentage of the students. Increasing funds for research and development have been allocated to sponsor quality research in universities. With the investment in education, the population is offered high-quality education and literacy rates reached 96.8% in 2010. In relation to corruption, literacy rates have been high in the country, yet the quality of education has improved over the period of study, which is in line with the perception of reduced corruption levels. This indicates that literacy rates have no clear relationship with corruption, but the quality of education might have an indirect impact on the perception of lower corruption levels in Qatar. As for the equality of people before the law, the constitution guarantees equality for all, and prohibits discrimination for reasons of gender, origin,

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language, or religion (Qatar Constitution 2004: article 35).7 However, an example of discrimination is reported in the Global Integrity Report (2009), where an expatriate judge is quoted discussing the absence of cases against citizens due to the preferential treatment they often receive, with cases related to powerful families often settled out of court. The ruling family was also rarely prosecuted for corrupt activities. Prosecutors were more likely to grant bail to citizens than to non-citizens. On another note, in 2007, a government law on resolving disputes between government institutions and citizens gave civil servants the right to bring their grievances to court. This law, according to the Report, increased the independence of public-sector employees, but few would file complaints due to societal traditions and constraints on such practices. As for noncitizens, labor laws provided no protection for their rights, and there has been no minimum wage. Their presence and employment in the country depended on Qatari sponsorship, making the whole process open to abuse in terms of human rights and freedom of movement of labor, and violating the basic freedoms and rights of foreign workers, with unskilled workers often experiencing low wages and discrimination (Global Integrity Report 2009). Furthermore, even though the population in Qatar comprises a minority of citizens and a majority of expatriates (75% or more), the non-citizens who constitute the majority have been denied the wide range of free and subsidized services, leaving them feeling disconnected, lacking any state identity or means of expressing their opinions, and experiencing restrictions on their civil and economic rights (Berrebi et al. 2009; Losman 2010). Data on poverty and income inequality were missing for Qatar, as for the other Gulf countries. Income levels are very high, especially for public servants. Per-capita income8 is among the highest worldwide. Wealth is distributed among nationals and tribes in many forms, such as cash, services, and employment in public office. Consequently, Qataris have become dependent on the state to manage their lives and have been

7 Shi’a and non-Muslims were not free to practice their religions and it took several years to open up society for them to worship freely. It was not until 2008 that the first Catholic Church was established in Doha, along with other temples founded for Hindus and Buddhists. In addition, Shi’a minorities are seldom allowed to practice their religious rituals publicly. 8 According to World Bank data, GDP per-capita income in Qatar was US$93,330 in 2004 and reached US$109,930 in 2010.

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homogeneous in their attitudes towards it. Citizens enjoy good-quality health and education services, and a monthly salary averaging US$7000 along with a guaranteed job in the public sector. Considering the privileges granted to citizens and the discrimination against non-citizens who have played a big part in the development of the country, there exists a huge gap between citizens and non-citizens. However, in the absence of data, it is difficult to assume the existence of a causal relationship between corruption and poverty rates, or between corruption and income inequality. Women have witnessed some positive developments in their status compared to their traditional role. More women have started to receive a good education. Their presence on the political scene was weak during the years under study, with no female representation in the parliament and a very low percentage in the labor force (around 15%). In 2003, efforts to enhance their status in society began with the appointment of the first female Minister of Education (also a first among the Gulf countries) and the first female president of the University of Qatar. The Qatar Ladies Forum was established to enable women to gain access to various fields of endeavor in the country. In 2008, another female minister was appointed to the Ministry of Health. Nevertheless, in the 2008 Global Gender Index by the World Economic Forum, Qatar scored low (0.59), ranking 119 out of 130 (Hausmann et al. 2008). It can therefore be concluded that women’s empowerment as a variable has no clear relationship with corruption. The government moved towards economic diversity, and good-quality services and education, developing a society that witnessed increasing wealth and income. Several implications follow: first, the reforms have served to ensure the unopposed continuity of the ruling elite. Second, the regime has been achieving economic growth. Third, the country has become a key player in the region. Fourth, Qatar has maintained a score averaging 0.80 throughout the years in the Human Development Index, with a high world ranking of 33. The development indicators do not offer a clear relationship, especially in the absence of data on poverty rates and income inequality. However, looking at all the variables grouped in relation to corruption, the absence of a direct causal relationship between the political variables and corruption might be due to the fact that people are not interested in political participation, are socially satisfied with the benefits they receive from the government, and do not seek to be involved directly or indirectly in the

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state’s affairs—in line with the ‘rentier state’ concept discussed earlier. The people enjoy good-quality services and a high standard of living and are not looking for political reforms and engagement. Outcome International indices generally showed a better performance for Qatar compared to the regional averages and the other Arab countries under study. Even though the political system in Qatar has not witnessed any transformation, the adoption of a new constitution in 2004, together with economic liberalization, helped the country to become a more service-oriented society better integrated into the international system. The reality is that there has been no separation of powers, the ruling family was above the law, political parties did not exist, and there was a lack of accountability in the political arena. In addition, the press and other media were highly censored, and civil society organizations barely assumed any role unless under the government umbrella, with restrictions on tackling critical issues like corruption. There was also an absence of laws to protect whistleblowers and anti-corruption watchdogs (Ulrichsen 2011). Power has been centralized with a top-down hegemony by the ruling family, and the majority of the population have been satisfied with socio-economic conditions, not seeing any necessity for political engagement. Furthermore, the pervasive presence of informal traditional tribal networks within state institutions and civil society, along with the lack of interest in politics and the absence of venues for it, all helped maintain the status quo of the regime (Khatib 2013). As for the economy, Qatar has developed regulation of business practices and achieved concrete steps towards liberalizing the economy, although these have sustained the ruling family’s private interests. Generally speaking, corruption has been relatively low, Qatar scoring the lowest among the MENA region countries. Petty corruption has been almost non-existent due to the wealth of the citizens, but grand corruption was obvious from the institutionalization of networks, especially among the political elite and the decision-making process as well as in economic activities. Given the above analysis, the rule of law, quality of regulation, and economic openness imply positive relationships with corruption, while political rights, press freedom, and social inequality acted more as catalysts for political corruption to occur.

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United Arab Emirates (UAE) 2.1

Regime Characteristics

The United Arab Emirates (UAE) was established in 1971 as a federation ruled by Sheikh Zayed Al Nahyan, who served as president until his death in 2004, and was succeeded by his son Sheikh Khalifa bin Zayed. Throughout the years the federal unity developed more coherently, and the UAE is the only federal system among the Arab countries. The political system is a dynastic one, in which authority is formalized along tribal and family lines. Power is concentrated in the ruling families of the federal system, with members of these families involved at all government levels through traditional patriarchal leadership supported by tribal political loyalties9 (Hudson 1977; Herb 1999). With nationstate structures and bureaucracy, the traditional basis of authority—Sheikh and majilis —was weakened but did not disappear. The state functions in a largely secular manner with modern institutions, and its legislation is based on civil laws and Islamic Shari’a (Al-Muhairi 1996). A temporary constitution came into effect in 1971 but was not replaced by a permanent one until 1996, as the emirates were not fully prepared to give up their unique identity and authority (Heard-Bey 1982, 1996). The constitution gives sovereignty to the seven emirates, meaning that areas linked to administration, socio-economic policies, and each territory’s natural wealth are to be administered by the emirates separately. The federal government maintains control over foreign policy, defense, the armed forces, postal services, and electricity services (UAE Constitution 1996: article 120). At federal level, authority is identified in the Supreme Council, the president and his deputy, the Council of Ministers, the Federal National Council and the judiciary. At local level, each emirate has its own government structure and administrative policies (UAE Constitution 1996). However, there has been a lack of clarity on the rules of succession in the emirates, creating structural vagueness in the political system.

9 This feature of dynastic monarchy is apparent in choosing the leadership. The family recommends the most qualified among them, and they also have the power to remove a ruler or replace him if he is not in line with the adopted policies and the family’s norms. Tribal traditions are strong in the UAE, where ‘the Sheikh’ of the tribe leads by virtue of his personal qualities and being an elder, heading the family’s council majlis.

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The ruler of Abu Dhabi is the president of the country, heads the highest authority, the Federal Supreme Council, consisting of the rulers of the seven emirates, and has “supreme control upon the affairs of the Union in general” (UAE Constitution 1996: article 49). The Council decides the general policy of the federation, manages the affairs of the Union, and ratifies treaties and agreements. It elects the president and the vice president of the country (each serving a five-year term), appoints the prime minister, and approves appointments to the Council of Ministers (UAE Constitution 1996: article 47). The prime minister heads the Council of Ministers and each emirate has at least one minister. According to the constitution, the Council of Ministers is authorized to implement the general policies defined by the Supreme Council, draft bills for federal laws, and define the general budget for the country. The legislative authority functions in a consultative manner, reviewing bills for federal laws before submission to the President and the Supreme Council. The legislative branch is unicameral, with the 40 members of the Federal National Council distributed according to the size of the emirates and supposed to represent the country and not their own emirate (UAE Constitution 1996: article 77). In 2006, in response to regional developments, partial elections took place for half of the seats in the Federal National Council, while the other half were appointed by their constituent rulers. Voting was only allowed for members of an electoral college, where 0.88% of the national population were represented, and no further elections took place until 2010 (BTI: UAE 2010). As for the judicial branch, the constitution guarantees an independent judiciary, in which the Supreme Court is the constitutional court consisting of a president and a number of judges. It has jurisdiction in issues concerning the relationship between the emirates, and between the emirates and the federal government (UAE Constitution 1996: article 99). In 2006, the ruling family established a Supreme Judicial Council to further ensure judicial impartiality, but some decisions remained subject to review by political leaders, and judges often acted in line with the government stance on certain matters. The federal ruler has the right to review criminal and civil cases in advance, so a formal system of checks and balances has been absent (Agrast et al. 2011). The constitution states that public resources should be protected by every citizen in the country, and while corruption found its way into the UAE, the Federal Supreme Council amended the constitution in 2008 to declare that the prime minister, ministers, or deputies should refrain from taking part in commercial, financial, or

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trading activities with the government while in office (UAE Constitution 1996: article 62).10 There remain some areas where definitive laws are missing, such as fraud, bankruptcy, and lay-offs. Though the government updated many laws and regulations during the 2000s, improving administrative bodies and cooperation between federal and local authorities, the system continued to be based on personal connections, and the implementation of laws remained subjective in many cases.11 The country is categorized as an ‘autocracy’, scoring −8 throughout the whole period of study on Polity IV (Polity IV: UAE 2010). The political elite was drawn mainly from the ruling family, discouraging any chance of political competition and separation of powers. With only 0.88% of the population represented in the elections, participation in the decision-making process in the country has been hampered. Concerning the rule of law, UAE is missing in the V-Dem index on both citizens’ equality before the law and judicial constraints on the executive. It is clear from this review that the executive power has exercised strong hegemony on the political scene in all aspects of legislation as well as running the emirates’ affairs. However, the judiciary has been independent, especially in civil cases. A legal advisor to the government (expert interview A3) mentioned that the law is highly respected, and people generally abide by it. Yet, certain political issues, such as offenses against the government or critical cases associated with its high-profile members, were not announced and did not show on the surface or make it to court but were resolved secretly due to their sensitivity. In this context, it can be said that even though the country lacks a proper democratic system, there is respect for the rule of law, which might explain the low levels of corruption in the UAE. Still, it is difficult to assume a relationship between the rule of law and corruption due to the absence of data.

10 According to expert interview A3, this has affected several high-level officials and the Public Prosecutor in Dubai has identified fighting corruption as a top priority for the government, stating that any official who tries to benefit illegally from their position will lose immunity. 11 During expert interview A3, it was mentioned that the government has renewed its anti-corruption policy and focused on applying strict regulations on corrupt practices. It has generally implemented an anti-corruption framework and the federal emirates followed the UAE Penal Code which criminalizes corruption in both public and private sectors. Yet, the UAE witnessed a decline in its Transparency International ranking during 2008 and later, as the legal framework for fighting corruption has been broken down into many laws and codes of conduct.

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As regards political rights and freedom of association, during the 40 years of the country’s existence as a federation, the regime has maintained total control over the political scene, with no organizations or groups overstepping its hegemony. Political parties were banned, civil society was not active, and there has been no political opposition in the country. Hence, legal channels to express any political views or dissatisfaction were missing. Trade unions were not allowed to be established, and although the country is a signatory to several human rights conventions—delivering its human rights report before the UN Human Rights Council in Geneva in 2008 for the first time—the UAE rejected recommendations put forward regarding the establishment of trade unions. A growing number of non-state associations exist in the UAE, mainly semi-governmental ones like the Khalifa Foundation and Al-Maktoum Charitable and Humanitarian Foundation. These foundations, along with many others, carry out welfare services, development programs, and cultural activities. The UAE Human Rights Association is accessible for nationals and non-nationals, but the government scrutinizes its activities, acting promptly if any risk to domestic stability is detected. Strikes, protests, and civil disobedience were put down instantly, and expatriates involved prosecuted and deported. During the years from 2002 to 2008, many were arrested, while others lost their jobs due to precautions put in place by the government (BTI: UAE 2010). With a score of 6 for political rights, the country was categorized as ‘not free’ throughout the study. Even though there has been no political competition or participation, along with the limitations on political and civil rights, the country did not face any opposition, and throughout its existence it has not experienced any risks of instability, political discontent, or popular dissatisfaction.12 This implies that the absence of political rights has no clear effect on corruption levels in the country, since the population is not interested in political activity or taking part in the decision-making process in the UAE. This was confirmed during interview A3 with a non-national expert, highlighting that there is a general consensus among the citizens that political reforms or democratic transformation are favorable “unless they come at the expense of national stability”. Also, the people prefer a system that is “structured along national priorities and local traditions and not imported from outside”. In the absence of competition in the political system, 12 This has been evident from the literature review on the UAE as well as expert interview A5.

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the social consensus relied mainly on patron–client networks which have maintained the stability of the country and enhanced its consolidation. Even though civil society has been underdeveloped, with no real civic engagement or voices of reform except existing professional and voluntary associations, social and political polarizations are very limited with no clear conflicts or risks of domestic instability (Fig. 4). The constitution guarantees freedom of opinion and expression, and the media environment in the UAE is supposedly free, as media outlets have grown significantly with the establishment of Dubai Media City, which consists of several broadcast channels and printed media, where there has been an increasing focus on domestic issues of concern, such as expatriate issues, environmental issues, and wages (BTI: UAE 2010). Journalism falls under the criminal law, and there has been an extended discussion over formulating and drafting the country’s media law, which remained unclear until 2010. The majority of journalists in the country are non-nationals who are fully aware of the political set-up and practice self-censorship in order to avoid political disputes. Reflecting on these developments, the UAE notably advanced in the 2007 World Press Freedom Index, its score of 23.7 in 2010 compared to 50.2 in 2004 suggesting a tendency towards a more liberal society. Changes to freedom of the press do not correspond to variations in corruption levels in the country, so there is no clear causal relationship between these variables. From this overview, the political scene in the UAE appears to blend an autocratic regime with the absence of political participation, banned political parties, and barriers to freedom of association and expression (Agrast et al. 2011). The causal relationship between the three variables and corruption is not clear, but there may be an indirect relationship. The first hypothesis concerning rule of law does not imply a definite relationship, as the indicators are absent. However, a general respect for the rule of law exists in the country, which might explain the lower levels of corruption. The second hypothesis on political rights indicates that there is no relationship between political rights and corruption, as the regime practiced full control, not allowing any means of participation or assembly. The same applies to the third hypothesis on freedom of expression, with no direct relationship reflected between press freedom and corruption levels, and the obvious changes in the press freedom scores in the country do not correspond to the minor variation in the levels of corruption over the years of study. However, as a group, the regime characteristics indicate a negative relationship with corruption, meaning that the non-democratic

Fig. 4 Regime characteristics in UAE

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features of the regime, lack of competition, and the restricted press freedoms denote the presence of political corruption. This nexus implies that grand corruption might have taken place at the higher levels of authority, as the elite has not been accountable or even liable to be challenged by any means, be it legal, legislative, or the press. 2.2

Economic Status

The UAE witnessed huge economic development over the decade under study. According to World Bank data, national GDP has increased massively from 46 billion dollars in 1995 to 240 billion dollars in 2008, mainly due to the combination of natural resource endowments and a tiny national population of around one million citizens (at that time). The country promoted a progressive plan for economic liberalization and diversification. It also invested heavily in infrastructure with a wide range of services, transforming it into a developed economy. Although the path to growth halted in 2008 due to the global financial crisis, the country managed to achieve modest growth afterwards, reflecting well-formulated plans and sound implementation. The financial system is efficient and stable, with an advanced banking system and capital markets, and many local and international banks present in the country (Herb 2009). Apart from its oil wealth, the UAE’s economy has been more diversified than those of its neighboring Gulf states. Enormous investments were promoted, with non-oil contribution to GDP reaching 61% in 2007, but the country remained oil dependent, with the oil sector constituting a high percentage of the country’s GDP, totaling around 30%. The country owns almost 10% of the world’s oil reserves and has the fourth-largest proven world gas reserves, making it among the wealthiest in the world. In 1985 the UAE reached the highest GDP per capita in the world, when the oil share of its total revenues reached 90% (Ayubi 1995). Although oil revenues are allocated through the federal budget, the natural resources are owned by the emirates individually13 (BTI: UAE 2014). There was no reporting on the oil revenues, which were not included in the federal

13 Four out of the seven emirates have proven oil and gas reserves. Abu Dhabi alone owns around 92% of the country’s natural resources, and only 2% are in Dubai. Sharjah has 5% of the country’s gas reserves which are utilized domestically, and Ras Alkhema owns around 1% of gas reserves. This is reflected in the individual emirates’ financial and economic statuses.

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budget (BTI: UAE 2014). Foley (1999) estimated that 29% of the country’s oil revenues in the 1990s have not appeared in national accounts. Natural resources rents have varied across the years from 1999 (scoring 11.1%) until 2010 (scoring 20.8%), but these changes do not correspond to the variation in corruption levels in the country, revealing an ambiguous relationship between the two variables. Due to secrecy over the budget and revenues in this sector, it can be said that the natural resource endowments might have had an effect on the intensity of corruption in the UAE, taking the form of grand corruption, in which those involved in the management of this industry are high-level government officials (Fig. 5). While the country defines itself as an open market economy with fewer bureaucratic practices, the government’s role in the economy has been strong and extensive. V-Dem data on the state ownership of the economy indicator is missing for the UAE. However, during interview A4 with a high-profile professional working in the oil sector, he mentioned that even though the country, especially Dubai, is becoming an international economic hub for the Middle East, the government maintained a “strong grip on the economy”, allowing competition in few sectors. The government owns major industries and corporations (including Abu Dhabi National Oil Company (ADNOC), Dubai Ports World, Emirates Airlines, Etihad Airlines). The government, represented in the ruling families, is the recipient of the oil reserves, and this control over the national oil companies means that the regime dominates the vital sectors of the economy. The government has regulated monopolies and oligopolies, leaving sectors like telecommunications open for competition (Gause 1994; Noreng 1997). The UAE has generally maintained good scores on the economic indicators, showing some fluctuations. Regarding business freedom, the country was ‘mostly free’ until 2005 (70) when it moved backwards, with reduced scores until 2009 (49.3). This shows the regime’s strong control, with the ruling family actively engaged in business-sector activities, less economic competition, and limited liberalization. It is worth noting here that corruption is apparent among high-level positions and large-scale services, with reports of corruption in the public procurement process, especially in tenders or vendor selection. The government also does not conduct tendering according to international standards, and retendering has been a common trend (BTI: UAE 2014).

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Fig. 5 Economic status in UAE

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In this respect, the variable of the quality of regulation does not display a strong relationship with corruption levels in the country, as variations over the years in the two indicators do not correspond. However, the quality of regulation may be said to have a catalytic effect on corruption levels—mainly grand corruption—as it enabled the ruling families to manage the economy deliberately, allowing limited competition in specific sectors. The country has been a member of the WTO since 1996, and the government considers free trade a prerequisite for productivity and promoting growth. Export centers in the UAE are free zones, offering several financial advantages for companies. The country has been open to trade and investment, with clear regulation and processes, reflected in the Trade Freedom index, in which the country scored a good average of 75 during the years under study. There is a clear causal relationship between openness and corruption, as the two indicators have shown corresponding changes. This implies that with more openness in the country, less corruption has been perceived. The economic variables of the UAE emphasize controversial outcomes, with the three hypotheses showing different findings. The country’s richness in natural resources and investments in the non-oil field indicate that there are two sides to the analysis. One side is related to the regime’s control over the oil sector as well as other major economic activities where grand corruption can take place, especially considering the secrecy practiced over the budget and revenues. This lack of transparency can impact the levels of corruption. The other side relates to economic openness and competition—mainly in trade—with higher performance over the last decade corresponding to the lower levels of perceived corruption in the country. Therefore, bearing in mind the specific set-up of the UAE’s economy and how the government has functioned, it can be said that there is no clear causal relationship between the group of economic variables and corruption. 2.3

Development Status

The UAE has maintained good records of human development, with an average score of 0.80, and this has been apparent in the government’s continuous strategic planning covering many socio-economic areas. During the 2000s, the country maintained a high GDP per capita, ranking second among the Arab countries after Qatar, reflected in the

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Human Development Index (Ayubi 1995). The government has steadily improved education and health services, increasing the budget allocations for both sectors. When the federation was established in 1971, the majority of the population were illiterate, but education expenditure saw significant increases, and nationals were even given financial incentives to send their children to school (Heard-Bey 1996; Yamani 1997). During the decade, literacy rates in the UAE reached 95%, and the quality of education in the country is very good compared to the educational outputs of the North African and Mashreq countries. Literacy rates have no clear effect on corruption, but the quality of education in the country might have a positive impact on the lower corruption levels witnessed in the UAE. One clear feature of the UAE is the unbalanced population, with citizens comprising only 15% of total population, while non-citizens accounted for the rest during the period of study. The UAE constitution states that foreigners have rights and enjoy freedoms agreed upon in international contexts of which the country is a part (UAE Constitution 1996: article 40; Al-Qudsi 1998). The constitution also guarantees equality of all before the law, with no distinction on basis of nationality, religion, color, race, or social status (UAE Constitution 1996: article 14). In addition, it guarantees freedom of worship, religion, speech, movement and residence, and assembly rights within the limits of the law (UAE Constitution 1996: articles 29–34), yet there has been discrimination in this regard, with the regime imposing some restrictions on people’s freedom.14 Human capital has presented a persistent fundamental problem in the UAE, as the country, like the other Gulf states, has relied heavily on foreign expatriates to achieve its development and economic growth (Bonine 1997; Winckler 2000). One dimension of this problem is that expatriates have faced limitations, and though the country is an active member in the international trading system, the WTO has demanded a freer movement of labor, and the International Labor Organization has tried to urge the UAE and other Gulf states to accept basic international labor standards and respect human rights (Kapiszewski 2001). Another dimension of the human capital is that citizens are more 14 As noted during expert interview A3, this has been evident as some ethnic and religious minorities were denied their civic rights in the country, as well as many stateless people who have been residing in the country for years without any legal resolution of their status.

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interested in obtaining positions in the public sector (41% of the government labor force in 1998) than in industry (7.8% in private industry in 1998) (Kapiszewski 2001). The government secures positions for its citizens in the public sector as its Federal Labour Law (1980: article 9) states that: “work is an inherent right of Nationals of the United Arab Emirates. Non-nationals may not engage in any work within the State except in accordance with the conditions stipulated in this Law and its executive orders.” This has been part of the ‘Emiratization’ policy through which the government has sought to nationalize the labor force and rely less on foreign labor (Zeffane and Kemp 2012). This unique social structure has led to clear discrepancies in social services as well as in income between nationals and expats. The nationals enjoy vast benefits and a tiny percentage of the citizens are poor (mainly due to their residence in the less resource-rich emirates). They enjoy comprehensive welfare benefits, including social security, subsidized or free housing for low-income employees, interest-free loans for housing, allowances for families, health care, education and other benefits reserved exclusively for nationals. They face no problems in accessing education, jobs, and other services, as the government has a well-established welfare system for its citizens, while the expatriates generally enjoy good-quality services (Agrast et al. 2011; Kapiszewski 2001). There has been no taxation of income in the country, but taxes are applied to housing fees and tourism. Data on poverty rates and income inequality is absent. Nevertheless, the above overview of the social discrepancy between nationals and non-nationals suggests the presence of income inequality. This was also mentioned during expert interview A5, which confirmed that citizens earn much more than non-citizens holding equivalent positions in the government bureaucracy. Preferential treatment for citizens has existed on all levels, not just in relation to wages. Nevertheless, due to the absence of data, a direct causal relationship between corruption and income inequality, or corruption and poverty, cannot be assumed. It can be said that clear social inequality persisted in the country, enabling corruption to flourish in the form of nepotism and preferential treatments. However, there is a lack of evidence on the spread of petty corruption, due to the high incomes of civil servants across all levels of the administration. As for gender equality, the role of women has increased, and they witnessed empowerment and involvement in the political scene in 2006 when they gained access to the parliament through elections and appointments, occupying 22% of the seats in the Federal National Council in

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2007, and their numbers in the cabinet have been increasing. Although women have made some advances in the country, there continued to be many cultural and traditional barriers to their full active engagement in politics and society (Kemp et al. 2013; Aguirre et al. 2011). This is clear in the percentage of women in the labor force, which averaged 11.7% throughout the study, implying no direct causal relationship between women’s empowerment and corruption levels, although the mere inclusion of women in the UAE’s political scene is in line with the reduction in corruption witnessed in the country. Therefore, it can be said that the UAE’s progress in women’s empowerment might have an impact on the lower perceived levels of corruption in the country. Looking at the development variables as a group, human development in the UAE shows a clear relationship with the lower perceived corruption. The quality of education might also be a catalyst for lower levels of corruption, but literacy rates have no effect. As for the income inequality and poverty variables, both are missing in the data, but the general analysis implies that inequality is present, especially between citizens and the expatriates who constitute the majority of the population but do not receive many benefits compared to the citizens. This gives the impression that social inequality could be a cause of corruption in the country. Moreover, during expert interview A3, it was mentioned that petty corruption is not common due to the high income of the citizens, who do not need to conduct any illegal practices, while the non-citizens refrain from getting involved in such activities for fear of deportation or imprisonment. As for women, the clear progress in higher roles for women suggests that the greater women’s empowerment, the less corruption is witnessed. Outcome The UAE has been successful in achieving development since establishing the federation, proving its capacity to address social and economic challenges and putting in place development strategies that make national interests a priority. The ruling families enjoy high degrees of legitimacy and acceptance among the population, where the stability and preservation of the status quo along with economic privileges for the citizens have increased the support of the people for the government. The regime has been able to rule uncontested, maintaining high levels of economic growth and social well-being. This has been achieved by incorporating the views of influential tribes and merchant families into the policies of the country while being seen to work for the welfare of society.

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Based on this analysis, the significant causes of corruption are the group of political variables that lead to ‘undocumented’ grand corruption, while trade freedom and human development indicate a negative relationship with corruption in the country.

3 3.1

Oman

Regime Characteristics

Oman is a hereditary monarchy that has been ruled by the Al-Said family since the mid-eighteenth century. Sultan Qaboos came to power in 1970, ousting his father in a bloodless palace coup. His reign has marked a turning point in Oman’s modern history, as Qaboos has followed a gradual development path and led the country through four decades towards modernization, relying on oil revenues to establish a solid infrastructure and reform government structures. Qaboos has practiced a centralized authority that was less shared with his family than occurs in the other Gulf countries, without having a clear succession of authority or even nominating his heir during his life. The monarch rules by a royal decree issued in 1996, which is considered the country’s first written constitution as it disseminates the basic law. It lays out the powers for each branch of the government, states provisions for reforming the system, and outlines the direction of the government in both political and economic matters (Royal Decree 1996; BTI: Oman 2010; Polity IV: Oman 2010). Under the royal decree, the monarch enjoys wide authority. He is the head of the government, the head of state, the commander-in-chief of the armed forces, the minister of defense, foreign affairs, and finance, and chairs the Supreme Judicial Court and the Omani Central Bank. While the decree provides for an appointed prime minister, the Sultan has held this position since 1972. Qaboos has been keen to appoint ministers from the country’s diverse tribes, ethnic groups, and regions to create a balance among those groups in the cabinet, in order to secure their loyalty and consensus on key political issues (BTI: Oman 2010; Human Rights Report 2014). The decree established a bicameral legislature, with an upper house, the State Council, that functions as an advisory body, consisting of 72 members appointed by the Sultan from the different tribal and ethnic groups, and a lower house, the Consultative Council with limited authority to propose legislation and comment

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on bills, consisting of 84 members elected by universal suffrage for a fouryear term (Royal Decree 1996). The lower house was active during the period from 2007 to 2009, enhancing the powers of committees that had oversight of several ministers. However, the elections have seen reduced public participation, with public acknowledgment that the Council had no real powers. While the parliament did not impose any real checks on the executive, its establishment revealed the monarch’s willingness to establish a framework for governance. Article 60 of the Royal Decree states that the “judiciary shall be independent”, and article 61 states that “there shall be no power over judges in their ruling except law” (Royal Decree 1996). Nonetheless, in practice the courts were strongly influenced by the executive power since the Sultan appointed all the judges and presided over the Supreme Judicial Council which is assigned to supervise the judiciary and formulate its policy. With regard to anti-corruption legislation, Oman ratified the UN Convention against Corruption in 2013 with the Sultan’s royal decree. Oman had no specific agency for fighting corruption, as the responsibility fell under several entities in the country, including the police, internal security services, and the Ministry of the Palace Office. There has also been no legislation for whistleblowers in the country (BTI: Oman 2010; Human Rights Report 2014). The regime has been categorized as an ‘autocracy’, scoring between −8 and −9 for the years under study according to Polity IV (Polity IV: Oman 2010). The three branches of government did not enjoy equivalent powers; the executive branch had a free hand to manage the country’s affairs with very limited democratic input. While the influence of the legislative branch was increasing, it could not address critical issues like national security, foreign affairs, or domestic political matters. It maintained an advisory role in economic and social matters, could not pass any legislation, and was only able to propose amendments to laws submitted to the Sultan’s cabinet and question ministers in areas related to public service. Expert interview A6 highlighted that the checks on the executive power were practiced mainly by the major tribes of Oman. The rule of law indicators show varying scores. While equality of citizens before the law has maintained high scores averaging 0.62, judicial constraints on the executive witnessed a rise from 0.18 in 1999 to 0.46 in the following years. This implies that the legal system was relatively independent and capable of performing without government intervention except in security-related or other sensitive cases, so the judicial branch was not

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totally independent from the executive’s influence. This implies an imbalance in the political system, with no separation of powers since power has been centered around the Sultan himself.15 Corruption levels in Oman show no corresponding changes in the rule of law indicators, yet the country maintained low corruption scores compared to other countries in the region. This indicates relative respect for the rule of law as a possible reason for the lower perception of corruption in the country. Regarding political rights and freedoms, the basic law in Oman allows freedom of association and assembly “within the limits of law”. Political parties are banned, and even though in 2002 the Sultan extended voting rights to all citizens over the age of 21,16 this step towards more political participation did not fundamentally change the political scene or the profiles of the parliament’s members. This is because tribal networks maintained the power to determine the success of particular candidates in the elections. Moreover, Qaboos retained his domination over the political scene, with no opposition groups challenging the legitimacy of his regime. Another point of concern is that lobbying in the parliament was only permitted for specific matters like justice, education, and health. However, the political influence of lobbying groups has been weak or non-existent. In addition, any social demands were channeled to the parliament through informal means (families, tribal ties, and connections with public officials). The government has banned any politically oriented civil society organization—managing this by issuing licenses only to non-political organizations—and human rights abuses remained a persistent issue in the country (US Department of State 2018). Furthermore, government approval was required for any conduct where legitimate objectives need to be present; consequently, any activities seen to threaten the social order were prohibited. Hence, civil society has had only minor influence and there was a lack of proper civic engagement. During expert interview A7, it was mentioned that it is widely thought that citizens would welcome more political participation and a more powerful parliament, despite the dominant culture of respect for the patriarchal leadership, which is reflected in the percentage of voters (30% or less) who took part in the 2007 elections. The citizens by and 15 This was asserted during interview A7 with a non-Omani Arab professor working in Muscat as well as another academic. 16 Voters were earlier chosen from tribal leaders, intellectuals, and businessmen, constituting around 25% of population empowered to vote.

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large fully supported the state with the exception of Ibadis who called for traditional religious leadership, even though Islam is the religion of the state (Al-Nami 1971). Furthermore, while Oman’s labor law does not provide for unions in the public sector, a ministerial decree issued in 2006 made a significant amendment to the labor law, providing the right to establish trade unions for private workers to enable them to collectively bargain, settle disputes, and peacefully strike (Ministerial Decree 2006). However, the labor law has left many issues unclear and unresolved. Oman is a member of the International Labor Organization, but it has not ratified the conventions relating to freedom of assembly, and elimination of discrimination regarding employment and the professions (Jones and Ridout 2005; Valeri 2009; BTI: Oman 2010, 2014; Hassan 2010). Based on the above, political rights in Oman sustained a score of 6, and were categorized as ‘not free’, according to Freedom House. This is due to the absence of political competition, the limitations imposed on all political activities, and the general lack of proper channels of participation. The constrained political rights seen in Oman might be a cause of political corruption in the country. The tight restrictions on political rights triggered corrupt practices, with the limited engagement in political, civic, or professional areas of society giving the regime a free hand (Fig. 6). As for freedom of opinion and expression, it is guaranteed unless it threatens the security of the state or leads to any kind of public conflict. The 1984 Press and Publication Law is restrictive, giving authority to the government to censor all publications, domestic and international. It was only in 2004 that a royal decree was issued allowing Omani citizens to establish private radio and television enterprises, and the first private broadcasting channel aired in 2009. The regime can also take legal action against any offensive political, social, or cultural material. Thus, many of the privately owned press agencies practiced self-censorship, with publications during the period of study generally in harmony with the regime’s views, as the government also offered subsides to these editorials. Adding to the constraints on freedom, there has been a lack of public opinion polls in the country to assess the government’s conduct and the satisfaction of the population. With no public access to information, a sense of intimidation has limited freedom of opinion and expression (BTI: Oman 2010; Human Rights Report 2014; Freedom of the Press Report 2015). This may explain why the Press Freedom index has only

Fig. 6 Regime characteristics in Oman

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a few scores for Oman for the years under study (2003, 2008, 2009, 2010), reflecting varying performance in the country with better scores after 2003 when private radio and television were permitted. There is no clear correspondence between the varying levels of corruption and the press freedom scores, yet the lack of press freedom might be a cause of increased corruption when there has been high scrutiny of the media. This gives the impression that the elite was neither accountable nor criticized for their conduct, and the people had no access to information through the fourth authority in the country, which is the media. The absence of press freedom therefore gave scope for political corruption, with the elites enjoying a high degree of control over press and media outlets. Looking at the regime characteristics in Oman, it is clear that Qaboos has followed a strict governance path. The executive power has maintained centralized authority, the legislative power had an advisory role, and while the judiciary was impartial, sensitive matters were highly influenced by the Sultan. Therefore, the rule of law was not always respected in matters related to high-profile or security issues. The country has been governed by a basic law preventing citizens from actively engaging in the political process, and freedom of expression was hindered by the restrictions imposed by the regime. Hence, looking at the group of political variables, it is clear that the authoritarian characteristics of the regime provided the opportunity for grand corruption, the Sultan and the big tribes enjoying limitless powers and in no way accountable to the citizens. 3.2

Economic Status

Compared to the other GCC countries, Oman is a modest oil-producing country with dwindling reserves in the long run. While the government worked to ensure economic diversification, liberating industry to give a bigger role to the private sector and moving towards a post-oil economy, it continued to rely on oil providing a big share of the country’s GDP. Natural resources constitute 76% of the economic activity of the country, where average rents from oil resources reached 40% throughout the study, making huge contributions to GDP. According to World Bank data, the country experienced significant budget surplus and an increase in GDP in 2007–2008 due to oil revenues and investment in non-oil sectors. The data on corruption levels and natural resource rents do not correspond

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with each other. However, the high rents might still explain the existence of higher corruption in Oman than in Qatar and the UAE, where perceived corruption levels and rent percentages are lower. During the late 1990s, Oman focused on enabling a free and competitive market economy, initiating laws to encourage and ease foreign investment as well as privatizing some state-owned enterprises. As an aside, Oman’s financial system is well developed and functions in a modern way. As part of the economic plans, small and medium enterprises (SMEs) started to grow in the country, accounting for higher employment as well as a considerable share of GDP. Later on, this was supported through the establishment of the Al Namaa Fund to assist in SME development. Throughout the study, the business environment was not well developed, with the absence of a smooth government bureaucracy conducive for non-citizens to conduct business. However, starting a business in Oman is less costly compared to the other states in the Gulf region. Laws guarantee private property ownership, and in 2006 GCC citizens won the right to own residential or commercial properties in Oman. However, property was only assigned to non-citizens for specific tourism projects (Valeri 2009; IBP 2013). On another level, antimonopoly laws were not implemented, since the Sultan and his family possessed overt powers in the decision-making process and the management of monopolies, even though the laws enacted stated otherwise (BTI: Oman 2010; IBP 2013). The basic law prohibits cabinet members from conducting business or holding an interest in public enterprises while in office (Royal Decree 1996: article 53). Nevertheless, many officials worked directly or indirectly in the business sector, and though they were supposed to file annual financial disclosure reports about their activities, ambiguity prevailed in spite of the law. This is because the law provides neither a clear definition nor a penalty for misconduct. However, the Sultan has repeatedly stressed that he will not tolerate abuse of powers by officials, and in 2008 two high-level public officials (the president of the Muscat municipality and the Minister of Manpower) were dismissed following rumors of corrupt activities and misuse of authority (BTI: Oman 2010, 2016; Human Rights Report 2014). The business freedom indicator reveals a varied performance for the country in the years under study. Oman scored 70 until 2005 and was categorized as ‘mostly free’, while later on it scored lower. This clearly corresponds to the changes in corruption levels in the country: there is a negative relationship between the quality of regulation and the perceived

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corruption in Oman. The poor quality of regulation—reflected in the business freedom indicator—has negatively affected levels of corruption in the country. Another indicator is the state ownership of the economy index, in which Oman scored 1.5 from 1999 until 2010. This also mirrors the government’s capture of the economy’s major activities, with the Sultan and his close circles practicing tight control over the economy (Fig. 7). Oman’s accession to the WTO in 2000 opened up trade, and the country scored fairly well throughout the study on the Trade Freedom index, averaging 77. The government worked on establishing free-trade zones as part of its infrastructure development plans for port facilities, encouraging investment opportunities with high incentives. Changes in the trade openness indicator do not correspond with the changes in corruption levels; therefore, there is no clear relationship between economic openness and corruption in Oman. Looking at the economic status of Oman, the country relies mainly on its oil richness to achieve economic growth, with less business freedom and more state domination over key economic activities, along with a lack of effective regulation. This implies the existence of a negative relationship between natural resource rents and corruption, as well as between quality of regulation and corruption, together with grand corruption in the economy, since Qaboos and his circles enjoyed monopolistic advantages. On another level, trade does not have a clear impact on the intensity of corruption, and the country was not generally open and competitive, which damaged many investment opportunities and limited its capacity to flourish due to the supremacy of the regime over the economy. 3.3

Development Status

Oman moved from upper-middle-income to high-income status in 2007, achieving significant progress in human development. This can be clearly seen in the good-quality services that the government offers its nationals, who enjoy extensive social benefits and a developed infrastructure. They have privileges in education, health, employment, pensions, and social insurance. Oman has been focusing on education since the 1970s, with a big portion of its budget allocated to upgrading and improving basic, technical, and vocational education along with higher education. Literacy rates reached 97.7% in 2010, and while the government was successful in utilizing its available economic resources, its human capacity goals were

Fig. 7 Economic status in Oman

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not attained due to the lack of skilled nationals required to realize the needs of the economic and industrial sectors. The regime focused on a policy of ‘Omanization’ to increase the number of nationals in the private sector. This has been managed inefficiently, frequently resulting in lessqualified individuals leading industries, mainly because appointments were made to balance tribal presence in the economy and maintain kinship. Many unskilled people became part of the decision-making process, being appointed to the cabinet and other important positions centered in Muscat (BTI: Oman 2010; IBP 2013). Regarding the relationship between literacy rates and corruption, the country has high literacy rates, but during interview A7 with a non-national academic, he mentioned that the regime’s strategy was to educate its people until they finish high school, but that further and higher education were not priorities for the government. As a result, higher education and especially science education is not well developed, and access to study was based on ‘selective criteria’ for the few. This explains why the ‘Omanization’ policy did not succeed, with a lack of qualified staff in high-level positions. In response, the Omani government granted nationality to high-profile foreigners, integrating them into society and appointing them to top positions in the government. Thus, even though literacy rates are high in the country, this fails to reflect the reality of the Omani education system, which has produced a population who do not voice their demands or think critically, leaving the regime unaccountable to its own people. As for income inequality and poverty rates, data is missing for both indicators. The citizens of Oman were guaranteed a minimum monthly wage, unlike foreign workers who were offered no such security. This is especially unfair as non-citizens constitute around 40% of the population. During expert interview A7, it was mentioned that poverty is not rampant in the country, but it may be more common among low-level civil servants who are mainly non-nationals. It has been highlighted that Indians have had a strong impact on the country, culturally and economically, with many citizens even able to speak Indian languages. This is because Indians occupy the lowest levels in the bureaucracy in all sectors in Oman. The expert mentioned that it is common practice—but a hidden one—to offer an Indian a bribe to get a service completed promptly. Poverty can therefore be a trigger for petty corruption among the lower levels in the bureaucratic structures in Oman. Social inequality may also be a cause of grand corruption: with only the regime entitled to decide on benefit allocation and beneficiaries, discrimination against non-citizens in

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contrast to the everyday welfare security enjoyed by citizens represents a catalyst for the spread of preferential treatment. Even though discrimination on the basis of gender, color, language, religion, ethnicity, or social status is prohibited, people were not treated equally in Oman. Tribal ties, ethnic backgrounds, and affiliations played a significant role in securing jobs or any other benefits. Sectarian groups were respected, and the religious institutions in Oman were under strong state control and could hardly express any views without the consent of the regime (BTI: Oman 2010; US Department of State 2018). Additionally, women in Oman faced discrimination, with traditions impacting their status. For example, throughout the study they were not entitled to certain state benefits like housing loans. Even though women have been successfully integrated into jobs in the public and private sectors, in practice, women and non-Arab groups such as Zanzibari Africans faced barriers in their integration into society, especially in formal activities (BTI: Oman 2010; US Department of State 2018). Women did not have a clear role in the political arena, with 2.4% representation in the parliament for a few years and an average presence of 18% in the labor force. This reflects a lack of equal opportunities and the absence of gender equality in society. While there is no clear relationship between women and corruption, gender inequality and discrimination against specific groups in society can nonetheless be a catalyst for the intensification of corruption. As regards the development variables, literacy rates, poverty rates, income inequality, and women’s empowerment have no direct effect on corruption levels in Oman. Nevertheless, income inequality indicates the presence of grand corruption, with the regime deciding the allocation of benefits to the people, while the persistence of poverty among low-level civil servants indicates petty corruption occurring among nonnationals. This is exacerbated by the lack of quality higher education, social discrimination against non-citizens—manifest in unfair wages, benefits, and services compared to citizens—and the reduced engagement of women in society, implying an indirect negative effect on corruption in Oman. Outcome Oman is clearly an authoritarian regime, in which the Sultan practiced absolute control over the country and its resources. The fact that the Sultan heads the Supreme Judicial Court prevented judicial impartiality in

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issues related to the monarch or his close circles, leaving a concealed zone in which grand corruption might occur. This indicates that the rule of law was not strong enough, as laws were not always impartial. The country is an oil-dependent economy relying mainly on revenues from natural resources. Regulation is neither clearly articulated nor well implemented, a potential direct cause of corruption, together with the vagueness of some laws and the limitations on doing business in the country. As for trade, the country has been open to trade and has performed well. However, grouping the economic variables suggests that the autocratic political regime and the lack of appropriate regulation has given room for more grand corruption to occur. Given the above analysis, it can be said that the low quality of regulation as well as the lack of judicial independence are robust causes of corruption in the country. Restrictions on political rights and press freedom, together with social inequality, represent catalysts for widespread corruption in society.

4 4.1

Bahrain

Regime Characteristics

The Al-Khalifa family has ruled the country since the late eighteenth century, dominating all aspects of the government and society. Emir Hamad succeeded his father, assuming the title of king, in 1999. Since coming to power, Sheikh Hamad has initiated political and economic reforms, liberalizing the political scene, re-establishing an elected parliament abolished in 1972, issuing an amnesty for political detainees, and encouraging exiled political activists to return to the country (Nonneman 2006; Wright 2008). Bahrain became a constitutional monarchy after a national referendum in 2001 and the new constitution was enacted in 2002, providing wide authority for the king. He can rule by decree, has the right to veto legislation, amend the constitution, and propose laws, can dissolve the parliament, appoints the president of the Consultative Council, and appoints and dismisses the prime minister17 and ministers (Bahrain Constitution 2002: articles 33, 35, 39, 40). Thus, ultimate powers reside with the king

17 He is his uncle and has held this position since 1971.

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while some are shared with the executive branch. As for the cabinet, critical ministries (like defense, foreign affairs, interior, and oil) are assigned to members of the ruling family. Other privileges enjoyed by the ruling family include impunity from monitoring, questioning, and accountability under the policy known as Khalfana.18 The legislative authority has a bicameral parliament, with 40 members in each house. The Council of Deputies (lower house) members are elected on a four-year term, while the Consultative Council (upper house) members are appointed by the king. The parliament has the power to propose legislation,19 pass it with an absolute majority, question the cabinet, investigate and remove officials from their positions. The Council of Deputies enjoys the same powers as the Consultative Council, but the president of the latter has the casting vote in the event of a deadlock. Hence, the Consultative Council—appointed by the king—has veto powers over the decisions of the elected Council of Deputies. In 2002, the first parliamentary elections were held, and many political societies20 participated. Opposition groups as well as human rights organizations noted irregularities taking place and international supervision of the elections was not permitted21 (Ramazani 1986; Fuller and Francke 1999; Nakash 2006). All the major political societies took part in the elections of 2006 and 2010. Some changes were introduced before the 2010 parliamentary elections to acknowledge a bigger role for the legislative authority, but in reality, these were all superficial, with no actual political change. Regarding the judiciary, the legal system is based on both British and Islamic laws,

18 This policy—named after the ruling family—grants royal family members official highlevel positions in the government. 19 The lower house can only initiate legislation, while the executive actually draft laws. 20 Political societies/associations are substitutes for political parties (this is explained

later). 21 There hegemony of the Sunnis stems from the adherence of the ruling family, which in effect has widened the gap and deepened friction between the two Muslim communities in the country. Throughout the Hamad era, Shi’as caused unrest, often protesting against their status and religious discrimination in the country, and boycotting the 2002 parliamentary elections in a protest against privileges given to Sunnis. They also called for the parliamentary elections in 2010 to be boycotted, and during that year many were arrested and charged with plotting a coup. In earlier years, they were cracked down on harshly by the government. Nevertheless, they managed to win the majority of seats in the 2006 parliamentary elections.

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civil and traditional codes and regulations. The country has two independent court systems, a civil and a Shari’a law court. Although there is no legislation directly prohibiting discrimination, the codification of the Sunni family and personal status law in 2009 improved the legal status of the Sunnis, but widened the gap between Shi’a and Sunni Muslims and led to heightened tension. The Shi’a majority was left under the uncodified Shari’a court rulings. While riots and demonstrations frequently resulted in violent clashes between security forces and protestors, especially the among Shi’a community, the regime’s power was not jeopardized. However, public resentment prevailed among the Shi’a in response to their perceived economic inequality, unequal treatment in employment, and their deep-rooted sense of deprivation (Bahry 2000; Wright 2008; BICI 2011; Neumann 2013; Chayes and Matar 2013). Even though the king’s establishment of the Supreme Judicial Council should have enhanced the separation of powers, this is interrupted since he chairs the Higher Judicial Council and appoints all the judges (Bahrain Constitution 2002: article 33). Therefore, courts are subject to pressure from the regime especially when political cases are under investigation, and since 2006, this pressure has been increasing steadily, with challenges facing the government mainly from the Shi’a majority. Polity IV’s scores for the country moved from −9 in 2001 to −7 in 2003 (Polity IV: Bahrain 2010). This is because Bahrain witnessed political changes after 2002 when the new constitution was enacted and elections took place. The country remains categorized an ‘autocracy’ because the government has suppressed the opposition who constitute the majority of the population. The 2002 elections, which came 31 years after the abolition of the parliament, did not change the political scene profoundly, merely laying the basis for a constitutional system of governance. Data for Bahrain are absent from the V-Dem indices, but the author has relied on studies and expert interviews. During expert interview A9, it was highlighted that the rule of law and equality before the law are guaranteed by the constitution, but this was often not applied as members of the ruling family were not liable to be sued, and foreigners were disadvantaged if they filed a case against citizens. Furthermore, the Shi’a population faced significant discrimination with the hegemony of the Sunni minority evident in all aspects of the country. Legal discrimination existed in matters related to gender and social equality between Sunnis and Shi’a regarding appointments to public office (Bahry 2000; Wright 2006, 2008; BTI: Bahrain 2012). It can therefore be concluded

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that the rule of law was not respected due to the hegemony of the king over the judicial authority and the legal discrimination against the Shi’a population. This hampered the impartiality of the judiciary and the equality of citizens before law, indicating a negative relationship between the rule of law and corruption in Bahrain. On another level, the Bahraini regime has exhibited more tolerance of political participation and civil activities than other Gulf countries. Although formal political parties were illegal per se, ‘political societies’ and ‘political associations’ have been allowed and have participated in parliamentary elections. According to a 2005 law, political associations/ societies should not be affiliated to class, sect, ethnicity, geography, or occupation. However, those that are active in the country are mostly based on religious and sectarian agendas. In this sense, Shi’a and Sunni associations are strongly present on the political scene, and secular associations exist but with less popularity and political powers. Each has its own political aspirations and goals in the Bahraini regime. Regarding civil liberties, civil society organizations representing a wide range of professional and social interests increased in number after the constitution was enacted in 2002, but their activities remained restricted by law. They are required to obtain a license from the government in order to operate; generally licenses were granted even to organizations critical of the government. Nevertheless, whenever their work was perceived to violate the regime’s purposes, the government withdrew the license and the entity had to quit its activities instantly. For example, in 2004, the Bahrain Center for Human Rights was banned after it criticized the government, calling on the prime minister to resign (BTI: Bahrain 2012). Labor unions are allowed in the country and foreign workers can join them. Strikes or protests should be announced in advance, and in critical sectors (such as security, defense, transportation, health care, communications, and infrastructure) no strikes are allowed. The law largely restricts the right to assembly, citizens must obtain approval and a license to hold protests, and if any occurs without permission, the police are allowed to use violence to break up assemblies (Wright 2006; BTI: Bahrain 2012). According to Freedom House, political rights have seen scores ranging between 5 and 7, with the country ranked ‘not free’. While this reflects the changes taking place in the political arena in Bahrain, the indicators nevertheless show that the political system in general has been under the tight control of King Hammad, electoral democracy was non-existent,

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and members of the ruling family secured top positions in the government. In addition, the Sunni–Shi’a conflict has always prevailed; the Shi’a have been discriminated against and marginalized on all levels due to the dominant Sunni elite and the role of sectarian affiliations in the system. Even though political associations and civil organizations in the country are common, some are split along religious lines, while others overlap. In this context, the most widespread conflict has been the Shi’a majority’s call for equal rights, better integration, and more inclusion (Bahry 2000). The varying political rights scores along with the different levels of corruption throughout the period of study indicate that there might be a negative causal relationship between these two variables, even though their changes do not directly correspond (Fig. 8). As for freedom of expression, it is guaranteed by the constitution but subject to the regime’s authority. No actual change has been witnessed on the ground despite calls to remove press regulation, restrictions, and penalties. Throughout the study period journalists often faced imprisonment for violating the press law. Public and private television and radio channels were allowed to be critical to a certain extent while practicing a high level of self-censorship. While the country is a signatory to the International Convention of Civil and Political Rights and other agreements that protect freedom of expression, the government has not complied with these codes of conduct (Sakr 2006; Katzman 2017). A 2010 report by Reporters without Borders stated that imprisonment of bloggers and activists was increasing in Bahrain, and the country also scores among the highest for internet penetration rates in the Middle East, with restrictions on the flow of information online. The country’s freedom of expression score has ranged from 23 in 2002 to 51.3 in 2010, due to disparities in a regime that allows more freedom of expression yet in many instances is suppressing people. The variation in press freedom scores corresponds with the perceived levels of corruption for several years, demonstrating a negative relationship between press freedom and corruption in Bahrain. Censorship and the inability to freely express opinions on state matters sent a significant signal that the country was not functioning as a democracy, or even as a hybrid democracy. The political indicators similarly vary throughout the years under study, showing changes after the constitution was enacted and elections took place in 2002. No great change was witnessed, with the regime maintaining its authoritarian character, practicing full control and allowing limited participation of the people. Not all indicators directly correspond

Fig. 8 Regime characteristics in Bahrain

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to the changes in corruption levels, but there is a causal relationship between reduced respect for the rule of law, restricted political rights, and constrained press freedom on one hand, and the intensity of corruption levels on the other hand. 4.2

Economic Status

The economic reforms in Bahrain have had a sound impact, helping the country to become a market economy and gradually liberalizing the state-owned enterprises. As a small oil-producing country without a large public sector, Bahrain has sought to rely on privatization. This has enabled SMEs to grow, constituting a big portion of the private sector and supported by the king himself through several government initiatives such as the Tamkeen agency. The hydrocarbon sector is dominant, constituting around 80% of GDP. The share of natural resource rents in the country’s GDP is tiny, an average of 5% throughout the years under study. There is no clear relationship between natural resource endowment and corruption levels in Bahrain; changes in the percentages of rents are very minor and do not correspond to the changes in corruption levels. The government has taken several steps towards opening up to global trade and developing its financial markets, along with lowering taxation. The king has followed a gradual top-down process to diversify the economy through industrial production, tourism, and financial services, reflected in the state revenues. Bahrain has established a well-functioning legal and regulatory system, becoming a regional center for banking, insurance, and other financial services. International institutions regard the country’s economic environment and investment atmosphere as competitive advantages among the Gulf countries. For example, the IMF evaluated the Bahraini system as generally effective and enjoying a modern and comprehensive regulatory system. According to the Heritage Foundation’s 2010 report, central indicators of macroeconomic stability in Bahrain are its encouraging business environment, the tax system, the low cost of doing business, the practical regulations, and its strong financial sector (Gengler 2012; BTI: Bahrain 2012; Al-Haddad 2015). In 2002, anti-monopoly legislation was enhanced with administrative transparency and monitoring measures, and in 2004 other laws dealing with competition and commercial matters were implemented. Comprehensive laws exist to prevent monopolistic activities, but regulatory structures have not always functioned efficiently in this regard. Generally, the market has

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functioned well although the Khalfana policy has given privileges to the royal family, who enjoy a monopoly over manufacturing and distribution of certain goods and services. The royal family and its clans reaped most of the benefits of privatization, and foreign investment remained limited to specific fields such as transportation. Foreign investment rights were restricted in specific sectors. Nationals of the GCC were able to own 100% of a firm’s shares, but non-GCC nationals were limited to 49%. Foreign ownership was allowed in new industrial fields and distribution services. During the period of study, property rights were underdeveloped and not well institutionalized in the country. Public procurement was developed in 2002 through a new law ensuring transparency in the whole process, but corruption practices persisted in the tendering process (Gengler 2012; BTI: Bahrain 2012; Al-Haddad 2015). Reflecting this, the Heritage Foundation scored Bahrain generally high on its Economic Freedom index over the years, with a score of 80 for business freedom, but the country received lower scores in 2009 and 2010. Even though Bahrain has a tiny economy, records reflect a good quality of regulation and the clear intention of the government to follow a market economy structure. There is no clear relationship between the quality of regulation and corruption in Bahrain, since indicators for the two variables have not shown corresponding scores. However, the ruling family’s control over many economic activities in the country indicates the possibility of grand corruption taking place (Fig. 9). As a member of the WTO since 1995, the country has acted in accordance with the organization’s regulations. The 2010 Economic Freedom Index ranked Bahrain 13/179, its score of 1.5 the freest in the Middle East (followed by Qatar) and among the top 20 globally. The Fraser Institute ranked Bahrain as the most liberal among the Arab countries in its 2010 report on economic freedom in the Arab world (Al Ismaily et al. 2010). Looking at the trade freedom scores of Bahrain, the country has performed well, witnessing some variations over the years, but its scores did not directly correspond with the changes in corruption levels in Bahrain. In that sense, there is no obvious relationship between economic openness and corruption in Bahrain. Taking the economic indicators as a group, there is no direct causal relationship between any of the variables and corruption. However, the ruling family’s control over many economic activities, the enforcement of the Khalfana policy, and the vagueness in some regulations can be said to explain the existence of grand corruption in the country. This was

CORRUPTION IN THE GULF REGION: A BLACK BOX

Fig. 9 Economic status in Bahrain

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also mentioned during expert interview A8 with a high-level official, who said that no one can question or trace the activities of the ruling family members in the different economic areas, where many transactions and business deals can be carried out unnoticed or undocumented. 4.3

Development Status

Bahraini human development rose significantly between 1980 and 2010, with the country ranking 39/169 in 2010. Literacy rates are very high, reaching 98.1% in 2010 with the provision of good-quality education in the country, and the human development record is high, averaging 0.80 throughout the study. There seems to be no causal relationship between literacy rates and corruption. The welfare state of Bahrain and the high human development scores indicate that the population enjoys a good quality of life with secure well-paid jobs, which suggests that they are not prone to involvement in corrupt practices. Bahrain has a welfare system, and citizens enjoy a good national social security system with a number of free and subsidized services available to all Bahraini citizens (unemployment benefit, housing, health care and education). Expatriates are excluded from most of the benefits offered exclusively to citizens, but they do receive free health care (Lahn 2016). In that sense, there is obvious inequality between citizens and foreigners, and many human rights organizations have been critical of the exclusion of expatriates from labor market reforms. These expatriates constitute around 54% of the population and 76% of total employment. Like its Gulf neighbors, Bahrain followed a sponsorship system, and the government has worked on the labor market, with reforms in 2008 and a new labor law to replace the sponsorship system coming into force in 2009 (Fakhro 2005; BTI: Bahrain 2012). This new law is intended to improve the working conditions of foreigners with regard to pay, housing, women’s rights, and other issues affecting standards of living. Yet the progress has been less than expected, according to the UNDP (2010) Human Development Report, which highlights several improvements along with drawbacks that still require more government effort. Citizens are paid more than foreigners and enjoy the protection of a minimum wage, which does not apply to non-citizens. Citizens can be employed in the public sector (around 90% are nationals), while the private sector is mainly dominated by non-citizens (around 80%). The government has been seeking to replace expatriates with nationals in the workforce as part of

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its ‘Bahrainization’ policy (Lahn 2016). Related to this, the 2009 Quality of Life Index (Economist Intelligence Unit 2009) shows clear income inequality in Bahrain between the genders, between citizens and noncitizens, and between public- and private-sector employees. Expatriates, like those in neighboring Gulf countries, are subject to discrimination and excluded from being part of the country, as they do not enjoy any benefits, even though they constitute around half of the population. In a ‘political nationalization’ initiative, the government granted citizenship to around 60,000 expatriate Sunni Muslims, while denying that this was a step towards balancing religious adherence in the country. The population grew suddenly in 2010, reaching 1.2 million (Wright 2008; BICI 2011; Neumann 2013; Chayes and Matar 2013). Another aspect of discrimination is social inequality, with ethnicity, sectarian adherences, and networks key to defining opportunities for the general population. While the 2002 constitution guarantees equality between men and women, providing citizens with all the basic rights of education, health, property, housing, and employment, this has not been realized on the ground. Also, according to the constitution (article 2), Islam is the state religion and even though the Bahraini law is generally secular, religion plays a critical role in a country where political associations, actors, and opposition movements have always identified themselves with their religious and sectarian affiliations. Social and political pressures arise from the constant tension between Shi’a and Sunni. The majority population are Shi’a, while the rest are Sunnis and a few Christians.22 Even though the Shi’a are in the majority, they continue to feel discriminated against and treated as second-class citizens, while the Sunnis have dominated the country’s social, political, and economic affairs23 (Bahry 2000; Wright 2008; BICI 2011; Neumann 2013; Chayes and Matar 2013). With indicators for income inequality and poverty absent, studies have concluded that both exist in the country, on the basis of the sustained

22 Non-Muslims account for around 20%, consisting of Christians, Hindus, and Buddhists who are mostly non-citizens. They practice their faith freely and are allowed to form groups that generally take the form of cultural clubs. 23 According to the Bahrain Independent Commission of Inquiry, there is an obvious wealth inequality in Bahrain, since poverty and unemployment are concentrated among the Shi’a Bahrainis.

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discrimination against Shi’a and expatriates on different levels. This indicates a positive relationship with corruption, as the maltreatment of the majority of the population and the inability of people to voice their demands openly provided opportunities for corruption to flourish. This was also confirmed during expert interview A9, although it was not feasible to reach conclusions on the spread of petty corruption. The participation and empowerment of women are of no significance in the country. At an average of 20%, their share in the labor force, as in Kuwait, is better than that of all Gulf states, and their presence in the parliament is tiny. Women’s empowerment has been on the regime’s agenda, since the king appointed ten women to the Consultative Council in 2006 and eleven in 2010. Entities established with this aim include the MENA Businesswomen’s Network, the Bahrain Women’s Society (BWS), the Awal Women’s Society, and the Mustaqbal Society. The Women’s Union in Bahrain aims to develop the political role of women in society, promote entrepreneurship, put pressure on the government for more equal rights, and spread awareness of women’s rights. Women in Bahrain did not enjoy equal opportunities, especially as regards their personal status, as laws in the country have not supported gender equality. In addition, even though Bahrain is part of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the government has made it clear that implementation must abide by Islamic law and traditional norms. Women have therefore been underrepresented in the political arena, and discrimination clearly occurs in the workplace as well as in women’s legal status. The UNDP Gender Inequality Index scored Bahrain at 0.51 for the year 2008 (Ahmed 2010; UNDP 2010; BTI: Bahrain 2012; Katzman 2017). Although women in Bahrain were not fully empowered in society or in politics, it is hard to establish a relationship between corruption and women’s empowerment, as the country has been following a consistent path towards women’s empowerment, whereas corruption has increased through the years. Looking at the development indicators, literacy levels do not reflect a causal relationship with corruption, but high human development in Bahrain has an impact on the lower corruption levels witnessed in the country. Compared to the Gulf states, stark inequality represents a direct cause of corruption, with the minority population (Sunni) leading the country and the majority (Shi’a) facing discrimination on all levels in society. As in the other Gulf states, expatriates are not fully integrated in society, and women do not enjoy equal opportunities, yet this does

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not relate directly to corruption in the country. However, it might be a catalyst for preferential treatment and nepotism. Outcome Bahrain has been categorized as an authoritarian regime since its constitutional monarchy (in which the king rules but does not govern) does not function properly. Even though the constitution guarantees the separation of powers and there is a clear institutional set-up for the three branches of government, the executive authority has been privileged with wide powers in the constitution. This has led to fewer, or even the absence of, checks and balances in the system. The regime has hosted grand corruption in both the political and economic scenes.24 Even though elections took place in 2002 and the constitution was enacted, no great change has occurred in the functioning of the political system. This is due to the sustained illiberal character of the regime, which allows less input from political societies. The economy has been diversified, with clear trade openness, but many economic activities remain restricted under government control, directly or indirectly. This has provided scope for interpreting the existence of grand corruption in the economy. Moreover, the Khlafana policy has strengthened the rule of the family in all areas and economic activities, where regulations have not always been respected. The strong Sunni minority rule increased discrimination against the majority Shi’a population. In this regard, preferential treatment has always determined the benefits offered to the population. Based on the above analysis, the obvious causes of corruption in Bahrain are reduced respect for the rule of law, lack of freedom of expression, and the minority rule which sustain social inequality and discrimination against the majority of the population in legal, political, economic, and social matters.

5 5.1

Kuwait

Regime Characteristics

The country is a constitutional hereditary monarchy and has been under the rule of consecutive Sheikhs and Emirs descending from the Al Sabah family ever since it was established. The 1962 constitution in Kuwait is 24 In 2009 the Bahraini parliament ratified the UN Convention against Corruption.

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widely seen as the cornerstone of the political system’s stability and there is a wide consensus on the leading role of the Al Sabah family. Kuwait functions with secular bureaucratic institutions and modern settings, and according to the constitution, Islam is the state religion and Shari’a is the main source of law. Islamic law is primarily significant in personal matters (Farah 1989; Crystal 1995; Herb 2010). According to the constitution, the Emir appoints the prime minister and the cabinet. All ministers are members of the parliament and are accountable to the legislative authority, which can cast a no-confidence vote, impose political or legal penalties, and inquire into their actions. Kuwait has the oldest elected parliament among the Gulf countries, dating from 1963. The National Assembly comprises the ministers and 50 directly elected members (Kuwait Constitution 1962). Voting restrictions apply to police officers, members of the armed forces, and naturalized citizens (allowed to vote only after 20 years of citizenship). Generally, the legislative authority has been effective ever since its establishment, usually challenging the executive authority,25 and parliamentary elections have been fair and competitive. It can discuss critical matters and has regularly pressed the executive for more transparency in financial matters, and oversight of oil and defense policy. The constitution provides for an elected legislative branch, giving the Emir the authority to suspend it and rule by decree; nonetheless he has to call new elections within 60 days26 (BTI: Kuwait 2012). Yet, the constitution also gives the parliament the right to overturn any decree issued by the Emir during its period of suspension (Kuwait Constitution 1962). This has created an ongoing conflict between the executive and the legislature, causing blockages in the political system especially evident during the late 2000s when the Emir disbanded the parliament three times.27 Even though there has been regular suspension 25 Prime minister Nasser Al Sabah was forced to resign four times, each in a context related to corruption practices, but the Emir re-appointed him on all four occasions. This indicates that the legislative authority has been powerful, yet accountability of ministers remained ambiguous. 26 The National Assembly has been disbanded several times during the existence of the parliament: in 1976, 1986, 1999, 2006, 2008 and 2009. 27 The year 2006 marked a significant step in the political scene in Kuwait, when the Emir suspended the parliament after it demanded the prime minister be questioned on an issue related to a corrupt act, but the Emir objected to this procedure. In 2009 the Emir agreed to the prime minister being questioned, a sign that the parliament’s powers were extended and it could hold the government to account through a meaningful

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of the parliament by the Emir, the constitution has always served as a reference for new elections to take place. As for the judicial authority, it is autonomous but moderately transparent since the Emir and the executive branch are a permanent influence; consequently judges often take the same line as officials (Farah 1989; Crystal 1995; Herb 2010). During expert interview A10, it was mentioned that cases involving non-citizens and citizens were mostly biased towards the citizens, while cases filed against political figures rarely made it to court and were resolved behind closed doors. Even though Kuwait is categorized as an ‘autocracy’, scoring −7 in the Polity IV project throughout the study (Polity IV: Kuwait 2010), the country has an active political system compared to the other Gulf states (except Bahrain), in which citizens are politically active in political groups, trade unions, and professional associations. Moreover, according to expert interview A11, the traditional debates held in the diwaniyas 28 among the different tribes and political activists are strong and influential (Herb 2010). However, the constant tensions and conflict between the government and the parliament represent a clear obstacle to the proper functioning of the political system. The absence of organized political parties (discussed below) has made it hard for the government to engage in negotiations and agreements with the parliament, as there is no majority in the parliament to determine the shape of the cabinet. In effect, this had a negative impact on the policy-making process, even though a system of checks and balances existed (Herb 1999, 2009). As for the rule of law, the country scores high on the V-Dem indicators, sustaining a score of 0.64 on judicial constraints on the executive and 0.74 on equality before the law. This shows that there is no apparent causal relationship between the rule of law and perceived corruption in Kuwait, but there are some cases where the judiciary was not functioning completely impartially, which might explain the presence of political corruption in certain areas linked to high-profile individuals in the regime. The political conflict

legislative role. Among the parliament’s most obvious achievements were the passing of the privatization bill in 2010 and the introduction of a new electoral system which became decisive in the succession crisis within the ruling family. The regime has signed the UN Convention against Corruption in 2003 and ratified it in 2007. 28 In the traditional Kuwaiti system, public debate and consultations are held in the diwaniyas, when families and tribes gather for political discussion and debated by civic and political activists.

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between the legislative and executive authorities is the main reason why corruption in Kuwait is higher than in its neighboring countries, even though the country has been the most liberal of the Gulf countries in terms of the existence of checks and balances and scrutiny of the executive authority. It is clear from this review that in most cases, questions and inquiries by the parliament were related to corrupt practices of the executive, and in its turn the parliament was suspended several times. This suggests that grand corruption has taken place in the country among the political elite who were not questioned due to their wide-ranging powers. Regarding freedom of association and assembly, the constitution makes no reference to political parties and they are not officially recognized. Nevertheless, ‘political groups’ exist and function as political parties in Kuwait. These political groups are active before elections, operate openly, and announce their agendas publicly; they also serve the interests of certain social groups. Opposition groups in Kuwait are mostly welleducated, wealthy businessmen, and family leaders who seek a greater role in the decision-making process in the country. Most of their demands relate to their rights in oil shares, more freedom of expression on various matters, and a stronger role for Islam in politics. As for the National Assembly elections, members of political groups have stood for election as independents, being members of the unofficial groups of moderates and conservatives who had no majority in the parliament. In this regard, legislation was based on coalitions formed between the members in order to reach a majority vote. As for civil society in Kuwait, it is more developed than in neighboring Gulf states, comprising trade unions, women’s societies, professional associations, and cultural clubs. These organizations have been newly introduced into the society, so some lack roots and strong links with the elite. However, they have become engaged in the political process and express their demands openly, along with the informal networks of tribes and families that play crucial roles on the political and socio-economic fronts (Herb 2010). In 2006, the Constitutional Court made assembly a legal right. Despite some restrictions on political participation, the people are able to channel their political and civil demands to the government, and this is reflected in Kuwait’s score of 4 on the political rights indicator for the years under study, a better performance than that of neighboring Gulf countries. There is no clear relationship between political rights and corruption, since Kuwait has had functional political groups and active civil society organizations which are

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relatively well able to voice their demands and oppose the regime through dynamic political participation (Fig. 10). Kuwait is the most liberal among the Gulf region countries for journalism, scoring an average of 25 for the years under study on the Press Freedom Index, although restrictions on reporting critical issues (such as religion and criticizing the Emir) result in some degree of self-censorship. However, Kuwait’s ranking was downgraded following the arrest of journalists accused of damaging the national interests and the Emir’s status (Odine 2011). A non-national government advisor stated in interview A10 that the government has prosecuted people for nonviolent speeches and academic writings, and dispersed public gatherings. There is no clear causal relationship between press freedom and corruption, as the variations in the two indicators do not correspond to each other, but the practices of the regime give the impression that it could be a cause of corruption. The regime has constrained people’s freedom of expression, denying them the basic right to openly discuss any matters affecting their everyday lives. None of the regime characteristic variables in Kuwait impact the level or intensity of corruption, taken on their own. However, as a group these variables show a negative causal relationship between the rule of law, political rights, and press freedom on one hand, and corruption on the other hand during the study period. Grand corruption existed for several reasons. First, the executive authority’s hegemony over and suspension of the National Assembly exposed a persistent political conflict. Second, there were no organized political parties, simply parliamentary groups who lacked influential legislative authority because there was no majority. Third, the restrictions on the press and the regime’s practices against any who challenged the stability of the system were confirmed by expert interview A11. These aspects as a group imply the existence of political corruption in the country due to the nexus of the scant respect for rule of law, constrained political participation, and limited freedom of expression. 5.2

Economic Status

Kuwait is an oil-rich country, owning around 8% of the world’s known oil reserves. Its economy is heavily dependent on oil and petrochemical industries which generate nearly half of the country’s GDP, where rents from natural resources have reached 45%. This percentage does not correspond directly to the intensity of corruption, yet the control practiced

Fig. 10 Regime characteristics in Kuwait

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by the ruling family over the oil sector may imply the presence of grand corruption. In contrast to the other Gulf states, the ruling family does not receive much profit from oil, as the parliament’s approval is required for the royal salaries. The market is relatively competitive, with the exception of the state monopoly over the oil and petrochemical industry. The royal family and a few merchant families controlled the main economic activities in the country, where informal monopolies and oligopolies existed in sectors like tourism, communications, and telecommunications. The country’s privatization policy was not progressive, and the parliament has usually opposed attempts to privatize certain assets, accusing the government of concealing hidden interests. In 2010, the parliament approved a law on privatization of specific state-owned companies under certain conditions, such as the government having the highest number of shares in the enterprises, and guarantees of secure employment for Kuwaiti citizens (Herb 2009; BTI: Kuwait 2012). Nevertheless, economic diversification was not progressing, and debate on further opening up and the development of other industries to reduce dependence on oil was ongoing. All economic activities in the country have been subject to unfair competition. Property rights are clear, and the constitution forbids foreign ownership of the country’s natural resources. Non-citizens can own shares but not real estate. The informal economy has been limited despite the low taxes. The financial sector and banking system are modern and capitalized with a clear supervisory role for the central bank. Several commercial banks exist that are stable and generally well managed (Herb 2009; BTI: Kuwait 2012). State ownership of the economic sector is high according to the VDem index score of 1.92, which indicates that the major sectors are directly under state control while others are indirectly supervised. Corruption may have taken root due to the elite’s monopoly over key sectors and the limited diversification and openness in the market. Business freedom has varied over the years, averaging 70, which shows some correspondence with the changes in corruption levels in Kuwait. This implies that the low quality of regulation in Kuwait might be a cause of corruption in the country, since economic activities were not diverse, many barriers existed, and some regulations were not well articulated (Fig. 11). The country is a member of many international organizations and joined the WTO in 1995. Regarding regional integration, Kuwait removed trade barriers and initiated investment within the Gulf Cooperation Council in 2008. The country has performed well on the Trade

Fig. 11 Economic status in Kuwait

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Freedom index, scoring an average of 77, but these scores do not correspond to the varying levels of corruption. The country has not performed well on following regulations and being open compared to the other Gulf states (BTI: Kuwait 2012). The economic status of Kuwait demonstrates the ruling family’s control over major economic activities, which has prevented real economic competition. Though some openness is observed (according to the data), there was limited diversification in the market and a lack of strong regulatory institutions within the different economic fields. The country’s economy has relied mainly on oil, which is under state control, and the lack of data and non-transparency in this industry implies the presence of grand corruption within the economy. 5.3

Development Status

The combination of oil richness and a small national population has helped the country to modernize and achieve significant economic development. Human development in Kuwait is moderate compared to the other Gulf countries, and the country ranks 47th in the 2010 Human Development Index. The population reached 2.9 million in 2010, of whom 35% are citizens. Around 79% of the public-sector workforce are citizens, and the government has introduced the ‘Kuwaitization’ policy in the private sector to reduce overemployment in the public sector. The state assumes primary responsibility for citizens’ welfare, and offers them various goods and services under the oil-funded welfare state, including free health services, education, guaranteed employment, housing, and financial assistance. Other services like electricity, water, gas, and telecommunications are highly subsidized. Education spending is high in Kuwait, amounting to 13% of the budget, as the government has worked on improving the quality of education to match the needs of the market in order to reduce dependence on foreign workers (Herb 2010; BTI: Kuwait 2012). Citizens enjoy good-quality education and the country has high literacy rates, reaching 94.5% in 2007. There is no clear relationship between corruption and literacy rates. There is no data on income inequality and poverty rates. However, there is little poverty among citizens since tribes and family networks complement state support, while civil society organizations do not have a role in social matters (Herb 2010). GNI per capita in Kuwait is very high due to the oil richness of the country and the relatively small population.

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However, there are clear signs of legal, economic and social inequality in the form of discrimination against certain groups. While the country does not violate human rights, expatriates and minorities (like Bidoons and Shi’a) do not enjoy legal protection, civil rights, and equal opportunities. The majority of the population are foreign labor (around 67%) with no citizenship rights who are deprived of many benefits. The Shi’a minority (around 140,000) has often been in conflict with the Sunni Muslim majority, and their disagreement with the ruling family is believed to be the main source fueling tension. Bidoons (around 100,000) are stateless, despite being resident in the country (Farah 1989; BTI: Kuwait 2012). As for women’s empowerment, it was not until 2005 that the Emir granted women the right to vote and run for election; in the same year the first woman was appointed as a minister.29 In 2009, four women gained seats in parliament. However, gender inequality persisted as women were not allowed to serve as judges and there was gender discrimination in social matters (al-Mughni 2010). Moreover, according to World Bank data, female participation in the labor force averaged 20% throughout the study. There is no clear relationship between women’s empowerment and the intensity of corruption in the country, as women have not enjoyed any notable roles over the years of study. At first glance, development variables do not suggest causal relationships with corruption, yet a deeper look indicates that social inequality has clearly impacted the social set-up of the country. Bidoons, Shi’a, immigrants, expats, and women lack the means to fully participate and be socially engaged in the community. This is reflected in the existence of preferential treatment, nepotism, and kinship in the country, with nationality, adherences, and gender central to determining the benefits offered to the people. Outcome In contrast to many countries in the Gulf region, the political scene in Kuwait has been largely guided by the constitution. The legislative authority has been in a state of constant tension with the executive, challenging its authority and the Emir’s supremacy. The rule of law has largely been respected, but its impartiality has been open to question. 29 This development was influenced by Qatar and Bahrain (highlighted in expert interviews A10 and A11).

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Political parties have not been present yet were organized unofficially in the form of ‘political groups’, decent civil society organizations existed, and freedom of expression was guaranteed but people faced several restrictions. The government’s efforts in the areas of investment and economic openness were not significant compared to other Gulf countries. The ruling family has intervened heavily in economic activities through monopolies and oligopolies. Secrecy has surrounded spending and revenues in the oil sector. Lack of diversification in economic activities and being less open to trade and competition shows that grand corruption can easily occur in the absence of proper regulatory procedures and with barriers to market entry. The country has been doing well with regard to human development and its citizens enjoy a luxurious lifestyle, but inequality persists in discrimination against women, expatriates and the Bidoon and Shi’a minorities. This implies the existence of corruption, with preferential treatment within society and a failure to consider the legal, political, economic, and social rights of those minorities. Given the above analysis, it can be said that the main causes of corruption in Kuwait are the failure to abide by the rule of law and the lack of proper market regulation. Further, social inequality is a catalyst for corruption.

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The Kingdom of Saudi Arabia (KSA) 6.1

Regime Characteristics

Saudi Arabia is classed as an absolute monarchy. The Saud family has been ruling its territories since the fifteenth century, and the Kingdom of Saudi Arabia was proclaimed in 1932. By the 1950s, oil began to play a central role and the Council of Ministers was established. Both Quran and Sunna serve as the formal constitution, while the basic law issued in 1992 serves as an informal constitution (Basic Law 1992). The latter states that Quran and Sunna are the country’s constitution. Powers are vested in the monarchy. The king has absolute authority over the country without any legal restrictions, legislative constraints, or limitations by the constitution; he enjoys wide discretionary powers and seeks consensus only among members of the royal family. He serves as

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head of the state and prime minister, and appoints the ministers and religious figures. King Fahd ruled the country for more than two decades (1982–2005) followed by his brother King Abdullah (2005–2015). In 2006, King Abdullah formalized the royal succession process to prevent conflicts among the princes and ensure a smooth transfer of power within the dynasty. He passed a law establishing an Allegiance Commission comprised of princes of the Saud family. The Commission has to approve the choice of the future crown prince in a secret internal process with no public input (Ross 1999; Herb 1999; Aarts and Nonneman 2005; Al-Rasheed 2010). The cabinet is composed of royal family members who advise the king on political matters. In 1992, following calls for development of the political system, King Fahd established the Consultative Council, whose appointed members constitute a quasi-legislature with no political powers. The Council merely reviews legislation, since the king has the final word on any political matter. The first legislative elections took place in 2005; 592 seats were contested, but women were not permitted to take part in the electoral process. In 2003, in an attempt to introduce political reforms, the government allowed elections to be held for half the seats in the municipal councils. Full municipal elections scheduled to take place in 2009 were postponed (Ross 1999; Okruhlik 2010). The state is officially defined as Islamic, with the Quran present in its constitution and the Muslim clergy (ulama) an essential part of the state apparatus, wielding significant influence on all social aspects of the country, including public morality, personal status law, education, and culture. In 1994 the Supreme Council on Islamic Affairs was established as an advisory body equivalent to the Muslim Clergy Council (Okruhlik 2005). The king appoints the head of the Supreme Court and leads the judicial authority, representing the final court of appeal and a source of amnesty. A royal decree issued in 2007 sought to overhaul the judiciary, creating specialized courts in the form of a Supreme Court, Appeal Court, and other general courts to replace the Supreme Judicial Council. These reforms aimed at establishing firmer control and recognized appeal processes. Since the courts generally enjoy wide powers to interpret Shari’a law and Islamic standards, the separation of religion from matters of state was out of the question for both the government and the public. Many laws are based on Shari’a jurisdiction, but there are some elements of modern administration, for example in the regulation of the banking system. It is worth noting that the judiciary in Saudi Arabia is

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seen to be independent, but is often subject to the ruling family’s influence, and fatwas 30 issued by the Muslim clergy can be ignored at times31 (Aba-Namay 1993, 1998; Echague 2009; Okruhlik 2010). Polity IV categorized the Kingdom as an ‘autocracy’ scoring −10 throughout the study (Polity IV: Saudi Arabia 2010). There is no alteration of powers, with the royal family’s Islamic foundation providing its legitimacy in the country, and a high degree of consensus among the tribes over the family’s control of the territories. The country scores very low on the V-Dem rule of law indicators. It scored between 0.17 and 0.21 on the equality before the law indicator and between 0.34 and 0.37 on the judicial constraints on the executive indicator, which are the worst scores among the Gulf countries. The slight change in the rule of law indicators corresponds to the legal reforms introduced in 2007, although these reforms have not led to a better functioning legal system. With the minor change in the rule of law scores and the slight variation in the levels of perceived corruption in the country over the period of study, it is clear that there is a negative relationship between these variables: the less respect for the rule of law, the more corruption is witnessed in Saudi Arabia. Regarding political rights, the political system in the Kingdom has been a closed one, with no political parties to challenge the royal dynasty. The strict implementation of Shari’a law has restricted freedom of assembly, expression, and speech. Citizens had no ability to change the government, and there have been no institutions through which to channel their demands. The 1992 basic law contains no explicit statements on political or civil rights, and freedom of assembly and association is not addressed. A few professional and voluntary associations exist under state supervision. Civil society institutions are legalized and granted a license to operate by the government, though requests to establish organizations are often denied. Public expression of beliefs other than Islam has been illegal, but private worship was allowed. Even after the municipal council elections of 2005, bureaucratic constraints hindered their effective functioning. The connection between citizens and government is more obvious in the tribal, family, and professional groups at the majilis, open-door meetings 30 An interpretation/opinion given by a legal Muslim scholar based on religious standards. 31 In expert interview A13, it was stated that this is a well-known practice in the Kingdom, and that fatwas can change according to the will of the regime and to serve the aims of the elites.

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held by the ruling family to hear grievances or opinions from citizens or foreigners (Okruhlik 2010; BTI: Saudi Arabia 2010). The country has scored 7 on the political rights indicator throughout the study, reflecting the tight control exercised over the freedom of a population who are only allowed to voice their demands through informal traditional channels. The regime’s strict control over the political and civic participation of its people can be a cause of corruption as the population were unable to take any part in the decision-making process or even express their opinions openly. This also enabled the regime to act freely because they were not accountable, which in turn allowed political corruption to easily take root among a ruling elite who were not subject to any questioning or challenge (Fig. 12). As for freedom of expression, there is an ‘unspoken consensus’ on refraining from criticism of the government and the royal family. In 1982, a media policy was issued by the government urging journalists to support Islam, stand against atheism, and uphold Arab interests and the national cultural heritage. All high-level editors must have their appointments approved by the government, which also has the power to dismiss them. The printed media practice self-censorship and the government may issue guidance to newspapers on controversial issues. Broadcasting channels have supported the regime and acted as its mouthpiece. It is only recently that independent newspapers have started to discuss sensitive issues such as women, social reform, and the role of religion. These restrictions are reflected in the Press Freedom Index, where the Kingdom has scored an average of 68 with no strong improvement over the years, the worst ranking among the Gulf states. This lack of freedom of expression goes hand in hand with the regime’s hegemony over the political scene. There is therefore a causal negative relationship between the two variables. The regime characteristics in Saudi Arabia reflect the concentration of power in the hands of the ruling family, where decision making is an internal process with no public participation. The legislative authority had an advisory role and the judiciary was under the king’s control on many occasions. There were no checks and balances, and a lack of government accountability towards the people. The 1992 basic law does not explicitly address freedoms. Political parties were not allowed, and a high degree of censorship has been practiced over all media outlets. Taken together, the political variables indicate a negative causal relationship with corruption in the country, especially in light of the full control of the Saud family over

CORRUPTION IN THE GULF REGION: A BLACK BOX

Fig. 12 Regime characteristics in KSA

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the country since the 1930s and the reliance on religion as a ‘legitimate’ basis for their rule. 6.2

Economic Status

The Kingdom accounts for more than half of the total output of oil among the GCC countries. According to the 1992 Basic Law (article 14), “all natural resources… as well as the revenues of these resources shall be owned by the state as specified by the law”. Saudi Aramco has exclusive control over the Kingdom’s oil. Natural resources rents have varied from 24.2% to a peak of 55.9% in 2008. No clear explanation exists for the data, but it may suggest that oil richness can be a catalyst for corruption, especially in light of the regime’s secrecy over management and operation of the oil sector. The economy is a relatively free market one, with liberal policies, few and low-rate taxes, and a lack of constraints on capital movements. Yet, some vital sectors of the economy have been under state control, including telecommunications, electricity, and banking. A capital market law was introduced in 2003 to lower barriers to foreign financial institutions, and in the same year the government’s monopoly over the insurance industry came to an end (Al-Rasheed 2010; Ross 2011, 2013). During the 2000s the regime focused on strengthening private investments, diversifying the economy and enhancing its industrial efficiency. Yet, the government’s involvement in business remained a stumbling block for both investment and higher economic competition. Private industries took part in economic activities, and there has been some discussion of significant economic decisions such as privatizing state-owned assets (water, electricity, airlines, and others). However, the privatization process has not been fully realized. The government continued to hold shares in many companies (30% of the national insurance company and 70% of the telecommunications company are state owned), and with decisionmaking powers vested in the government, the private sector was not always willing to buy the state’s shares. During expert interview A13, the professor described how the ‘paternalistic private sector’ sees the government holding significant shares in many economic activities, reducing the scope for private investors to operate freely. Private property is strongly guaranteed in the country, although there may have been corrupt practices among royal family members, with property obtained outside legal and regulatory frameworks. There was no regulation for mortgages, so

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there were difficulties with governance of property, liquidation of assets, and evictions. The banking system has been stable and well regulated, with many national and international banks established since 2003, many of which conform to Islamic law (Al-Rasheed 2010; BTI: Saudi Arabia 2010; Ross 2013).The government’s ownership of the economy score on the V-Dem index averaged 1.27, meaning that the state dominates the economy, directly owning and controlling major sectors. While the Kingdom’s economic freedom performance is good, with business freedom scoring 70 most years, the government’s grip on the major economic activities can be regarded as a catalyst for grand corruption. Even though the country has recently modernized its bureaucratic structures and opened up, the economy has been less diverse than those of Qatar and UAE, and has relied mainly on natural resource rents (Fig. 13). The Kingdom’s late accession to the WTO in 2005 boosted market liberalization and reform, and saw improved performance on trade freedom. There is no clear correspondence between this indicator and changing levels of corruption in the country. The negative relationship between economic openness, diverse industry, and higher patronage networks among the ruling family was highlighted during expert interview A12, indicating the presence of grand corruption in economic activities, especially considering the lack of data on oil revenues and the full government control over that sector. 6.3

Development Status

2009 saw the country’s highest ever level of public spending on human resources development, education, technology, services, and infrastructure to boost its economic activities. In the 2007/2008 Human Development Index, the Kingdom scored 0.81, ranking 61/179. The government has converted its oil wealth into wide-ranging welfare programs for citizens, offering free medical care, education, and housing programs along with other services. However, there was no unemployment insurance system, and social security insurance was conducted on a case-by-case basis. Saudi Arabia has a young population (38% under 15) requiring many services and employment opportunities. Despite the huge investments in infrastructure, housing and job creation, the process did not achieve the desired goals. A ‘Saudization’ labor market policy was introduced to include more citizens in the labor force and reduce reliance on

Fig. 13 Economic status in KSA

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expatriates. Literacy rates in Saudi Arabia reached 98% in 2010 and education opportunities are good, but the quality of education was not as good as in Qatar and UAE (Okruhlik 2004; BTI: Saudi Arabia 2010). While there is no clear relationship between literacy and corruption levels in the country, awareness levels in the Kingdom were not very high due to the regime’s restrictions on the media, the internet, and freedom of expression. In this sense, it can be said that the lack of good education (i.e., basic knowledge of civil rights) can be a catalyst for corruption to occur in the country. Minority groups such as the Asir have the status of second-class citizens, while the Shi’a, who constitute 15% of the population, face widespread discrimination and restrictions on practicing their faith, and are effectively treated as third-class citizens. Further, foreign workers lack any rights in the country, as in neighboring Gulf countries. The first human rights conference to be held in the Kingdom, in 2003, was followed by the establishment of the first human rights organization to handle citizens’ complaints, the National Human Rights Association (NHRA). However, the state did not comply with its clauses and the Association was powerless to respond properly to the complaints received (Okruhlik 1999, 2002, 2004; Nasr 2007). While there is no data on income inequality and poverty rates in KSA, the professor in expert interview A13 stated that poverty is apparent in the country on many levels, and can be especially clearly observed among the low-skilled Asian labor force who are paid very little and have low quality of life compared to citizens, with their basic needs barely met. Income inequality is obvious from examination of the pay of expatriates and citizens; the latter receive higher wages and enjoy more benefits. While it is difficult to conclusively identify a relationship between poverty and income inequality on one hand, and corruption on the other, both can be said to act as catalysts for corruption to take root, due to the unfair treatment of expatriates and minorities. Regarding the status of women in the country, their share in the labor force was low, averaging 14%, they did not enjoy several basic rights, and were barely empowered politically. They had neither the right to vote nor to be present in the parliament. A female deputy minister was only appointed in 2009. The Gender Inequality Index scored Saudi Arabia low, stating that the country has high gender inequality (Gaye et al. 2010). This suggests a high degree of discrimination against women, but it has no clear relationship with corruption levels in the country.

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As a group, the development variables—social inequality, lack of basic women’s rights, and low awareness levels of the citizens (apart from their levels of education)—act as catalysts for higher levels of corruption in the country. These dimensions offered a fertile breeding ground for grand corruption, given the dominance of the Saud family and a passive obedient population. Outcome The country’s oil wealth and the religious basis of the Saud family’s power and legitimacy have enhanced the regime’s stability. The country is the most authoritarian of the Gulf states, with a lack of political rights, civil liberties, freedom of expression, and women’s empowerment, as well as male supremacy in society generally. Shari’a courts are a vital element of the judicial system, and on many occasions the judiciary has not been independent due to royal pressure and judges’ personal interpretations. Natural resources were completely controlled by the government, the economy was less diversified, and regulation of many activities was unclear. The country maintained a good human development ranking, but there is clear evidence of underrepresentation and oppression in society due to the religious legitimacy of the regime, the maintenance of its patronage networks, and its exclusive capacity to redistribute income among the population. Inequality within the population is clearly present on many levels, leading to unfairness and discrimination against certain groups. The group of variables indicate the presence of grand corruption, as the ruling family has maintained strong control over all political decisions and economic activities in the country. Expert interview A12 mentioned highly secretive petty corruption taking place on a limited scale among lower-paid expatriates in the lower levels of the bureaucracy. In summary, corruption can be said to have deepened primarily due to the ‘sacred rule’ maintained by the Saud family from the beginning of the country’s existence as a nation-state. The most apparent causes of corruption in the Kingdom are the limited rule of law, the lack of freedom of expression, and the low quality of regulation.

6

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Causes of Corruption in the Gulf Region: A Cross-National Comparative Analysis32

The Gulf is a homogeneous region with comparable political systems and socio-economic circumstances. The six countries are ruled by royal families who assume ultimate control over politics. The economies, which are also similar due to their richness in natural resources, are generally controlled to a great extent by the ruling families, since there is a monopoly over the oil and gas industry. While proper market regulation is in place, investments are restricted to specified fields. The markets across most of these countries are open and they are all members of the WTO. The Gulf region scores high on the Human Development Index compared to the rest of the MENA region. They are welfare societies where the citizens enjoy a good quality of services, very high incomes, high standards of living, and secure jobs in the public sector. This section uses a cross-national comparative analysis of the Gulf region countries to address the ten hypotheses of the study and to present a broader view of the causes of corruption in this region. Hypothesis 1 The higher the respect for the rule of law, the lower the levels of corruption in the country. Two V-Dem index indicators have been used to assist in analyzing this hypothesis: equality of citizens before the law and judicial constraints on the executive authority. Kuwait and Qatar perform better on both indicators, scoring above 0.50, while Saudi Arabia scores below 0.50 on both indicators. With a score below 0.50, Oman performs poorly on judicial constraints on the executive, and with different scores for abiding by the rule of law. Apart from Saudi Arabia, the Gulf countries score rather higher on the rule of law and lower levels of corruption than the rest of the MENA region. The least corrupt country (Qatar) performs relatively better than the rest on the rule of law indicators, while the most corrupt country (Saudi Arabia) scores quite low. Though data for UAE and Bahrain is absent from the V-Dem indices, interviewees from both countries (A3, A5, A8, A9) confirm that the rule of law is strictly followed

32 This section represents the author’s own analysis of the dimensions of corruption across the countries within the regional groups. It is based on individual analysis of the case studies, observations, and expert interviews.

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and highly respected. There can thus be a negative relationship between rule of law and corruption. While the rule of law is generally strong across these countries, which have not scored close to 1 on either indicator, in many instances the judiciary lacks impartiality. Judges are mostly appointed by the monarch, cases between nationals and non-nationals were often biased towards nationals, and critical cases involving high-profile individuals were settled out of court. The region’s rulers have enjoyed discretionary powers, with authority highly centralized. Even though in all cases there has been respect for the rule of law, distinct features caused higher corruption in Oman (biased judiciary), Bahrain (minority rule discriminating against the majority), Kuwait (judiciary influenced by the ruling elite), and Saudi Arabia (personal interpretations of laws and fatwas ).33 Hypothesis 2 The higher the respect for political rights, the lower the levels of corruption. The Freedom House political rights index has been used to analyze this hypothesis, and the Gulf countries have scored between 5 and 7, except Kuwait which has scored 4.34 The scores reflect restricted political freedoms and constrained political participation within the countries. Big tribes and families have enjoyed influential positions in the decisionmaking processes, and ‘traditional’ means of political participation have been followed, since political parties are banned in all the countries in the region, with limited parliamentary elections taking place (Kuwait and Bahrain allow political societies/communities to function instead of political parties). Therefore, political rights were restricted within all the countries except Kuwait and Bahrain with the population unable to play any significant role, while the ruling families and big tribes were the main actors within the political system. The limited parliamentary elections held in the region’s countries have led to loyalty to the royal families. Moreover, civil society organizations have been mostly governmental, while non-governmental ones served no purpose within those societies, being neither able to influence the agendas of the ruling elite nor address specific issues. 33 These aspects are discussed within each of the case studies. 34 Kuwait has scored better due to the consistent challenge by parliament to the

government’s authority (please refer to the case for further details).

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The general features of these non-democratic regimes and the tight restrictions by the governments on political participation indicate that their political settings provided the opportunity for political corruption to flourish, since the political elites had extensive powers and managed to run the countries without being accountable. In other words, the powers of the rulers were never challenged or contested during the period of study. The lack of variation in the political rights scores across six regimes does not assist in establishing a strong causal relationship between political rights and corruption in the region. Hypothesis 3 The higher the freedom of the press, the lower the levels of corruption. According to the Reporters without Borders Press Freedom index, Kuwait, Qatar, UAE, and Bahrain have better rankings than Oman and Saudi Arabia during the period under study. This is relatively in line with their scores on the Corruption Perception Index. The country case studies demonstrate that freedom of opinion and expression is not guaranteed, bearing in mind the restrictions on tackling certain issues related to the ruling families and their legitimacy, along with other sensitive topics. The Gulf governments have practiced a high degree of censorship over different media outlets and publications. However, many of the Gulf region countries have scored relatively well on press freedom. This may be due to the passivity of populations that lacked interest in political activity and care taken by journalists to avoid getting into trouble for tackling these matters. Although perception of corruption is higher in Bahrain and Saudi Arabia due to the limited press freedom, this variable does not show a strong negative relationship with corruption due to the nexus of different contexts within those countries. Hypothesis 4 The better the quality of regulation, the lower the levels of corruption. The regulatory efficiency indicator in the Heritage Foundation’s Business Freedom Index has been used to analyze this variable, but the absence of precise data on the quality of regulation has made it difficult to reach a strong conclusion on this hypothesis. Bahrain maintained a free business environment over the period of study, while the other countries had varying scores with some case studies indicating a negative relationship with corruption.

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With market regulation in place, investments are restricted to specific fields, and the tribes and big families in these countries enjoyed preferential treatment in economic activities during the period of study. Markets across most of the countries are open, mainly due to their oil wealth. Generally, the economies of the Gulf region are controlled to a great extent by the ruling families and their close circles, and it can be assumed that the monopoly over the oil and gas industry, coupled with the secrecy surrounding this sector, may have enabled corrupt practices to occur. Lack of adequate economic competition in the market has been a clear cause of corruption in Qatar, while the modest level of regulation and/or the failure to abide by it has contributed to corruption in Oman, Kuwait, and Saudi Arabia.35 Hypothesis 5 The greater the economic openness, the lower the levels of corruption. The Trade Freedom index and membership of the WTO have been used to reflect how far the country is integrated in the global trading community. The Gulf countries have generally scored well on the Trade Freedom index (averaging 70) due to their oil richness being their main trading activity. Saudi Arabia was the last of the six Gulf countries to join WTO, in 2005, corresponding to its most corrupt ranking on the CPI among the GCC countries. Even though this variable does not clearly relate to corruption levels in the Gulf region countries, it may have an impact on the lower levels of corruption witnessed among its countries due to their openness and integration in global trade. Hypothesis 6 The richer the country is in natural resources, the higher the levels of corruption. Analysis of this variable is based on the percentage of natural resource rents in GDP of a given country. Across the cases, this variable has an imprecise causal relationship with corruption. The data on rents does not offer a clear explanation for the variable, and the lack of data for the oil and gas sectors in the Gulf region is also challenging—even natural resource revenues were not revealed in government budgets during the period of study. 35 This is elaborated upon within the analysis of each case study.

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However, the Gulf countries—rich in natural resources and enjoying a considerable percentage of the world’s oil and gas reserves—scored better than the rest of the case studies on the Corruption Perception Index. Even though this variable does not show a direct causal relationship with corruption, it shows other outcomes. First, the Gulf countries (apart from Saudi Arabia) have witnessed less corruption than the other countries, which may be due to their higher GDP, small populations enjoying high GNI per capita, and well-functioning institutions ensuring the welfare of their citizens. Second, these governments’ full control over natural resources have provided more opportunities for ‘undocumented’ grand corruption to occur, with state control and a general lack of transparency in the oil sector and the most senior positions held by ruling family members. There are two sides to the analysis of the natural resource endowments in the region as regards petty and grand corruption. On one side, this wealth provided a welfare system that met citizens’ needs, thus limiting their incentive to become involved in petty corruption. On the other hand, the regimes’ control over the oil and gas industries and the discretion practiced in regulating and managing this industry, implies the existence of grand corruption, especially in light of the appointment of ruling family members to leading companies and investment facilities affiliated to the field. Hypothesis 7 The higher the level of income inequality, the higher the levels of corruption. This book has used the World Bank GINI coefficient as an indicator to analyze income inequality. Reaching a robust finding on this variable has been difficult, since data is lacking for the Gulf countries, so that systematic comparison over the whole region had to be based on reports, observation, and interviews. High levels of human development, welfare societies and the high income of these countries can generally be a cause of lower corruption levels than in the rest of the MENA region. The high incomes and good quality of life of the citizens, and their dependence on the state to manage their lives may explain the lower perception of petty corruption. The lack of public interest in active political participation is a consequence of these countries’ welfare benefits and the absence

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of taxes.36 In this respect, income inequality has not shown a direct causal relationship with corruption among the Gulf countries. Hypothesis 8 The higher the poverty rate, the higher the levels of corruption. There is also a lack of data on poverty rates in the oil-producing countries. However, the Gulf countries have generally witnessed lower levels of corruption than the rest of the MENA region. Qatar, UAE, Kuwait, Bahrain, and Oman are the least corrupt countries in the MENA region and have the highest GNI per capita respectively (World Bank data). These countries have also shown little or no petty corruption, which is confirmed by both the expert interviews and the literature. Hypothesis 9 The higher the literacy rate, the lower the levels of corruption. Literacy rates are high across all cases, reaching an average of 90% among most of the countries. The hypothesis on the existence of a negative relationship between literacy rates and corruption is therefore not applicable to the six countries. However, analysis relating to each country shows clearly that in some cases the quality of education is a valid variable in relation to corruption. Qatar, UAE, Kuwait, and Bahrain—which rank better on corruption levels—have good education systems in place, offering high-quality basic and higher education for all citizens, while the analysis of Oman and Saudi Arabia shows that many aspects of good-quality education accessible to all are missing. Both these countries have witnessed petty corruption within the lower levels of their bureaucracy. Hypothesis 10 The more women are empowered, the lower the levels of corruption. World Bank data on the percentage of women in the labor force and in parliament during the years under study have been used as indicators. Women lack a significant role in society due to traditional and cultural attitudes within the Gulf countries, suggesting an unclear causal relationship between women’s empowerment and corruption. Throughout the analysis of the case studies, it has been clear that women have been deprived 36 This fits in with the ‘rentier states’ argument discussed earlier in this book.

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of many their social and political rights in the respective countries (especially in Saudi Arabia). Moreover, the discrimination found against certain groups within the societies under study (minorities, religious sects, indigenous groups, and immigrants) indicates a lack of social equality, and not just gender equality, giving more scope for corruption in the form of preferential treatment and nepotism based on personal affiliations.37 Although in the Gulf region the minority of the population are generally citizens and the majority expatriates, the latter are not entitled to the wide range of privileges granted to citizens. This ‘social inequality’ takes many forms, with expatriates who have contributed actively to development of the countries in many ways disconnected from them, lacking state identity or the opportunity to express their opinions, and having limited legal, social, or economic rights. Moreover, there are no integration plans for expatriates, and recently, national plans in all the Gulf countries have seen expatriates in senior positions in private-sector industries replaced by nationals. Hence nationality plays a more significant role in the employment process than considerations of fairness or equal opportunities. The yawning social gap between nationals and nonnationals can be said to open up more opportunities for corruption, apparent in widespread favoritism and nepotism networks. Minorities also face discrimination, except in Bahrain where the ruling family is Sunni and the Shi’a majority are discriminated against, reinforcing the preferential treatment of the minority and the absence of political and civil rights for the majority. To sum up, there is a strong resemblance between regime characteristics in the six countries, where the group of political variables (rule of law, political rights, and freedom of the press) reflect a negative relationship with corruption, especially the rule of law variable which has shown a relationship with political corruption in most of the case studies. It is clear that grand corruption among the political elites in the Gulf region is common, since the ruling families enjoy ultimate power and lack accountability to their populations. There is less scope for political participation and freedom of expression, with the general public deprived of an active political role, unless they belong to the royal family or its close circles and tribes, and unable to openly express their opinions or criticize the government. This is reflected in widespread nepotism and favoritism in

37 This was confirmed during all the expert interviews.

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the whole system across the countries in the region A feature exclusive to the Saudi Arabian regime is the ‘sacred authority’ of the Saud family, which adds another layer of legitimacy to their uncontested rule in the country and is a major cause of corruption in the Kingdom. As a group, the economic variables (quality of regulation, economic openness, and natural resource endowments) reflect a negative relationship with corruption and demonstrate the presence of grand corruption among the six countries, due to their limited openness to investments, the monopoly of the government over the natural resources industries, and the widespread nepotism and preferential treatment in the market that lead to regulations being flouted in many instances. The Gulf countries scored better than the rest of the MENA countries on the Human Development Index, with better country classifications and higher income levels. This implies that, generally, the better the human development in a given country, the lower the levels of corruption. The development variables as a group (income inequality, poverty rates, literacy rates, and women’s empowerment) show no strong causal relationship with corruption. The high literacy rates in the six countries did not help in reaching a causal relationship with corruption across the region, but the quality of education did offer some explanation in relation to corruption. By and large, the four variables acted as catalysts for higher corruption to take place in the form of preferential treatment, nepotism, and favoritism. This in effect intensified social inequality within these countries’ populations. In conclusion, the Gulf countries have the most constrained political systems in the MENA region, lacking any political competition or political parties, but their lower levels of corruption are mainly owing to the better functioning political institutions and the widespread acceptance of the ruling monarchs by the public. This is accompanied by negligible interest in engaging in the political process, which may explain why these countries in particular scored better on the other two indicators of equality of citizens before the law and freedom of the press. The ruling families in these countries have been in total control of the political and economic scenes, holding all the high-level positions and limiting political participation (except in Kuwait and Bahrain).38 Corruption is present as a distinct phenomenon among the Gulf region countries, with a strong occurrence

38 Refer to the case studies for further details.

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of grand corruption among the ruling elites, big tribes, and their close circles. Each variable had a different impact on the intensity of corruption in the region, but the main trigger for corruption was the strong hegemony of the royal families over their governments, resulting in less openness in their economies and direct control over the main industries, opening up more opportunities for grand corruption to occur, along with various forms of nepotism, favoritism, and preferential treatment.

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Johnston, M. (2005). Syndromes of Corruption: Wealth, Power and Democracy. Cambridge: Cambridge University Press. Jones, J., & Ridout, N. (2005). Democratic Development in Oman. Middle East Journal, 59(3), 376–392. Kamrava, M. (2009). Royal Factionalism and Political Liberalization in Qatar. Middle East Journal, 63(3), 401–420. Kapiszewski, A. (2001). Nationals and Expatriates. Population and Labor Dilemmas of the Gulf Cooperation Council States. Reading, UK: Ithaca Press. Katzman, K. (2017). Bahrain: Reform, Security and U.S. Policy. Congressional Research Service. Kemp, L. J., Madsen, S. R., & El-Saidi, M. (2013). The Current State of Female Leadership in the United Arab Emirates. Journal of Global Responsibility, 4(1), 99–112. https://doi.org/10.1108/20412561311324096. Accessed April 04, 2020. Khatib, L. (2013). Corruption in Qatar? The Link Between the Governance Regime and Anti-corruption Indicators (Working Paper No. 40). European Research Centre for Anti-corruption and State-Building. Kuwait Constitution. (1962). Available at: http://www.wipo.int/edocs/lex docs/laws/en/kw/kw004en.pdf. Accessed April 04, 2020. Lahn, G. (2016). Fuel, Food and Utilities Price Reforms in the GCC: A Wake-Up Call for Business. Chatham House. https://www.chathamhouse.org/sites/ default/files/publications/research/Food%20Fuel%20and%20Utilities%20P rice%20Reforms%20in%20the%20GCC%20A%20Wake-up%20Call%20for% 20Business.pdf. Accessed April 04, 2020. Law 12. (2004). Law No. 12 of 2004 on Private Associations and Foundations. Qatar. https://www.almeezan.qa/LawView.aspx?opt&LawID=3956&TYPE= PRINT&language=en. Accessed April 04, 2020. Losman, D. L. (2010). The Rentier State and National Oil Companies: An Economic and Political Perspective. The Middle East Journal, 64(3), 427–445. Ministerial Decision. (2006). Ministerial No. 311 of 2006 on the Formation, Work and Registration System of the Trade Unions and Labour Associations and the General Federation of the Sultan of Oman’s Labourers. http://ilo.org/dyn/ natlex/natlex4.detail?p_lang=en&p_isn=75402&p_country=OMN&p_count= 123&p_classification=02&p_classcount=8. Accessed April 04, 2020. Nakash, Y. (2006). Reaching for Power: The Shi’a in the Modern Arab World. Princeton, NJ: Princeton University Press. Nasr, V. (2007). The Shia Revival: How Conflicts Within Islam Will Shape the Future (pp. 92–93). London, UK: W. W. Norton. Neumann, R. E. (2013). Bahrain: A Very Complicated Little Island. Middle East Policy Council. Available at: http://www.mepc.org/bahrain-very-compli cated-little-island. Accessed April 04, 2020.

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Nonneman, G. (2006). Political Reform in the Gulf Monarchies: From Liberalization to Democratization? A Comparative Perspective (Working Paper). Durham: Institute for Middle Eastern and Islamic Studies, University of Durham. Noreng, Ø. (1997). Oil and Islam. Social and Economic Issues. Chichester: Wiley. North, D. C., & Weingast, B. R. (1989). Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England. The Journal of Economic History, 49(4), 803–832. Odine, M. (2011). Middle East Media: Press Freedom in Kuwait. Journal of Advanced Social Research, 1(2011), 177–190. Okruhlik, G. (1999). Rentier Wealth, Unruly Law and the Rise of Opposition: The Political Economy of Oil States. Comparative Politics, 31(3), 295–384. Okruhlik, G. (2002). Networks of Dissent: Islamism and Reform in Saudi Arabia. Current History, 101(651), 22–28. Okruhlik, G. (2004). Making Conversation Permissible: Islamism in Saudi Arabia. In Q. Wiktorowicz (Ed.), Islamic Activism: A Social Movement Theory Approach (pp. 354–384). Bloomington: Indiana University Press. Okruhlik, G. (2005). The Irony of Islam (Reform). Washington Quarterly, 28(4), 153–170. Okruhlik, G. (2010). Saudi Arabia. In M. P. Angrist. (Ed.), Politics & Society in the Contemporary Middle East (pp. 417–444). Boulder: Lynne Rienner. Peterson, J. E. (2009). Life After Oil: Economic Alternatives for the Arab Gulf States. Mediterranean Quarterly, 20(3), 1–18. Polity IV: Bahrain Country Report. (2010). Political Instability Task Force (PITF). Polity IV: Kuwait Country Report. (2010). Political Instability Task Force (PITF). Polity IV: Oman Country Report. (2010). Political Instability Task Force (PITF). Polity IV: Qatar Country Report. (2010). Political Instability Task Force (PITF). Polity IV: Saudi Arabia Country Report. (2010). Political Instability Task Force (PITF). Polity IV: UAE Country Report. (2010). Political Instability Task Force (PITF). Qatar Constitution. (2004). http://portal.www.gov.qa/wps/portal/!ut/p/a0/ 04_Sj9CPykssy0xPLMnMz0vMAfGjzOIt_S2cDS0sDNwtQgKcDTyNfAOcL D3cDdw9zfULsh0VAQl92_s. Accessed April 04, 2020. Qatari Penal Code. (2004). Law No. 11 of 2004 Issuing the Penal Code 11 / 2004. http://Gulfmigration.eu/database/legal_module/Qatar/National% 20Legal%20Framework/Anti-trafficking/2.2%20Penal%20Code%2011%202 004_EN.pdf. Accessed April 04, 2020. Ramazani, R. K. (1986). Shi’ism in the Persian Gulf. In J. R. I. Cole & N. R. Keddie. (Eds.), Shi’ism and Social Protest (pp. 30–54). London: Yale University Press.

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Valeri, M. (2009). Politics and Society in the Qaboos State. London: Hurst & Company Publishers. Weiner, S. J. (2016). Kinship Politics in the Gulf Arab States (Issue Paper No. 7/2016.). The Arab Gulf States Institute in Washington. Winckler, O. (2000). Gulf Monarchies as Rentier States: The Nationalization Policies of the Labor Force. In J. Kostiner (Ed.), Middle East Monarchies: The Challenge of Modernity (pp. 237–256). London: Lynne Rienner. Wright, S. (2006). Generational Change and Elite-Driven Reforms in the Kingdom of Bahrain (Sir William Luce Fellowship Paper No. 7. Durham Middle East Papers No. 81. Wright, S. (2008). Fixing the Kingdom: Political Evolution and Socio-Economic Challenges in Bahrain. School of Foreign Service in Qatar, Center for International and Regional Studies, Georgetown University. WTO. (2005, February). Further Reforms Would Help Sustain Already Impressive Economic Growth. Trade Policy Review: Qatar. Press Release. https://www. wto.org/english/tratop_e/tpr_e/tp244_e.htm. Accessed April 04 2020. Yamani, M. (1997). Health, Education, Gender and the Security of the Gulf in the Twenty-First Century. In D. E. Long & C. Koch (Eds.), Gulf Security in the Twenty-First Century (pp. 265–280). Abu Dhabi: The Emirates Centre for Strategic Studies and Research. Yom, S. L., & Gause, F. G., III. (2012). Resilient Royals: How Arab Monarchies Hang On. Journal of Democracy, 23(4), 74–88. Zeffane, R., & Kemp, L. J. (2012). Emiratization: Challenges of Strategic and Radical Change in the United Arab Emirates. In T. Dundon & A. Wilkinson (Eds.), Case Studies in Global Management Strategy, Innovation and People Management (pp. 306–314). Prahran: Tilde University Press.

Further Reading Al-Muslimi, F. (2016). A History of Missed Opportunities: Yemen and the GCC. Carnegie Middle East Center. Available at: https://carnegie-mec.org/diwan/ 62405. Accessed April 04, 2020. Barnett, M., & Gause, R. (1998). Caravans in Opposite Directions: Society, State and the Development of a Community in the Gulf Cooperation Council. In E. Adler & M. Barnett (Eds.), Security Communities. Cambridge Studies in International Relations (pp. 161–197). Cambridge: Cambridge University Press. Burke, E. (2012). One Blood and One Destiny? Yemen’s Relations with the Gulf Cooperation Council (No. 55241). LSE Library, London School of Economics and Political Science.

CHAPTER 7

Corruption in North Africa: Monopoly of Power and Widespread Ignorance

The five North African countries (Fig. 1) are Algeria, Egypt, Libya, Morocco, and Tunisia. These countries have witnessed relatively close levels of corruption during the period under study, except Libya, which has been the worst performing among them. Many variables have combined to create a concrete base for corruption to spread deeply in North Africa, due to the unique political and socio-economic dynamics of the region. This became apparent during 2011, when the Arab Uprisings took place in Tunisia, Egypt, and Libya, countries that have witnessed massive political corruption, widespread patronage networks, and nepotism (Raghavan 2011; Chrisafis 2011; Saigol 2011). The political systems in Algeria, Egypt, Libya, and Tunisia are presidential, while Morocco is the only hereditary monarchy in the region. During the period of study, the five countries were categorized as authoritarian regimes with a single party dominating the political scene, the executive being the most powerful authority. Political parties were allowed to organize, and electoral systems were in place. However, this was merely cosmetic, leading to the existence of illiberal democracies. Elections were neither competitive nor fair (Khashan 2000; Lust 2017). Opposition groups, mainly Islamic ones, faced severe oppression (banned in most of the countries), and civil society organizations and media were very often ineffectual in spreading awareness and pressuring the governments. The nomination of judges by the government hindered the impartiality of the © The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_7

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Fig. 1 Map of North Africa

judicial authority, and the executives had extensive powers to interfere in the rule of law, impeding the civil rights and political freedoms of the populations. With centralized powers in the hands of the four presidents and the monarch, along with their ruling parties, no real political competition or participation took place across those five countries, and political corruption had the chance to spread. The security institutions and the military have played important roles in the political processes and decision making within the five countries, acting as a supporting pillar for the powers of the executive branch and rebuffing any challenges that might threaten the stability of their rulers (World Bank 2003; Chêne 2008; Lust 2017). Although these countries’ constitutions allow for the existence of parliaments and elections have taken place regularly, there has been less room for political participation, since most of the time, the electoral processes were criticized for being unfair and favoring the ruling parties. This, in turn, made a mockery of the concepts of political competition and political rights. Moreover, the oil wealth in Algeria and Libya has enhanced the ‘rentier states’ concept, allowing both governments to be more authoritarian and limiting the political demands of their populations for participation and representation (World Bank 2003; Dunning 2007; Di John 2007; Schwarz 2008; Gilpin 2011). Civil society organizations have increased during the past two decades across the North African countries, but they were not able to influence the regimes or foster any real participation in governance processes. They faced several constraints on the scope of their activities in society and kept a low profile most of the time, taking no significant part in promoting, lobbying for, or pushing any topics on the agenda of the political elite.

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They were therefore unable to have any impact on the public policies of the government (Transparency International 2009). In theory, the five countries have had an independent media and press, but in practice, these faced many restrictions on their work, including censorship of published content, restrictions on addressing sensitive issues that might threaten the political stability of the regime, harassment, and imprisonment of journalists. Political corruption has been deeply rooted among the elite, as laws were occasionally tailored to satisfy the regimes’ aims (i.e., extending presidential terms, candidates’ ages, enacting emergency laws, banning opposition groups). In this regard, there has clearly been a lack of good governance in the five countries, since the nature of their political regimes embedded practices that ensured the rulers’ control over the legislative and judicial branches, hampering the autonomy of political institutions. This has resulted in weak, dysfunctional institutions, along with the absence of accountability of the government, exacerbated by the absence of any mechanism to monitor their conduct, where there was a clear lack of government integrity (World Bank 2003). The economic structures of the five countries have been profoundly affected by their political scenes. They were generally not well developed, with inefficient institutions and unclear policies. Since the 1980s, Tunisia, Egypt, and Morocco have initiated economic reforms attempting to align with programs designed by international organizations (IMF and The World Bank) to assist with liberalizing trade and allowing the private sector to flourish. The governments essentially planned to allow increasing investments and enhanced trading capacities. These plans succeeded to some degree—especially in Tunisia—in achieving economic growth for some time, but the regimes have not sustained growth or development. Generally, the economies of Tunisia, Egypt, and Morocco have been relatively diversified compared to those of Algeria and Libya, which relied mainly on richness in natural resources as their main economic activity, witnessing less competitive markets and inadequate trade openness. In fact, until recently neither country had joined the WTO. The governments of all five countries owned significant shares in the economic activities, the elites and their close circles enjoying preferential treatment, bypassing regulations and having unconstrained access to state resources. The governments have had business interests, owning significant shares in industry through monopolies and oligopolies. The elites also had the final say during privatization, granting privileges to their clans and to big

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economic tycoons in their countries, leaving the economies under the control of tiny groups. Regulations and procedures within the five countries were not transparent, which allowed corruption to easily flourish at all levels of the administration, ranging from grand to petty corruption, with crony capitalism spreading across the North African regimes (Nadgrodkiewicz 2008). As for the societal dimensions in this region, public services have been neither well maintained nor adequately delivered (Ross 2006; Holmberg and Rothstein 2011; Gerring et al. 2012). The quality of education has been weak compared to the Gulf states, poverty rates averaged 20%, and persistent income inequality has been observed among different classes of society in the five countries. Most public-sector wages have been too low to satisfy people’s needs and secure a decent standard of living, and discrimination against women and minorities was apparent in all countries except Tunisia. Petty corruption has been commonplace, mostly taking the form of lower-level public officials accepting bribes from members of the public for the performance of services. Low wages are a huge incentive for such activities, combined with lack of awareness and acceptance of these illegal practices as normal behavior. There are also a number of differences in political, economic, and social status between these five countries, leading to different levels of corruption being observed across the region. The following sections tackle each of the five countries separately to provide an in-depth analysis of the causes of corruption in each case. The last section consists of a cross-national comparative analysis addressing the ten hypotheses of the study.

1 1.1

Tunisia

Regime Characteristics

Tunisia had only two presidents between independence in 1957 and 2010. In 1959, Habib Bourguiba established a presidential political system after abolishing the monarchy. He consolidated his power through a single-party regime; his party (the Socialist Constitutional Party) became the only legal party in 1963. The labor unions, which were the main actors in the Tunisian struggle for independence, were integrated into the regime and Bourguiba was declared president for life. In 1987, Zine El Abidin Ben Ali took over the presidency after proclaiming Bourguiba

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unfit for office for health reasons. Soon after, he changed the party’s name to the Democratic Constitutional Rally (RCD), reflecting the government’s new direction, and amended the constitution in 1988 to allow for a multiparty electoral system (Murphy 1999). Ben Ali won five presidential elections before the 2010 revolution. In 1989 and 1994, he was the only registered candidate, and in a multiparty election in 1999 in which there were three registered candidates, he still won with 99% of the vote. Afterward, a constitutional amendment was passed that required the presidential candidate to be endorsed by 30 legislators/mayors, which excluded all non-RCD candidates from running for office, as virtually all the legislators/mayors belonged to the RCD. Following a referendum in 2002, numerous constitutional amendments were enacted, including canceling the limit on presidential terms, extending the age limit for presidential candidates to 75, granting former presidents judicial immunity for life, and establishing a second legislative body, the Chamber of Advisors, to complement the Chamber of Deputies. Ben Ali won 90% of the vote in the 2004 and 2009 presidential elections1 (Murphy 1999; Layachi 2000; Sadiki 2002, 2003; Boubekeur 2009; Gobe 2009). The 1959 constitution is weak as regards separation of powers, and checks and balances. Even though Tunisia had a bicameral parliament, a president, and a government appointed by the president, the legislative branch had less power than the executive. Besides, the hegemony of the ruling RCD party, which held around 80% of the seats in parliament throughout most of the electoral rounds in the years that followed, made the separation of powers between the government and parliament only theoretical. The parliament had less capacity to contribute to the legislative process since the president was allowed to rule in the legislative branch by decree. While a second chamber was established in 2005 to enhance the role of the legislative branch, bills almost always originated from the executive and were usually passed with very minor changes. The Chamber of Advisors’ existence blurred the parliament’s functions still further. The executive branch seemed more powerful and in control, with greater capacity and a stronger influence on the president than the

1 In 2008 a new law introduced a condition for presidential candidates, stating that the candidate had to have led a party for a minimum of two years. This prevented the two main opposition parties from running for presidential elections in 2009.

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parliament (King 2009). As for the judicial branch, the judges are ‘constitutionally’ independent; however, since the president appoints them after nomination by the Council of the Judiciary, they are subject to political pressures. In reality, the judiciary has been intensely influenced by the executive, especially in sensitive political incidents and cases. The autonomy of the judicial authority was almost always limited whenever it clashed with the interests of the president or his clans. During Ben Ali’s rule, most civil servants and officials shared a ‘quasisecular’ notion of the state. Although Islam is the official state religion and an essential part of Tunisian identity, the country is defined as a secular and civil society, with criminal laws based on European models. Hence, any political demands for a more visible role for Islam in Tunisia have been suppressed (King 2009). Throughout the Ben Ali era Tunisia remained steadily authoritarian and repressive in every respect. The Polity IV database categorized Tunisia during Ben Ali’s era as an ‘autocracy’ and a ‘closed anocracy’ scoring between −3 and −4. While the government attempted partial democratization from 1987, the reforms failed to create a pluralistic multiparty system with a liberal political environment allowing real political competition and fair elections. Presidential elections were held at fair intervals, but Ben Ali always won uncontested, maintaining his hegemony over the country. The lack of a system of separation of powers is reflected in the V-Dem rule of law indicators. Tunisia scored 0.51 in equality before the law for most of the years under study, and the judicial constraints on the executive index scored very low at 0.19 for almost all the years, doing slightly better, at 0.33, only in 2010. This point was highlighted during interview A15 with a government official, who stated that: “the whole legislative branch was corrupt, and the executive has been controlling all the processes within the political scene”. In this sense, the corruption witnessed in the country is due to disrespect for the rule of law on many subjects, especially the limited judicial independence and balance of powers. Regarding freedom of association and assembly, Ben Ali initially allowed a multiparty system in 1988, prohibiting parties from being established based on religion, race, language, or regions. But there was a consensus among all political parties, even the opposition ones, on recognizing the prominent role of the RCD in the political scene. In 1991, An-Nahda (Renaissance), an Islamic opposition party. was identified as a

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terrorist organization and banned2 (Sadiki 2003; Kausch 2009; Human Rights Watch 2010). In a superficial effort in 1994 to pluralize the parliament, the government provided the opposition with fixed minimum representation in the Chamber of Deputies, regardless of the number of votes they won, and later on, in 2009, the opposition parties’ minimum representation became 25%. While six parties were present in the parliament, only three of them were acting independently and were critical of the regime. At no time were the legal political parties able to influence government policies, as the restrictions on the legislative branch’s mandate rendered them powerless. The Tunisian General Union of Labor (UGTT) was incorporated into the regime after the Bourguiba era; the government could intervene in its leadership appointments and independent members were prosecuted. Broadly, there was no freedom of association in society, and such associations and networks as did exist were more concerned with general issues like gender, development, and environmental matters. The ruling party’s cooperation with associations and interest groups resembled state control (Sadiki 2003; Kausch 2009; Human Rights Watch 2010; EMHRN 2010). Even though the constitution had ostensibly created a multiparty system, this was dysfunctional. Legalized political parties were incapable of assuming any role in the political arena and were suppressed by the regime. Tunisia was categorized as ‘not free’ through the twelve years under study, with political rights scoring between 6 and 7. The opposition was not effective; it was merely cosmetic, and civil organizations were also superficial, being highly controlled by the government. The legal parties were mostly integrated into the regime to represent ‘fake’ diversity in response to the needs of the government. The limitations on freedom of association were a huge obstacle to political participation of the population (Sadiki 2003). Even so, political movements were actually active in Tunisia much earlier than in other countries of the region. Entities like labor unions, which had helped in Tunisian independence, 2 Many of its members were arrested and accused of attempting to overthrow the regime. It was suspected of having links with violent Islamic movements, and by the mid-1990s, it had completely disbanded. The regime continued over the years to oppose legalizing An-Nadha as an official party, using the threat of extreme Islam to gain support from the public and the international community for its oppressive action against the party’s activists. Due to the ruling RCD party’s hold on power, many other opposition parties faced significant limitations to accessing public office institutions and fair competition.

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offered a solid foundation for awareness and activity. Even if they had no apparent influence at that time, their awareness of the ongoing suppression created a strong base for the major social changes that were to come as a result of public demand (Sadiki 2003). The legal steps taken by the government towards liberalization and pluralism were in reality merely symbolic. Abuses and political restrictions on human rights activists and opposition parties continued, along with manipulation of elections. Opposition parties were either powerless, banned, dismantled, oppressed, or fully submissive to the regime and its party. Political corruption was intense due to the absence of free and fair elections, the constitutional restrictions, the hegemony of the RCD, and the consequent lack of real political participation, political and civil rights. The country’s performance over the years on corruption and political rights has deteriorated slightly, reflecting a negative causal relation between the two variables (Fig. 2). As for freedom of expression, the 1959 constitution ensured freedom of expression (Chapter 8) as long as “it does not address the regime”, and civil rights (Chapter 5) are guaranteed “within the limits of the law” (Tunisia Constitution 1959). The lack of freedom of expression was emphasized during interview A14 with a former government official, who mentioned that the constitutional clause securing civil rights “within the limits of law” has always been abused by the authorities to repress opposition and imprison anyone who stood against the regime, adding that this was a main reason for the revolution. In effect, these restrictions impeded any critical opposition to the regime, denying journalists and independent organizations their civil rights. Press freedom was not guaranteed, especially when voicing criticism of the regime. The government screened press releases before publication to make sure they were in line with the regime’s objectives, although later, self-censorship became the norm. Despite minor legal reforms of human rights status during the 1990s, there was a series of unfair trials, arrests, and confrontations with journalists critical of the government. Any opposition—whether from politicians or judges—met with harassment (King 2009; Mills 2010; Hibou 2011; Ayeb 2011). Although Tunisia is well connected as regards internet-based media, its Press Freedom Index scores of between 48.1 and 72.5 illustrate the severe restrictions on journalists in Tunisia. This lack of freedom of expression is in line with the corruption levels in the country, and reflects the constant threat of oppression by the regime and the limitations it imposes on the voicing of popular opinion. The regime demonstrated

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Fig. 2 Regime Characteristics in Tunisia

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its attitude to social discontent by prosecuting journalists who reported critically on civil unrest in Gafsa in 2008. This was a clear example of political corruption in the regime, with oppression against those who rebelled against the government’s corruption and nepotism (Gobe 2010). The Tunisian regime demonstrated low respect for the rule of law, absence of political rights, and restricted freedom of the press. Ben Ali’s regime has limited the people’s ability to engage in politics. Elections were unfair, and political competition was manipulated to serve the government’s interests. Taken together, the political variables caused corruption in the country, especially in view of the tight hold of Ben Ali and his party on power and their hegemony over the political scene. 1.2

Economic Status

Economic development began in the 1970s when Bourguiba launched a series of policies to attract foreign investment and promote private-sector development. The country was prosperous, stimulating both internal and export markets. This was enhanced by its closeness to Europe, the low labor costs, political stability, and the existence of infrastructure. During Ben Ali’s era, the economy continued to progress compared to its North African neighbors. Generally, the government maintained macroeconomic stability, with the economic growth rate reaching 5%, and an annual increase in GDP per capita in excess of 3%. The economy became diversified, with significant growth in services and manufacturing contributing to GDP (World Bank 2007; Bchir et al. 2009; Achy 2011b). The president and his clans controlled the main sectors of the economy and were the most privileged during the economic reforms and privatization procedures. They exercised control over industry through taxation, customs exemptions, and several preferential policies to inhibit their independence. This has disadvantaged the competitive private sector, resulting in a lack of openness, inefficiency, and fewer economic gains for the masses (Hibou 2004). In addition, foreign direct inflows to the country were focused on privatization rather than creating new investment opportunities, reducing jobs for unemployed young people. Another setback resulting from the inadequate economic reforms was the high dependency on the EU in many economic activities. Tunisia was highly reliant on the EU for trade, revenues from tourism, remittances, and FDI inflows. Consequently, the Tunisian economy was more severely affected by the global economic crisis in 2008 than Algeria and Morocco (economic

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growth in 2007 was 6.3% and declined in 2008 to 4.5% then to 3.3% in 2009). The crisis also contributed to a further dramatic rise in youth unemployment (World Bank 2010; Paciello 2010). The economy witnessed growing instability due to its inability to create jobs for the educated and the low wages in the informal sector, which resulted in increasing income inequality and regional disparities (World Bank 2010; Paciello 2010). Tunisia scored 2.72 on the V-Dem index of state ownership of the economy, reflecting the tight direct and indirect control of economic activity maintained by Ben Ali and his close circle, with few sectors free of state domination. Although Tunisia performed well on business freedom, categorized as ‘mostly free’ for the years under study with an average score of 74, the analysis tells a different story. During expert interview A14, it was mentioned that the government has not set up proper regulation of the economic sector, and the president and his inner circles enjoyed economic gains in various activities, manipulating the processes to serve their interests. This was vividly reflected in the Gafsa mining protests against the nepotism and favoritism practiced by the regime (Gobe 2010). The low quality of regulation in Tunisia can therefore be said to have caused higher corruption in the country, especially clear in the form of grand corruption (Fig. 3). While the country has been a member of the WTO since 1995, witnessing more openness in trade than neighboring countries, scores on the trade freedom index were low for many years. Tunisia was categorized as ‘repressed’, denoting that there was neither fair economic openness nor competition due to government control over the economy, which reflects a negative relationship with corruption in the country. Tunisia has insignificant shares of natural resources, and the rents have been very low, averaging 4% for the years under study. Therefore, there is no clear causal relationship between natural resources and corruption in Tunisia. The group of economic variables shows that the regime witnessed less economic openness, limited trade freedom, and low quality of regulation, which is paralleled, directly or indirectly, by the government’s domination of the economy. Therefore, the quality of regulation and economic openness reflect a negative relationship with corruption in Tunisia.

Fig. 3 Economic Status in Tunisia

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Development Status

Support of Bourguiba’s regime extended to the early years of Ben Ali’s era as it was able to deliver opportunities for large segments of the population, resulting in a growing middle class that comprised more than 40% of the population in 2010. In line with its early economic growth, Tunisia’s society witnessed general improvements in many fields, including better access to education for both genders, improved health and housing facilities, social services, development of infrastructure for water and electricity, and extensive subsidies. This involved a complex social structure, with a highly skilled and educated labor force representing Tunisia’s main social class (Romdhane 2006; Harrigan and El-Said 2009). Education in Tunisia is of outstanding quality, and literacy rates are very high, reaching 97.1% in 2010. Literacy rates have no clear effect on corruption, while awareness and education within the population was a catalyst for a reduction in petty corruption. This good quality of education is in line with the arguments above on civil rights and political participation in Tunisian society, which contributed to the perception of less corruption than in its North African neighbors. The regime gained some legitimacy and took the credit for the economic boost and the benefits it brought to the people, whose socioeconomic status was stable and developing. However, this legitimacy started to erode when the positive socio-economic impacts declined. The government was incapable of satisfying the people’s needs in terms of employment opportunities and welfare services. There were various administrative, economic, and political reasons for the regime’s ineffectiveness. Although the country had successfully started the process of economic liberalization in 1987, the reforms did not include aspects like job creation for the growing number of highly skilled young people, regional equality in resource allocations, and decent wage levels. The large highly skilled and educated middle-class labor force faced unemployment and poor wages in the informal sector, resulted in income inequality reaching 40 (Achy 2011b). The labor market was focused on low-skilled manufacturing activities that offered fewer prospects. An additional problem was growing regional disparity despite the general progress of the economy. While inequality reduced in relative terms, the rural regions remained the main contributors to overall inequality. Poverty and regional disparity were direct results of the unequal distribution of public service resources and investments, an outcome of the ruling elite and its

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clans favoring their own regions. The northern and east central regions benefited most from tourism, investment, and employment opportunities, while the south and west central regions witnessed higher levels of unemployment and, consequently, higher poverty levels. This widened regional gaps and income inequality. Other manifestations of inequality are poor basic infrastructure, health care, and quality of education in many less privileged rural regions which had fewer facilities (Romdhane 2006; Amnesty International 2009; Achy 2011b). These setbacks led to a gradual erosion of the middle class, with negative implications for their living standards. The increasing number of unemployed young people deprived a significant sector of the population of the social security benefits derived from work in the formal economy. The cost of living was rising compared to the low wages of civil servants, and the global financial crisis negatively affected remittances from Tunisians working overseas, further worsening the living standards of families in Tunisia (Romdhane 2006; Amnesty International 2009; Harrigan and El-Said 2009; Mahjoub 2010; Marzouki 2011). Another relevant point is the regime’s discrimination against certain groups within society. Tunisia’s development was in the hands of the president and the ruling party, and the party itself approved the lists of families benefiting from social services. Individuals identified as opponents of the regime were excluded from these benefits, while silent citizens were rewarded for their “political passivity” (Romdhane 2006; Boubekeur 2009). This may have contributed to income inequality and poverty rates that reached 23% in 2005. While petty corruption is less visible in Tunisia than in countries like Egypt and Morocco—due to higher levels of education and public awareness causing recognition of the illegality of abusing office—it began to occur on a limited scale because of the increasing neediness of the people and the unstable, shrinking economy. The culture of corruption is not deeply rooted in society, as there has always been an active civil society to create awareness. Petty corruption occurred because the malfunctioning of the system in favor of those in power pushed people to seek other ways of securing a decent life. This was emphasized during expert interview A16, when the professor stated: “petty corruption has not been deeply rooted in the society, and it was generally a shamed practice. But the regime’s inability to respond to the people’s demands has made corruption a resort of action for the masses.” It can be said that grand corruption presented a trigger for the spread of petty corruption and that the rising

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poverty rates contributed to intensifying corruption, the abuse of national resources having deprived the people of the fair allocation and distribution of benefits. Tunisia is one of the most homogeneous among Arab countries. The majority are Sunni Muslims, and the tiny number of Christian and Jewish citizens (0.3%) enjoy freedom of religion. Regarding gender equality, since the 1980s women in Tunisia have been granted political powers and basic rights in terms of education, employment and political participation, and their status is more advanced than in all the other countries in the MENA region. Their share in the parliament has been higher than in all the other Arab states under study—27.6% during the years 2004–2010— and there is an internal quota system, although the percentage of women in prominent political positions did not yet reach the desired level. During interview A14 with a former government official, the interviewee stated: “during Ben Ali’s era, women were empowered as around 36% of public sector heads of departments were women, and around 40% of the ministry of interior employees were women”. Women have been integrated into all fields of society, but their empowerment has no direct relationship with corruption in the country. There is, however, an indirect relationship between women and corruption, in that the greater empowerment of women in Tunisia acted as a catalyst for a reduction in corruption in the country compared to neighboring North African countries (in which women had lesser roles in society and politics). Looking at the development indicators as a group, Tunisia maintained ‘medium human development’ status. Although many aspects of development have impacted societal progress, the economic malfunctioning of the system led to increasing income inequality and poverty rates in society. The two variables show a negative relationship with corruption in Tunisia: the drawbacks of the regime’s policies combined with the abuse of resources by the political elite impeded a fair distribution of resources and enhanced both grand and petty corruption. Nevertheless, petty corruption is not deeply rooted in society, due to the good quality of education in Tunisia and the high degree of political awareness of the public of their civil rights. This is also clear from the empowerment and engagement of women in society since the early 1980s, where the majority in the community have been politically aware and active despite the regime’s restrictions.

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Outcome The political scene was centered around Ben Ali and his ruling party. The government managed to achieve a sound socio-economic performance, maintaining extensive development for quite some time. This helped to strengthen the government’s legitimacy and political stability among the majority of the citizens, securing the regime’s grip on power, but setbacks were apparent, especially towards the end of Ben Ali’s regime. The development process from 1960 until 2010 has benefited Tunisians generally, offering good quality of education, gender equality, and gradual opening up of the economy. However, this was not sustained, and during the last decade, youth unemployment has increased, and regional disparities and poverty have persisted, reaching around 30% during the period 2007–2010. During interview A14 with a former government official, he stated that there has been a “democratic corruption” theme in Tunisia, meaning that the regime has openly abused resources, and this has led to inflation, youth unemployment, and fewer economic gains for the public. He also mentioned that “the Tunisian economy has been scattered among the family members who controlled everything”. Grand corruption has been apparent in the country as a result of centralized political and economic powers, lack of political participation, the integration of the ‘cosmetic’ opposition in the political scene, and the spread of nepotism in the economic sector benefiting the president and his clans while the population were deprived of any economic benefits (Hibou 2004; Nucifora et al. 2012). The above analysis shows the leading causes of corruption in Tunisia to be the lack of political participation and press freedom, which were also highlighted several times during interviews A14, A15, A16, and A17 with an academic, politicians, and a political activist. The lack of economic openness combined with the low quality of regulation are other reasons that later in Ben Ali’s regime increased inequality. The shrinking of the middle class triggered petty corruption, providing more opportunities for corruption to occur in the country (evident in grand corruption).

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2 2.1

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Morocco

Regime Characteristics

After independence in 1956, Morocco’s first constitution, adopted in 1962, defined the country as a “constitutional democracy and social monarchy”. King Mohammed VI succeeded his father, King Hassan, in 1999. The country is unique in the MENA region, in that the king derives his legitimacy from a spiritual authority, assuming descent from the Prophet. He is therefore known as Commander of the Faithful (Waterbury 1973; Boukhars 2010). The Moroccan executive, legislative, and judicial authorities are clearly differentiated in the constitution. The executive branch includes the hereditary monarch, who is the head of state and prime minister. The king enjoys vast authority under the Moroccan constitution. He is the supreme representative of the nation and commander-in-chief of the Royal Armed Forces, heads the Council of Ministers, chairs the Council of State (which approves all bills before they pass to the parliament), sets the agenda for the parliament through an annual speech, chairs the Supreme Council for the Judiciary, appoints the prime minister, approves ministers, issues laws, and signs and ratifies international agreements. He has the authority to dismiss ministers, dissolve parliament, call for new elections, and appoint Supreme Court judges and religious leaders (Morocco Constitution 1996). As for the cabinet, its so-called ‘sovereignty ministries’ (justice, foreign affairs, home affairs, and Islamic affairs) are directly controlled by the royal palace (Layachi 1998).3 The legislative authority has a bicameral parliament, the Chamber of Representatives and the Chamber of Counselors. The powers of the parliament are limited despite the 1996 constitutional amendments establishing an elected bicameral legislative authority. It has scrutiny powers over the government, including on budgetary matters, the right to approve bills, hold ministers accountable, and conduct investigations into government actions. Even though separation of powers is enshrined in the constitution which has been revised several times—in 1970, 1972, 1992, 1996, and 2011—the king has maintained his central role in the government, significant hegemony 3 This has negatively affected the people’s trust and the credibility of the government. Clientelism in the political and administrative structures, known as makhzen, has increased both corruption practices and inequality.

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over the executive authority, and considerable influence over the legislative authority. The judicial authority, headed by the Supreme Court, is independent according to the constitution; however, the king chairs the Supreme Council of the Judiciary, which appoints Supreme Court judges, impairing the autonomy of the judiciary. The legal system in Morocco is based on a combination of Islamic law with French and Spanish civil law; a number of steps have been taken to improve the legal system and simplify procedures to enable smooth access to justice and shorter trials (Layachi 1998; Boukhars 2010; USAID 2010; Maghraoui 2012). Polity IV categorizes Morocco as an ‘autocracy’ scoring −6 for the twelve years under study. The country has performed better than its North African neighbors on the V-Dem indices of equality before law (0.6) and judicial constraints on the executive (0.5). During interview A19 with an academic, he mentioned that even though the country scores well on the rule of law indicators, corruption persists in the political scene as the king enjoys wide authority unconstrained by legal limitations. Regarding political rights, the Moroccan constitution (1996) guarantees a multiparty system, and the parties receive funds from the state based on the votes they obtain for seats in parliament. During the period of study, around 29 parties were active in the country, but few had influential coalitions in the parliament, and their functioning was highly dependent on the personalities of their members rather than party identity. International observers viewed the 2002 parliamentary elections as the first transparent, free and fair elections in Morocco. For the first time, more than 30 women were elected due to the introduction of national womenonly lists. The 2007 elections were likewise positively viewed. However, the turnout was 37, and 19% of the votes cast were blank, reflecting a lack of interest in the process and popular recognition of the powerlessness of the parliament. The constitution guaranteed the principle of freedom of association and assembly, but the government banned Islamic opposition political organization Al-Adl wal-Ihsan (Justice and Charity), and several thousand people were arrested and prosecuted4 (BTI: Morocco 2010; USAID

4 The regime cracked down following the Islamic terrorist attacks in Casablanca in 2003. The movement often held street demonstrations on issues like constitutional reforms and support for certain political issues. Human rights activists asserted that the regime repressed and even tortured political prisoners.

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2010). In 2002, new legislation simplified the rules for forming associations, making them more transparent. However, in practice this was not fully implemented, as the Ministry of the Interior had to be notified in advance about public meetings and demonstrations. According to official Moroccan documents, there has been a significant increase in the number of associations active in areas like social work, economic development, democratization, and human rights. These associations were in constant communication with government authorities, seeking to make their voices heard, yet their impact on the political scene was less obvious. They also had insufficient sources of funding and organization (Maghraoui and Zerhouni 2017). Trade unions are ratified by the government and guaranteed by the constitution, with workers enjoying the freedom to organize and join trade unions. However, unions with less than 35% of the workforce were not recognized as negotiating partners. With regard to human rights, the king took some steps to broaden his legitimacy, such as reconciliation with activists5 (Sater 2007; Maghraoui 2008; BTI: Morocco 2010; USAID 2010; Maghraoui and Zerhouni 2017). With a multiparty system that is active but not influential, Morocco scored 5 for political rights, and the country is categorized as ‘partially free’ (performing better than neighboring states). A limited freedom was allowed for specific groups to establish associations. While the constitution guaranteed freedom of assembly, constant communication with the government was required. Even though there is no direct causal relationship between political rights and corruption in Morocco, the limited political participation, the ban on the Islamic opposition group, and the restrictions on associations imply strong control of political inputs by the king. This enhanced political corruption shows the government’s lack of accountability towards its people (Agrast et al. 2011) (Fig. 4).

5 Since Mohammed VI has succeeded his father, the Moroccan civil and human rights

record has seen its ups and downs. On coming to power, Mohammed VI freed thousands of political prisoners and reduced the sentences of others, besides setting up an arbitration committee and establishing a Reconciliation Commission in 2004 to compensate the families of victims. He also looked into cases of involuntary disappearances of political activists, and sought resolution of other cases for people facing detention.

Fig. 4 Regime Characteristics in Morocco

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Regarding freedom of expression, it is relatively free, and a few reforms of the press code took place in 2002. However, with government ownership of the main media outlets, press freedom has been heavily restricted, and many journalists have been imprisoned for causing offense, crimes that were not clearly defined by law. Journalists practiced self-censorship, were cautious about addressing political and societal issues, and highly circumspect when tackling topics like the monarchy, human rights, Islam, and the Western Sahara—which were not even permitted (Amnesty International 2005). Even though the government has exercised tight control over media output, Morocco has generally scored better than the other North African countries, with an average of 36. There is no correspondence between the changes in press freedom and the perceived levels of corruption in Morocco, although neither indicator varied much over the years of study. Restrictions on press freedom generally imply strong control by the regime over people’s freedoms to openly express their opinions, which in turn can be related to political corruption. With centralized power and extensive authority for the king, and a unique religious dimension to the regime’s legitimacy that effectively barred any opposition, the system in Morocco lacked checks and balances (Agrast et al. 2011; Maghraoui 2012). There was less respect for the rule of law, political freedoms were allowed with limitations on acting and joining associations, and the freedom of the press was also restricted, as some subjects were taboo. While political corruption has been apparent during the period of study, as a group the three variables show a negative relationship with corruption in the country. 2.2

Economic Status

Morocco is a developing economy, categorized as a lower-middle-income country according to the World Bank. It witnessed GDP growth in the 2000s, along with higher investment and reform in many sectors after a period of stagnation during the 1990s. Morocco’s economy is small compared to the other North African countries, with less diversified activities. It is primarily dependent on agricultural production, which contributes around 17% of GDP yet employs more than 40% of the population, and is unstable due to the irregularity of rainfall throughout the year. GDP growth is therefore vulnerable to meteorological conditions (BTI: Morocco 2010).

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The king dominated the economy, approving investments and being the largest investor and owner within the agricultural sector through his family. The king and his clans controlled key sectors in the economy (agribusiness, insurance, real estate, telecommunications, and technology), while the wave of privatizations in 1999 called for “a new concept of authority”. These transformations gave rise to a new class of small and medium-sized independent entrepreneurs. The involvement of the royal palace in economic activities sparked the term Alaouziation, derived from the name of the royal family, to describe the latest economic status of the country (Maghraoui 2012). King Mohammed VI was among the world’s richest royals, ranking seventh according to a 2009 Forbes report (Serafin 2009). Despite attempts to liberalize the economy and the financial system from the early 1990s, the state remained involved in many industrial and economic activities. Moreover, due to a high degree of centralization and relatively weak regulation, foreign direct investments have flourished in the country. International and local investors have been allowed to acquire ownership in most sectors (foreigners could not invest in mobile telecommunications, while they were allowed to invest but not to own land in the agricultural sector). Despite reforms of regulatory structures and bureaucratic procedures, public-sector administration has generally been characterized by a high degree of centralization and non-transparent procedures, leading to poor accountability and significant opportunities for mismanagement of resources and corrupt practices to take place. Nevertheless, the indicators showed high business freedom with an average score of 70. According to the V-Dem index of state ownership of the economy, Morocco has a value of 2.94 for most of the years under study, indicating that valuable shares were directly controlled by the state while the rest were free from direct state control. In that respect, Morocco has performed better than its North African neighbors with less state ownership of the economy. During interview A18 with a former high-level official, it was mentioned that: “the state-owned businesses for many goods and services resulted in less competition”, which contradicts the data. The main explanation is that there was indirect control by the king and his clans over economic activities, which does not show on the indices, and the elite enjoyed many privileges in the economy, especially in light of the poor quality of regulation. The low quality of regulation in Morocco has intensified the spread of corruption, clearly illustrated in the domination of economic activities by the royal family (Fig. 5).

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Fig. 5 Economic Status in Morocco

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As for trade, Morocco is well integrated into the international trading system. It has free-trade agreements with the US, EU, and other bilateral agreements. The country has also been a member of the WTO since 1995, but it did not perform well on trade freedom, being categorized as ‘repressed’ during most of the years under study. The varying trade freedom scores do not correspond to the corruption levels, which makes it challenging to assume a causal relationship between them. As for Morocco’s natural resource endowments, they are not remarkable, with insignificant production of oil and natural gas. However, it is the top exporter of phosphate, owning over two-thirds (75%) of the world’s reserves (BTI: Morocco 2010). The government enjoyed a monopoly over phosphate mining. There is no direct relationship between natural resource endowments and corruption in the country. However, the government’s monopoly over phosphate mining and production provides scope for grand corruption, especially with the regime tightly controlling many sectors within the economy. Looking at the group of economic variables, it can be said that the small, less diverse economy, when considered alongside the king’s control over many areas in the public and private sector, becomes a weak economy. The lack of economic openness and unclear market regulation provided opportunities for corruption, indicating a negative relationship with corruption. Nevertheless, data for Morocco show otherwise, which makes reaching a conclusion on the causal relationship between the economic variables and corruption difficult. 2.3

Development Status

As a lower-middle-income country, Morocco had a fair human development score ranging between 0.51 and 0.61 throughout the study, with literacy rates reaching 79.4% in 2009. Generally, despite the government spending around 6% of its GDP on education, illiteracy has persisted, and the quality and reach of education remained a challenge. The World Bank data estimate that 2.5 million children do not attend schools, and the percentage is higher among girls, with high drop-out rates. The poor quality of education produced a passive population that were not well informed or even aware of their rights and assumed no role in the country’s decision-making process. Although literacy rates have no direct relationship with corruption in Morocco, the absence of good educational opportunities presented a catalyst for corruption to take place in society.

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Even though the country has subsidized several goods and services for the people through many state-owned businesses, it has not managed to reduce income inequality, which reached a score of 40 in 2007. The minimum wage in Morocco was insufficient to maintain a decent standard of living, and the economic reforms, growth, and liberalization efforts were not sufficient to face the challenges of increasing unemployment and higher inequality6 (Boutayeb 2006; Boukhars 2010; Achy 2011a). The extent of income inequality signals an unfair allocation and misuse of resources, suggesting a positive causal relationship between income inequality and corruption in Morocco. Because of the regime’s control over the major resources and the absence of appropriate welfare policies, grand corruption occurred, preventing much of society from having their economic needs met and depriving them of essential public goods. During interviews A18 and A19, a retired government official and a Moroccan scholar both highlighted that petty corruption was becoming a “social behavior” that people are used to, due to being underpaid and because the legal consequences of such conduct are unclear. Corruption is clearly endemic within society, with a vicious cycle of increasing unemployment, poverty rates, and income and gender inequality. An additional factor was an insufficient minimum wage to guarantee a decent standard of living, giving more opportunities for petty corruption to take place. This intensified with the lack of good services and quality education, notably in rural areas. In a survey by the Global Barometer for Corruption in 2006, 60% of respondents admitted having paid a bribe during the previous year; public administration scored as highly corrupt in this survey (Transparency International 2006). The Moroccan population is 99% Arab-Berber, and Arabic is the official language. Berber dialects are spoken by the 60% of the population who claim to have Berber origins. Their dialect had no official status, and its use was very limited in many levels of society until 2001, when the Royal Institute for Amazigh Culture was established in response to demands for

6 In addition, the government’s progress was negatively affected by the global finan-

cial crisis, which decreased tourism revenues, remittances, and exports. Other factors are related to over-dependence on agriculture as a main sector for the labor force. Poverty remained a serious problem especially in rural areas where the number of poor people was almost double those in urban areas. Youth unemployment also increased, as the economy was unable to meet the challenge of a rapidly increasing labor force.

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recognition of the cultural rights of Berber-speaking people. The Berber language was introduced as a language of instruction in primary schools in 2003 and was later mainstreamed to all education levels. Muslims constitute 99% of the population, with a tiny minority of Christians and Jews. Freedom of religious worship is guaranteed; however, restrictions applied to Christian proselytizing as well as political activities under the label of Islam, as discussed earlier. The government took steps to improve the status of women through reforms in the moudawana (Family Code) during the 2000s, including new rules on the Personal Status Code to improve women’s social rights. New family courts and a family aid fund were established, though these faced several drawbacks in practice, such as laws not being strictly applied and the inability of judges to be pragmatic and rule correctly in accordance with the new regulations, which led to the persistence of gender inequality (BTI: Morocco 2010). Female participation in the labor force averaged 26%, and in the political sphere, women’s participation in parliament reached around 10% in 2010. Despite efforts to enhance the situation of women in the country, gender indicators showed high disparities. It is unclear whether women’s empowerment increases the levels of corruption in the country. However, the deficiencies of the law and of equal opportunities for women implied the prevalence of gender inequality within society. Looking at the development indicators as a group, it is clear that the poor quality of education, high poverty rates, and income inequality do have a causal relationship with the perceived levels of corruption in Morocco. These variables have intensified, on the one hand, the spread of petty corruption among lower-paid civil servants, and on the other hand, the spread of grand corruption among the elites who have abused national resources for their own benefit, leading to substantial social disparities. A Moroccan law scholar (interview A19) mentioned that: “corruption is no more a monopoly to a certain social group or officials; it is present on all levels”. Outcome Morocco is an authoritarian regime in which the king controls all political and economic domains. The spiritual basis of the regime’s legitimacy has prevented the population from questioning the king and his authority. The rule of law, political rights, and freedom of expression are, to a great extent, not permitted, due to the king’s influence over the judiciary,

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restricted political participation and association, and media censorship. The economy has been very small, with little competition and low quality of regulation, exacerbated by the king’s monopoly over phosphate mining and other economic activities. Both grand and petty corruption persisted in the country, where the tight control exercised by the king impeded the accountability of the government, allowing political corruption to take place. The king’s control of the main economic activities in the country provided great scope for grand corruption. Income inequality also implied the spread of corruption, indicating misallocation and abuse of resources. Low-paid civil servants were the trigger for petty corruption to take root in society, reinforced by poor-quality education and lack of awareness among the population. The leading cause of corruption in Morocco is the ‘divine legitimacy’ of the king, which has interfered with respect for the rule of law. The poor quality of regulation and income inequality are further significant causes of corruption.

3 3.1

Egypt

Regime Characteristics

Egypt has been ruled by three presidents since the 1952 revolution which overthrew the monarchy and the colonial influence that accompanied it. Nasser’s rule was seen as a socialist one supporting agrarian reforms and state capitalism. It was, nevertheless, an authoritarian regime characterized by a single-party system giving Nasser excessive powers. Despite the early gains of the socialist economic policies, progress lagged in the 1960s for political reasons. In the 1970s, it was only after extensive pressures to allow political competition and open up the economic sector that President Sadat, Nasser’s successor, permitted a cosmetic multiparty system and adopted policies of economic openness. During his era, the country saw limited political activities, and the economy did not thrive, benefiting only certain strata of society. Sadat’s rule ended with his assassination at the hands of the Muslim Brotherhood (the main political opposition who were facing severe repression). In 1981, Mubarak, then vice-president, succeeded Sadat. Mubarak remained in office for 30 years, under a permanent state of emergency, and followed a similar path to his predecessors, introducing only minor

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reforms in political and economic areas. Unresolved issues dating from the earlier regimes included a growing population, huge economic subsidies, increasing foreign debt, and political and civil restrictions—exercised under the state of emergency to maintain security and keep the monopoly of political power in the hands of the existing government. Although in theory, political liberalization enabling democratic institutions was intended, extensive authoritarian powers were in fact exercised (BTI: Egypt 2003, 2010; Brown and Shahin 2010; Bakr 2012). The 1971 constitution states that Egypt is an Arab republic with a democratic, multiparty system, and outlines the authority, roles, and duties of the different government institutions. Generally, it provides for strong executive authority, with concrete powers for the president and fewer powers for the parliament; the judicial authority is formally independent, and other authorities are not permitted to interfere in its functions. Nevertheless, President Mubarak and his ruling party, the National Democratic Party (NDP), dominated most of the government institutions, preventing separation of powers, and checks and balances were absent from the political system (Brown and Shahin 2010; Bakr 2012; MacQueen 2013). Until 2005, the presidential candidate was nominated by a two-thirds majority in parliament and confirmed in a national referendum. This ensured Mubarak remained in office as the NDP has always enjoyed a majority in the people’s assembly. In 2005, constitutional amendments were introduced and ratified in a public referendum following international pressure and growing domestic demands for political participation and competition. While these reforms appeared to be the most substantive of Mubarak’s presidency, some of them actually prevented political competition7 (BTI: Egypt 2010) and in reality served his hereditary rule, centralizing power in the hands of the NDP that would never be challenged due to the party’s dominant representation in the parliament. However, real political change was seen in the 2005 parliamentary elections, when the ruling NPD lost some of its seats to the outlawed Muslim Brotherhood, whose candidates stood for election as independents, increasing their presence from seventeen seats in 2000 to

7 For example, only parties that have had more than 5% of seats in the parliament for more than five years had the right to nominate a candidate. This was only applicable to the NDP, as none of the opposition parties had achieved this percentage, while independent candidates needed signatures, including some from members of parliament and administrative divisions.

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88 in 2005. As a result, the legal secular parties and minority groups lost ground in parliament. Despite this political openness and diversity, the grip of the NDP continued, owing to the fact that President Mubarak was both the head of state and leader of the party, so parliamentary and local elections mostly went the way of the ruling party (BTI: Egypt 2010). According to Polity IV, Egypt was categorized a ‘closed anarchy’, scoring between −7 and −3 throughout the years from 1952 until 2010. The country moved from −6 to −3 between 2005 and 2010 in line with the slight progress in political competition and participation of political parties. As for the rule of law, the existence and extension of the ‘emergency law’ for 30 years gave no chances for full abidance by law. The state of emergency, first enforced after Sadat’s assassination in 1981, was extended throughout the years of Mubarak’s rule, allowing the government a free hand to act without legal restrictions (BBC News 2010). This is reflected in the data for the rule of law indicators, which show no significant change over the years, with equality before the law maintaining a score of 0.27 and judicial constraints on the executive scoring 0.54 for almost all years. Low abidance by the rule of law implies a negative causal relationship with levels of corruption in Egypt, where judicial independence has been impeded on several occasions by clear executive intervention. This was highlighted during interview A20 with a professor, who mentioned that corruption is manifest, where “the more power and status you possess in the country, the less prone you are to get imprisoned, even if you are guilty”. In many cases, connections and preferential treatment played a role in the legal process. As for the right of assembly and association in Egypt, the uninterrupted state of emergency restricted fundamental political rights and civil liberties, imposing censorship on almost every aspect of life and justifying forceful and at times brutal practices against opposition political parties (mainly the Muslim Brotherhood) and civil society activities that came close to openly criticizing the regime. Even though a margin of freedom of expression existed during Mubarak’s regime, compared to the previous presidents, the general theme of his rule was authoritarian. The regime gave people little scope to express their opinions freely on certain matters, and an increasing number of bloggers and journalists with vocal anti-regime opinions were arrested. The government also controlled a huge proportion of the media outlets (Ismael and Ismael 1991; Brown and Shahin 2010; BTI: Egypt 2010; Fadel 2011; Bakr 2012; MacQueen 2013). The country is classified as ‘not free’ in political rights according

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to Freedom House, scoring 6 for all the years under study, and scoring low on freedom of the press with an average score of 45. The lack of political rights in the regime intensified the presence of corruption, indicating a negative relationship between the two variables. The several constraints exercised by the regime over journalists and bloggers provided the opportunity for political corruption to spread, since the population was never allowed to criticize the regime or hold it accountable (Fig. 6). The political background in Egypt generally gave the regime an authoritarian stamp, no matter how many political reforms were introduced. It gave the executive authority and the NDP extraordinary powers and safeguarded their monopoly of power. The political variables as a group show a clear negative relationship with the perceived levels of corruption in the country. The persistence of emergency laws allowed the government a free hand to interfere in domestic and civic affairs under the under the guise of taking action for security reasons. 3.2

Economic Status

In the late 1970s, the Egyptian government began the privatization process, but significant state-owned enterprises remained untouched. Privatization continued on the agenda of Mubarak (following Sadat’s policy of economic openness), and its scope extended in 2004 to major sectors like telecommunications. Several measures were introduced aiming at restructuring specific financial institutions and simplifying business related to property rights and registration of property. In 2005, an anti-monopoly law established for the first time a legal framework for economic competition. However, deficiencies persisted, and significant sectors remained under state control, such as water, public transportation, and energy (including oil). It is worth noting that the increasing economic competition created a class of extremely rich businessmen well connected to high-level officials, some having held influential positions in the government. Law enforcement also relied heavily on the influence of the business elite and whether or not they had power in the government or could access those in power. During the 2000s, there was preferential treatment for business elites, and the links between businessmen and government officials provided more opportunities for grand corruption, easing the growth of investments and benefiting certain individuals. There was also wide government interference in the economy, despite efforts to enable a competitive market atmosphere. The privatization processes

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Fig. 6 Regime Characteristics in Egypt

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marked the high tide of corruption, which affected the popularity of the state’s sales of its companies (Global Integrity 2010). This is reflected in the business freedom indicator: during the years after the introduction of reforms in 2004, no significant progress was witnessed, and the country’s performance deteriorated for 2006 and 2007, due to the lack of a structured market with well-defined regulation. State ownership of the economy maintained a score of 2.08 for most years, indicating direct state capture of the main economic activities. Regulatory reforms and privatization policies have not been translated into encompassing economic growth as originally planned. Expert interview A22 highlighted that all the economic reforms have intensified grand corruption, which was widely acknowledged by the population, as businessmen who were often part of the government worked on establishing or even bypassing laws and regulations to increase their private investments. In a 2009 study, 42% of SME owners in Egypt indicated that they had to pay bribes in cash or in kind to obtain their business license, and 29% had to offer illegal payments or gifts during the operation of their business (CIPE 2009). Low wages were the top cause of corruption in Egypt according to the survey respondents (CIPE 2009). A transparent system for monitoring and evaluating public officials was also lacking, and nepotism was prevalent (salaries and positions in many instances were not based on competency and expertise, but on personal networks). There were also no effective means of fighting petty corruption in the country. Low public-sector wages combined with the absence of a transparent monitoring system and means to fight petty corruption all provided the opportunity for petty corruption to intensify among civil servants in the lower levels of bureaucracy (Fig. 7). Egypt has signed several trade agreements with other countries in an attempt to establish economic cooperation and integration. The country joined the WTO in 1995, and is also a member of the International Monetary Fund (IMF), the Common Market for Eastern and Southern Africa (COMESA), the African Union, the Greater Arab Free Trade Area (GAFTA), and the Nile Basin Initiative (NBI). This gives the impression that Egypt has sought to remove trade barriers and open its market to international trade and investments, but the indicators show limitations on trade. The country’s scores remained relatively similar throughout the 2000s, with better performances in 2007, 2008, and 2009 in the light of

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Fig. 7 Economic Status in Egypt

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economic growth, flexible exchange rates, expanding exports, and attraction of foreign investments. There is thus no clear causal relationship between economic openness and corruption in Egypt, as the data do not correspond with each other. However, the lack of openness in trade and the existence of economic barriers can be catalysts for corruption. Natural resource rents were higher during 2005–2008, when the government’s regulatory policies were functioning poorly. Due to lack of transparency, plus the monopoly and hegemony of the government over the key economic activities, it is not possible to assess the impact of rents on corruption levels in the country. Regarding the country’s economic status, quality of regulation, economic openness, and freedom of trade have not been progressing well. The three variables benefited the elite who enjoyed the fruits of economic growth and managed to establish huge investments, while the general population was deprived of those benefits and enjoyed fewer welfare facilities. Therefore, a negative relationship exists between, on one side, the quality of regulation, economic openness, and trade freedom, and on the other side, corruption. The spread of grand corruption is apparent within the corridors of government and economic institutions, where the rise of a tiny class of businessmen and political elites has been dominating the scene. At the same time petty corruption had deep roots, as there were no definite regulations or mechanisms to monitor civil servants in the lower levels of the bureaucracy and curb misconduct. 3.3

Development Status

Egypt was classified as a ‘low-to-middle income’ country during most of the years under study, as the state witnessed no significant growth and development. It was also classified a ‘medium human development’ country between 1990 and 2010. Egypt is the most populated country in the MENA region, with 80 million inhabitants in 2011. Even though some economic growth was achieved later in 2007 (7.1% compared to 4.1% in 2004, according to World Bank data), development in general remained minor, as growth did not translate into increased incomes for all stratas of the population, resulting in increasing disparity. The population is composed of 90% Sunni Muslim and 9% Coptic Christian, with ethnic and racial groups mainly located in Upper Egypt and Sinai, and tribes in Western Egypt (Egypt, US CIA). These groups feel isolated and neglected, and share grievances and a sense of inferiority.

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The poverty rate was higher in Upper Egypt than in the rest of the population; periphery areas did not receive due attention from policymakers and were deprived of the fruits of development, suggesting unfair distribution of resources. During interview A21 with a former government official, it was mentioned that wealth has been concentrated in the hands of around 5% of the population, who were more focused on their personal gain than on serving the population and meeting their needs. Throughout the years 1999–2010, income inequality reached 30, and poverty rates reached 20%. Social justice and income redistribution remained major challenges in society. A related point concerns the large and inefficient bureaucracy. With no minimum wage, civil servants’ incomes have been too low to meet their needs, making them vulnerable to accepting other sources of income. This gave opportunities for petty corruption to become widespread among a significant proportion of society at the middle and lower levels of bureaucracies, enabling bribe taking and giving under the guise of a ‘facilitation fee’ to get things done for clients. Income inequality can therefore be said to have increased corruption in Egypt, and the same goes for poverty, causing petty corruption to spread across different levels and become a socially acceptable behavior. Illiteracy has dropped significantly due to huge awareness campaigns on the importance of education, and the literacy rate reached around 85%, although the quality of education was defective and frequently did not enable people to access decent jobs in the market. According to the Global Competitive Report of 2013–2014, Egypt ranked lowest for education quality. At around 4% of GDP, expenditure on education and research in Egypt was insignificant (Egypt, US CIA). Illiteracy was higher among women, especially in rural areas, reflecting a dimension of discrimination against women (Schwab 2013). Although literacy rates do not correspond to the intensity of corruption in the country, the lack of proper education opportunities, the poor quality of education, and the resulting low levels of awareness among the population made petty corruption a commonly accepted and widespread practice in the country. Women were politically marginalized, and their calls for more political inclusion have been widely ignored. Social need gave them a presence in the labor force, especially in the informal sector. They barely participated in politics during the years of study, with a 2% presence in the parliament. This was also the case for the Coptic minority, who had minimal roles in the government and consequently felt discriminated against. As women’s

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empowerment data do not correspond to the changes in corruption levels, there is no direct relationship between the two variables. However, the lack of women’s empowerment and discrimination against some groups in society indicate that inequality can indirectly increase corruption in the country. Outcome Generally, the three successive presidents enjoyed centralized political powers with restricted political participation, but there was more economic openness under Presidents Sadat and Mubarak. Inherited corrupt practices in Egypt have deep roots, and the reforms introduced were cosmetic. The state of emergency maintained by Mubarak throughout his 30-year rule allowed his government to act freely, obstructing the people’s basic political and civil rights and preventing any real political change. With the centralization of political power in the hands of the president and the ruling elite, and the hegemony of the NDP, there was scope for political corruption. The country’s plentiful human and natural resources were not exploited efficiently to realize the desired growth and development. Economic restrictions remained obvious, and privileges were mainly granted to the elite and the tiny circle around it. The vagueness of economic regulation assisted in the spread of corruption, along with the lack of economic openness and competition in the market. The tiny privileged class enjoyed all the economic gains and benefits, while the rest of the population were generally deprived. Poverty and the modest quality of education explain why Egypt lagged behind in the Human Development Index, scoring 0.6 from 1990 until 2010. This generally implies that the lower levels of human development in Egypt may have been a cause of corruption. Petty corruption has persisted in Egypt due to a set of interrelated reasons. There is a culture of acceptance of corruption among all levels of society, exacerbated by poor educational output, which is reflected in the lack of social awareness of civil matters including the illegality of corrupt activities. Low pay encouraged civil servants to supplement their insufficient income with illegal payments and corrupt behaviors. People generally, whether clients or agents, did not feel they were doing wrong, as they felt deprived of their rights in society. The growing disparity between the rich and poor, and the decline of the middle class, increased

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inequality in every respect. One reason for this was the regime’s strong grip on and unfair distribution of the country’s resources. The most significant cause of corruption in Egypt is the scant respect for the rule of law due to the continuing state of emergency. The vagueness of regulation and income inequality added to the levels of corruption in the country.

4 4.1

Algeria

Regime Characteristics

In 1962, Algeria gained its independence after a bloody eight-year war of liberation from French colonization. Since then, the country has gone through several alterations in its political scene. The Front de Libération Nationale (FNL) party, established in 1954, developed as the main driving force for liberation, and was composed originally of a mixture of different segments in Algeria—secular, Islamists, socialists, and nationalists—who came together to oppose French rule. When the country gained its independence, the new republic was established under the FNL’s authority, which was sustained for almost three decades with the support of the military, both having enjoyed significant domination over the country (Malley 1996; Boserup 2013). The first president after independence was Ben Bella, who set up a constitutional republic with a multiparty system in 1963. In reality, however, he monopolized power through single-party rule. Gaps in the structures of the system have led to a number of political transformations over the years (BTI: Algeria 2010; Driessen 2012; Kilavuz 2015). In 1999, Bouteflika stood in the presidential election, supported by the military. He managed to stay in power uninterrupted through consecutive presidential elections.8 Despite the gradual opening up of the electoral process since 1999, the FLN maintained hegemony over the system,

8 During the 1999 elections, all other presidential candidates withdrew, claiming systematic vote rigging and fraud by the government favored the FNL candidate Bouteflika. In 2004, competitive elections took place, with even the military suggesting it would support an Islamist candidate as long as they abided by the constitution. The election was widely seen as free and fair, but Bouteflika still won with 83% of the votes. In 2009, the parliament voted to amend the constitution, allowing Bouteflika to run for a third term as president, and during that year’s elections he won with over 90% of the votes. Again, many opposition groups boycotted the elections.

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supported by the military, while opposition parties were not able to achieve any significant role in politics (Polity IV: Algeria 2010; BTI: Algeria 2010). According to the 1963 constitution, the president is the head of the council of ministers and chief of the armed forces, and appoints the prime minister and the president of the upper house. He also appoints and dismisses senior administrative figures. He can legislate through a presidential decree, declare presidential amnesties, and intervene in the judicial process (Algeria Constitution 1963). The wide privileges granted to the president by the constitution limit the other authorities’ performance and impede accountability in the administration, besides undermining the credibility of the parliament. The legislative branch is bicameral, consisting of the National Assembly (Assemblée Populaire Nationale) and the Senate (Conseil de la Nation). There was a clear lack of competition in the 2002 parliamentary elections, and violence erupted. The whole process was flawed, with parties boycotting the elections, and fewer voters turning out. Further boycotts at the 2007 elections resulted in a turnout of only 35% of eligible voters. In both rounds of elections, the Islamic party (FIS) was banned, and there was limited support for the regime. The FNL, which had been strongly organized for more than three decades, became institutionalized, exercising control over both executive and legislative branches. The judiciary is recognized as an independent authority according to the Algerian constitution. However, it has been subject to the executive authority. Appointments and promotions of judges were made by the executive (Hadjadj 2007; Kilavuz 2015). According to the World Economic Forum and Human Rights Watch, the Algerian judiciary is not autonomous, as it has always been subject to political influence. The WEF’s Global Competitiveness Report of 2012–2013 ranked Algeria 126th out of 139 countries on the independence of the judicial authority, scoring below its North African neighbors (World Economic Forum 2012). Another dimension is the role of the armed forces in the political system, a stumbling block towards realizing liberal democracy in the country. The military has enjoyed hegemony over the government since independence, its influence continuing under Bouteflika after 1999, though he managed to enhance the president’s role in decision and policy making, expanding his authority and limiting the influence of the army’s high command. The process of democratic governance remained

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a challenge, due to the excessive power concentrated in the hands of the president as well as the role of the security forces in domestic politics. There was no real constraint over the power of the executive in Algeria, and the legislative and judicial branches were systematically subordinated to the executive branch. The country witnessed long years of political instability due to civil wars and coups, which resulted in declaration of a state of emergency in 1992, accompanied by significant military controls (Achy 2013; Boserup 2013). On the Polity IV index, Algeria is categorized as an ‘open anocracy’, scoring −3 until 2004, but when presidential elections took place, it scored 2. The rule of law has low scores on the VDem indices; equality before the law scored 0.50 and judicial constraints on the executive 0.20 for most of the years. Reduced respect for the rule of law allowed corrupt practices, with no proper system of checks and balances due to the domination of the president and his party over the political system, as well as the strong military role in the government. During expert interview A23, the Algerian scholar stated that it is impossible to deter corruption in the country, since ‘the ones who are supposed to stand against it are the most corrupt’, meaning the president and high-level officials. As for freedom of assembly and association, the prevailing one-party rule in Algeria with strong military support prevented any active role for opposition parties and civil society. Even with the constitutional reforms of 1989 which allowed opposition parties to run for election, only a few parties demonstrated any real opposition to the government. The state of emergency declared in 1992 allowed the government to restrict any demonstrations they believed might disturb public order, resulting in significant human rights abuses. The activities of civil society have been neither vibrant nor effective in Algeria since independence, reflecting its relative ineffectiveness to put forward demands or oppose the regime. Labor unions were more influential, especially during the 1980s under Bendjedid’s regime; strikes and protests increased until 1988 when widespread protests took place, leading to some important constitutional reforms. However, this civil activity did not last long, especially after the 1992 coup d’état. Since then, there have been tight restrictions on civil liberties and limited influence for opposition parties (Hadjadj 2007; Kilavuz 2015). Political rights scored 6 throughout the years of study, ranking Algeria as ‘not free’. This suggests corrupt conduct among the

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political elite, with the influence of the security forces delaying democratic governance, and limiting the capacities of the political parties and civil society, especially during the 1990s (Fig. 8). As for freedom of expression, the Algerian media has developed generally but faced constraints. Media started to be liberalized after constitutional reforms between 1989 and 1991 introduced private ownership of printed media; however, audio and visual media remained monopolized by the state. The 1992 coup had severe consequences for journalists, with military restrictions and partial state censorship exercised on topics related to ‘state security’. During the 1990s, many journalists were assassinated in a series of targeted bombings of media institutions. The internet developed slowly when the government opened up investment at the end of the 1990s, and internet providers faced a number of obligations, resulting in slower development of online critical media networks than in the other North African countries (Boserup 2013; Kilavuz 2015). Reporters Without Borders defined Algeria as a ‘difficult situation’, even though it ranked better than Egypt and Tunisia for many years on the Press Freedom Index. It is clear that huge restrictions were imposed on freedom of expression, especially during the critical years of transformation, which may have been a catalyst for deepening political corruption. The regime in Algeria demonstrates explicit executive control supported by one-party rule and strong military intervention in state affairs. Most of the time this limited abidance by the law, which was often ignored due to the 1992 emergency laws. Political rights and freedom of expression were also restricted over the years, with the Islamic opposition group banned and media outlets subjected to targeted bombings. Grouping the political variables—the rule of law, political participation, and freedom of the press—indicates a negative relationship between them and corruption levels, implying the existence of widespread political corruption within the country. 4.2

Economic Status

In 1971, Algeria emerged as an oil-exporting country after the nationalization of hydrocarbons, affirming its intention to make use of its oil revenues to support economic development strategies. The country is one of the biggest exporters of oil and gas in Africa and worldwide; hydrocarbons make up more than one-third of the country’s GDP and two-thirds of government revenues. For more than four decades, there has been no

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Fig. 8 Regime Characteristics in Algeria

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significant alteration in economic policies to reduce the country’s dependency on hydrocarbons and to diversify the economy, even though high volatility of oil prices and resource curse impacts have been felt (Chekouri and Aderrahi 2016). The government maintained control over the country’s oil and gas sector through its public companies, since significant industries have been nationalized9 (Entelis 1999; Auty 2003; Darbouche 2011; Teulon and Fernandez 2014). Although the natural resource rents increased through the years, these changes do not correspond to corruption levels in Algeria, indicating no direct causal relationship between natural resource endowments and corruption. A wide range of explanations has been proposed for the weak economic institutions and poor governance caused by the effect of natural resource endowments on the Algerian economy—including Dutch Disease (Corden 1984), a ‘rentier’ state (Beblawi 1987), a patrimonial state (Lowi 2004), and natural resources revenue volatility. In the 1989 constitutional reforms, the reference to ‘socialism’ was removed, and the role of private entrepreneurship in complementing the public sector was acknowledged. In 1994, the IMF introduced a structural adjustment plan to enable Algeria to adopt a free market economy and liberalize trade (Teulon and Fernandez 2014). The planned opening up of markets was not entirely achieved, especially following the 1992 coup, the terrorist attacks, and the fall in the oil price. In this sense, the government failed to introduce a more integrated economy; the state’s tight control over the economy and lack of good governance along with substantial structural dependence on hydrocarbons stood in the way of economic reforms and diversification (Entelis 1999; Auty 2003; Darbouche 2011; Teulon and Fernandez 2014). The V-Dem indicator of state ownership of the economy clearly reflects this, as Algeria scored 0.67 until 2003 then moved towards less state ownership, scoring 1.50 until 2010. Subsidies and investments in infrastructure increased between 2001 and 2014. These efforts maintained good economic growth, and in parallel, unemployment fell. Nevertheless, this did not promote privatesector growth, and Algeria was regarded as among the least diversified economies in the Arab world. The country scored better on business

9 SONATRACH is a state-owned oil company, while SONELGAZ is a state-owned electricity and gas company. Both companies are responsible for the entire process of production and sales of oil, gas, and electricity.

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freedom, averaging 70, which is not in line with the economic environment in the country. According to a 2003 survey conducted by the World Bank, corruption was a significant obstacle in the Algerian economy; 75% of the companies surveyed having admitted to paying a bribe (HallwardDriemeier and Stewart 2004). Reports by the OECD and the African Development Bank mention corruption as a deep-rooted problem in Algeria (OECD and African Development Bank 2005). In light of the controversy between data and analysis, it is challenging to assume a direct causal relationship between the quality of regulation and the intensity of corruption in Algeria (Fig. 9). As for trade, the country has been in the accession process to the WTO until recently. Algeria scored low on the trade freedom index from 1999 until 2005 but opened up later, when increased emphasis on natural resources investments impeded many opportunities for trade, especially with its neighboring Maghreb states (Chauffour 2011). Algeria’s delayed integration into the international trade system can be said to represent a cause of corruption; the country’s inability to become a member of the WTO suggests it is not ready to give up trade barriers. Algeria has relied heavily on its natural resource wealth, having a less diversified economy with limited economic openness. Those variables grouped together indicate the presence of grand corruption in the economic activities of the country, due to the political regime’s control over the major businesses in the economy and the government’s domination of the oil and gas industry. 4.3

Development Status

Algeria is an upper-middle-income country, with human development scoring between 0.63 and 0.72 for the years under study. This status is mainly due to its richness in oil resources. Literacy rates were high, reaching 93.7% in 2008, but the quality of education has not been remarkable. In this respect, there is no direct causal relationship between literacy rates and corruption levels in Algeria. Data on poverty is missing, while income inequality reached 35, according to the latest available data in 1999. Despite the limited information, a picture emerges of the dynamics of poverty in the country. Laabes (2001) argued that poverty has been deeply rooted in Algeria since colonial times, averaging 54% in 1966 and dramatically declining to 28% in

Fig. 9 Economic Status in Algeria

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1980, when oil revenues began to contribute to improving living standards. Benhabib et al. (2007) contended that poverty rates are high in Algeria at around 25% on average. This means that income inequality and poverty have a positive relationship with corruption, intensifying the disparity between social classes. The Algerian population is a mixture of Berbers and Arabs (like Morocco), with Berbers constituting 20% of the population. Berbers have long aimed for cultural and official recognition of their language (Tamazight). In 1998 the government passed a law mandating the exclusive use of Arabic in public life, leading to a conflict between Berbers and the government. They have increasingly sided with the opposition to the regime, and 2001 witnessed political unrest and various riots in the Kabylie region, to which the government responded with killings and repression. A few years later, the government approved Tamazight as a national (though not official) language, increasing economic support to the region to diffuse the unrest (Djerbal and Hamou 1992). Women in Algeria have remained largely unskilled, with smaller percentages of graduates and membership of high-level professions. Many debates have taken place over the Family Code, which placed women under the authority of men, affecting many dimensions of their lives, even though evolving social practices have moved towards greater participation and recognition of women’s rights and roles in society. Since the Family Code delegates authority over women’s place in public life to men, the government has effectively legalized gender inequality in society (Djerbal and Hamou 1992). Women’s share in the labor force averaged 15% for the period under study, while in parliament it reached 7.7% in 2010. Together with discrimination against certain groups in society, gender inequality implies a lack of equal civil rights. As regards Algeria’s development status, there is a positive relationship between income inequality and poverty rates on one side, and corruption on the other. The government has allocated national resources unfairly, and social inequality has been obvious. During expert interview A24, it was highlighted that corruption became widespread in society during the financial crisis of the late 2000s. The general public were involved in corrupt practices, seeking easy profits after socio-economic conditions deteriorated in 2008. Nevertheless, corruption has not become a commonly accepted behavior within society.

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Outcome Since its independence Algeria has sought to achieve legitimacy and economic growth with its model of development. The government was not able to manage its political powers efficiently after independence, as power has remained in the hands of the military, whose legitimacy is linked to the armed struggle for liberation. On coming to power in 1999, Bouteflika witnessed a lack of popular confidence in the government and the political elite, which was reflected in declining electoral participation, and continuing unrest and public discontent. Algeria has maintained military hegemony and a one-party system, while undermining civil rights and freedoms, which has shaken the regime’s legitimacy and led to huge fragmentation in Algerian society. There were constant struggles between the military and civilians, rivalries between secularists and Islamists, Algerian nationalists, and Berbers, with each group distrusting the other. The elite’s management of the country’s resources has also been called into question, with many concerns expressed about the revenues from hydrocarbon (Lowi 2004). Corruption and patronage are deeply rooted in the system. The regime had total control of the country’s natural resources and economic activities, economic openness was limited, and trade barriers were in place (Achy 2013). During expert interview A23, it was emphasized that the regime has lost any chance of credibility among the people due to grand corruption, and that petty corruption is not as deeply rooted in society as grand corruption. The government made no attempt to curb corruption because it was the elites who were in charge of all the corruption that took place and that led to such high inequality in the population. The above analysis shows that a significant cause of corruption in Algeria is the permanent state of emergency and the unstable political environment which has entrenched the robust control of the president, the ruling party, and the military over the country and all its political and economic activities. Therefore, the scant respect for the rule of law and increasing income inequality among the population can be said to represent the main causes of corruption in Algeria.

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Libya

Regime Characteristics

For almost four decades, Libya maintained a military dictatorship under Colonel Mu’ammar Al Qadhafi, who dominated the political scene and determined the direction of the government from 1969 until 201110 (Martínez 2007; Oliveri 2011). He was proclaimed the leader of the revolution that overthrew the monarchy of King Idris in 1969. Soon afterward, Qadhafi initiated a series of political and administrative steps— including the 1969 Constitutional Proclamation, the 1975 Green Book, the 1977 Proclamation of the State of the Masses (Al Jamahiriya)— to overcome the weaknesses of the previous monarchy and establish a system based on the so-called authority of the people through popular congresses. These steps were intended to set out the basis for direct democracy with Islamic roots through a vertically organized system of local, regional, and national congresses (Pargeter 2012). Qadhafi initiated his own ideological brand of Arab nationalism combined with socialism. His personal interpretation of the political system was outlined in the Green Book, based on a speech he delivered in 1975. It has served as the ideological basis, manifesto, and ‘unofficial constitution’ of the political system ever since (Qaddafi 1976). He stated that: “the mere existence of a parliament means the absence of the people, but true democracy exists only through the participation of the people, not through the activity of representatives” (Qaddafi 1976: 9). This meant for him in practice that participation in decision making is to be achieved through the people’s congresses, which are under the control of the Revolutionary Committees. The Green Book ensured that the congresses were the only means of accomplishing popular democracy. Thus Al Jamahiriya (the republic) was established on the principles of political decentralization, allowing all decision making to be processed to the citizens through direct democracy.

10 Libya’s political system since the 1969 revolution has shown significant stability even though it underwent critical transformations and international conflicts that prevented any chance of political reform. These include: the 1990s UN sanctions in response to the Lockerbie bombing of 1992, war with Chad, conflict with the US, and other tensions with foreign nations. Also, during the early 1990s there was rising Islamist violence towards the secularly oriented government. Thus, the state was too involved in repressing militant Islamist groups as well as seeking to have the UN sanctions lifted.

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Later in 2000, Qadhafi spelled out his vision for transferring power to government bodies in what he called the General People’s Congress. This divided Libya into 26 governorates (Sha’biyah) and decentralized power to more than 300 popular congresses, eliminating many of the central government’s functions (St. John 2011). According to Libyan law, the country is among the most politically decentralized systems in the region. However, on the ground, it is the revolutionary leadership who decided the powers of the institutions. Distribution of oil revenues was highly central, interfering with the notion of decentralization. The reality was quite different from the ideological rhetoric of popular participation and direct democracy. Qadhafi exercised tight control over political power; far from being an egalitarian system that served the population and gave voice to their wishes, the congress system consolidated power for Qadhafi’s regime since individuals were appointed based on their loyalty to him. The constitution guaranteed citizens’ rule, but the regime dominated almost the whole of the country’s political, economic, and social life (Davis 1987). There was no separation of powers, because the revolutionary leader could intervene in the functions of all three branches. For instance, the judicial authority did not work independently when political issues arose, as it was subject to interference from the ‘revolutionary leadership’. Numerous instances of imprisonment without trial, torture, exile, and execution demonstrated the shortcomings of the system. Other issues like common criminal proceedings and personal statutes were too distant to be subject to political influence (Pargeter 2012). Political life, therefore, revolved entirely around Qadhafi’s leadership throughout his rule. Tribal ties and family circles are a cornerstone of Libyan institutions and decision-making processes, and the interests of the country’s big tribes and close groups were always considered in political and economic decisions.11 Qadhafi’s sons were also involved in running the country; three of them (Sair Al Islam, Mu’tasem, and Khamis) were active members of the government (BTI: Libya 2010). The country scored −7 and was categorized as ‘failed’ between 1959 and 2010, according to Polity IV. There was no separation of powers, nor were there checks on the authority of the president, which is also 11 During expert interview A25, it was stated that as Qadhafi came from a small tribe, he always relied on consolidating links with other large tribes to support his power. Compromises thus occurred, and tribes even had shares in the resources of the rentseeking state.

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apparent from the V-Dem scores on the rule of law, in which the country scored the lowest among its North African neighbors. Libya’s score on equality before the law was 0.17, and on judicial constraints on the executive powers it remained at 0.08 for most of the years. Lack of respect for the law negatively affected corruption levels in Libya, implying that the system consolidated Qadhafi’s powers, and even though the constitution guaranteed the citizens’ right to rule, in reality Qadhafi had unlimited authority as the ‘revolutionary leader’, who did not respect or abide by the law. Regarding political rights during Qadhafi’s regime, Libya imposed restrictions on freedom of association and assembly. In 1972, the Prohibition of Party Politics Act banned political parties in Libya, and the only legal organization was Qadhafi’s Arab Social Union party. The only channels for political participation were professional associations that were incorporated into the state apparatus, which could not be considered unions since they were not allowed to voice their demands freely or independently. According to the Association Act of 1972, NGOs could be established as long as they abided by the revolution’s goals. Independent organizations and civil society associations were banned (Davis 1987; BTI: Libya 2010). The few NGOs that did exist had a less visible impact in society as the concept of social support organizations was fulfilled by the tribal system. Although various penal laws were enacted, no progress was made on any level. The government continued to imprison people without trial in a massive abuse of human rights. The vague wording of laws on civil liberty and freedoms allowed the government to act more freely (Davis 1987). This is reflected in the political rights index, where the country was categorized ‘not free’ and scored 7 for all the years under study. The lack of political rights intensified corruption, since civil society and non-state actors continued to be repressed, political parties were banned, and the regime cracked down on the Islamic opposition in severe abuses of political and human rights (Fig. 10). Regarding freedom of expression, the government had a monopoly over media outlets, both broadcast and printed. It was not until the mid2000s that Sair Al Islam, who was seen as the ‘reformist son’, became intensely involved in the political scene, opening up the economy to foreign investments and establishing a media firm that aimed at freedom of expression—although he faced enormous conservative opposition from the government. Other steps were initiated by Libyan activists who succeeded in launching an appeal for press freedom and established

Fig. 10 Regime Characteristics in Libya

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two independent daily newspapers and another media channel owned by Sair’s media firm. Despite this progress, the Libyan opposition faced police questioning, imprisonment, and exile (Reporters Without Borders 2009; Freedom House 2009). The country scored very low on the Press Freedom Index, reflected in the persistence of corruption as people were not allowed to speak openly and express their opinions. The high level of restrictions imposed by the regime on press freedom suggests a direct causal relationship with the intensity of political corruption in Libya. The Libyan regime under the leadership of Qhadafi followed a unique system of government based on the Green Book. He consolidated his power, restricting freedom of expression, limiting public input and facing no political competition or opposition. Under a president and a government that were not accountable to the people in any way, the political variables increased political corruption in Libya. 5.2

Economic Status

Qadhafi maintained state socialism for almost 20 years, with the state monopolizing all sectors of the economy. The leader eliminated the formal private sector, and banks were state owned. After more than two decades of a centralized economy, the government began to liberalize economic activity, and there was some opening up during the last few years of Qadhafi’s regime. Libya’s economy relied mainly on natural resources, with oil and gas constituting about 80% of GDP and almost 99% of government revenues, according to World Bank data. Natural resource rents reached an average of 50% for the years under study. The variation in rents does not correspond to corruption levels in Libya—which did not vary much over the years—but implies that natural resource endowments can be a cause of corruption, especially in view of the highly secretive operations and management of the industry by the government. Several state-owned enterprises were privatized, and foreign investment was permitted in line with the lifting of UN sanctions on Libya in 2003, breathing some fresh air into the economy. During 2007 and 2009, the Libyan Investment Authority began deploying huge amounts of capital on the international market to promote investment. There were various different interpretations of the privatization initiative; some were suspicious of the main intentions behind opening up the market for private businesses to operate, while others claimed that it was merely ‘renting’,

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not selling government corporations (Pargeter 2012). However, what is agreed upon during this phase of opening up the markets is that the standards, regulations, bureaucratic structures, and legal frameworks for the whole process were neither satisfactory nor reliable. Tariffs and taxes were vague, and discriminatory practices took place. This negated progress as the inefficient guidelines and weak administration resulted in a lack of competence and accountability. In 2009, the Heritage Foundation Index of Economic Freedom categorized Libya as ‘repressed’ and it was ranked among the lowest ten countries in the Foundation’s index. The country scored worse (20) after the economy began opening up, and though efforts were made to break up Qadhafi’s centralized economy, many vital industries, such as crude oil production, aviation, and energy production remained in state hands. This is also clear from the V-Dem state ownership of the economy indicator, where Libya scored 0.71 throughout the years under study, implying full state control over economic activities. As regards economic competition, therefore, the centralized Libyan economy endorsed less integration of the private sector. The lack of openness or proper regulation within the economic institutions were a cause of the high levels of corruption perceived in the country (Fig. 11). After the government ceased all activities related to the acquisition of weapons of mass destruction in 2003, a declaration of integration with the Union for the Mediterranean, along with other measures to end Libya’s isolation, offered positive economic gains. Libya became involved in regional cooperation frameworks to enhance trade, such as the Greater Arab Free Trade Area (GAFTA), the Arab Maghreb Union (AMU), and the Common Market for Eastern and Southern Africa (COMESA). After years of isolation and sanctions, the country began to establish relations with the US and the West during the second half of the 2000s, which encouraged foreign investment in the country in sectors like banking and infrastructure. It was therefore only towards the end of Qadhafi’s regime in 2009 and 2010 that trade freedom began to score better. Even after the isolation phase, however, the sanctions limited Libya’s ability to establish trade relations with foreign countries or to become an active member of international organizations (BTI: Libya 2010). This explains why Libya has not joined the WTO, and only holds observer status. Based on the above, it can be said that a negative relationship exists between economic openness and corruption, with Libya transitioning towards a free market only to the degree that was tolerated by Qadhafi. The whole system remained highly centralized and dominated by the regime, and even the

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Fig. 11 Economic Status in Libya

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financial system was run by the central bank and other governmental financial institutions. Looking at the economic variables, corruption has been widespread due to the significant role of the government in running and owning the economy, its monopoly of the main economic activities, secrecy over the oil and gas industry, and inefficient administration. Moreover, the sanctions imposed on the country reinforced its limited integration into the international trading community, preventing many opportunities for progress and openness. The three variables as a group indicate a direct causal relationship with the high levels of corruption in Libya. 5.3

Development Status

As an upper-middle-income country, Libya scored 0.72 on the Human Development Index, performing very well compared to its North African neighbors. Income levels are high, but the reality is very different. Libyan society generally relied on two forms of social security: tribal and family ties that provided a sense of social status and benefits, and the subsidized welfare offered by the government. Under Qadhafi’s rule, almost all necessary goods and services were subsidized. As for education, though more than 99% of the population are educated, the quality of education in Libya lags behind that of its neighbors. There is no clear causal relationship between literacy rates and corruption levels, but the poor quality of education produced a population who are unable to acknowledge their basic civil and political rights. In return, this gave the regime a free hand to manage the country without being accountable to the public, deepening corrupt practices among those in high-level positions. Data on poverty rates and income inequality were missing due to the government’s restrictions on international organizations working on these topics.12 This is in line with the political restrictions and prohibitions mentioned earlier. Inequality between northern and southern regions was more in evidence, as most of the population is centered around Tripoli, with people in the south deprived of the fruits of development. There has also been severe discrimination against Berbers, Toubous, and foreign African workers who do not belong to the tribal system, which rules along

12 This was asserted during the expert interviews.

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with the revolutionary leadership. Further inequalities among the population are based on tribal associations with the revolutionary leadership. The Berber minority (20% of the population) and non-Arab Toubou tribes have often expressed dissatisfaction regarding the dominance of Arabic and discrimination against their own language. In 2007, Berbers were granted the right to hold a congress in Tripoli. Foreign African workers did not enjoy any benefits. The state was not interested in granting labor rights to foreign workers who therefore could not even voice their demands or express their needs (BTI: Libya 2010). During interview A25 with a professor at Tripoli University, he mentioned that corruption was widespread during the whole Qadhafi era. Unemployment was high because of the absence of the private sector in the economy. He also pointed out that jobs were not available for those without connections to significant tribes and those in positions of power. As for the empowerment of women, although Qadhafi himself was an advocate of women’s involvement in society, social traditions prevented a significant role for women in politics, and their representation in parliament reached only 7%. General inequality among the population provided the opportunity for corruption at different levels in society, emphasized in interviews A25 and A26. Tribes were given preferential treatment based on their loyalty to Qadhafi himself, and the distribution of resources and benefits in society was a matter of nepotism and favoritism. As a group, the development variables show that the poor quality of education, coupled with social inequality, encouraged both grand and petty corruption. Outcome Even though the government was established as a direct democracy and the constitution invested sovereignty in the people, the revolutionary leadership, which came to power by virtue of being part of the revolution in 1969, exercised absolute power. Qadhafi’s socialism helped to ward off any challenges to the regime’s supremacy or any suggestion of disloyalty to his personal leadership. Under Qadhafi the country survived four decades of a non-democratic regime, during which political parties were banned and freedom of expression and association were limited. Libya is unique among the neighboring countries in North Africa in that the Green Book represented the basis of Qadhafi’s regime, and the dimension of corruption the country displayed was different. Even though Qadhafi started introducing economic reforms after the lifting

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of UN sanctions in 2003, these reforms demonstrated a limited capacity to diversify an economy that was overly dependent on oil and directly controlled by the regime. Like the other Petro-states, the country has a high record of human development but lacks data on poverty and inequality. Social inequality, however, has been obvious, suggesting an increase in corrupt practices by the regime—evident in nepotism and favoritism—in the absence of the strong rule of law and with restrictions on the public voicing their rights. A principal feature of corruption in the country is the tribal ties, which significantly increased social inequalities. This was confirmed during interviews A25, A26, and A27 with Libyan experts who asserted that the ‘systematic corruption’ at the heart of the Libyan regime was a primary trigger for the 2011 uprisings. To summarize, all the hypotheses of the study seem to be valid for the Libyan case: it is clear that oil richness, as well as the rule of law, are linked with the spread of grand corruption in the country. During interview A25, a professor stated that: “there has been no rule of law, and no one was allowed to criticize the leader, where the sha’byat have been based on tribal ties”. He concluded that: “Libya was like a big family ruling and owning the country”.

6

Causes of Corruption in North Africa: A Cross-National Comparative Analysis

While the governments in North Africa demonstrated standard features, the details of how their political and economic systems were run varied. The five countries were categorized as authoritarian regimes, with power centralized around the ruler, in which the president/king has remained in office throughout the period under study. Some of the region’s countries enjoy strategic locations for trade and economic activities along with considerable natural resources. In spite of this, the regimes have maintained a monopoly over the major sectors in their economies, allowing investment in specific industries and offering preferential treatment to their inner circles. The five countries witnessed different levels of social development, but in general, unlike the Gulf region countries, they did not offer their people an abundance of services. This section addresses the ten hypotheses of the study in a comparative analysis of the five countries. The aim is to offer an analytical overview and a better understanding of the causes of corruption in North Africa.

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Hypothesis 1 The higher the respect for the rule of law, the lower the levels of corruption in the country. Morocco was the best performing country on both V-Dem indicators, scoring relatively above 0.50. Libya scored below 0.50 on both indicators. Tunisia and Algeria performed poorly on the judicial constraints on the executive index, their scores of below 0.50 indicating different scores for abidance by the rule of law in these societies. Egypt scored better on the judicial constraints on the executive and low on the equality before the law indicator. These varying scores do not correspond directly to the levels of corruption in the five countries, but suggest scant respect for the rule of law in the region. Apart from Libya, the North African countries had well-articulated constitutions and laws, but abidance by law has been weak, especially among high-level officials, and the dominating executive authorities have faced few constraints from the legislative or judicial authorities. Reduced respect for the rule of law is a robust cause of corruption across all the North African countries, where the ruling elites have generally hindered the impartiality of the judiciary. The distinctive features within the different countries have triggered non-abidance by the rule of law in various ways. This has been reflected in the strong presence of the military and the emergency laws that have applied in Egypt since the 1980s and Algeria since the 1990s, which have posed a real stumbling block to the impartial rule of law in both countries. The Green Book presented a vague basis for running Libya’s affairs under the centralized powers of Qadhafi. The divine legitimacy of the Moroccan king denoted the regime’s uncontested authority. Ben Ali’s strong grip on power and the extensive powers he enjoys in Tunisia enabled him to intervene whenever he deemed necessary to sustain his power.13 Hypothesis 2 The higher the respect for political rights, the lower the levels of corruption. All five countries scored between 5 and 7 on the political rights index, with Morocco the best performing in the region. Lack of variation among the case studies suggests that they all restricted political freedoms and constrained political participation. Opposition political parties faced harassment by governments. The political activities of syndicates, 13 Refer to the case studies for further details.

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labor unions, and civil society organizations were curtailed. Political rights were challenged, with all countries in the region maintaining singleparty supremacy over the political system, and opposition groups having an insignificant political presence (banned or weak, perhaps less organized and only a poor reflection of democracy), bearing in mind their lack of influence on decision-making processes. Algeria and Libya are the most restrictive countries in North Africa, maintaining wide control and abusing their authority in the interests of restricting any political opposition to or criticism of their power. Political rights do not have a clear causal relationship with corruption, but the restrictions imposed by the regimes on political participation have increased the chance of political corruption flourishing among the five countries. Hypothesis 3 The higher the freedom of the press, the lower the levels of corruption. According to the Reporters Without Borders Press Freedom Index, Libya ranked worst among the five case studies. The various scores of the remaining cases (Egypt, Tunisia, Morocco, and Algeria) were relatively in line with their scores on the Corruption Perception Index (except Tunisia). Freedom of expression is guaranteed by law in the five countries, but strict censorship was practiced by the regimes, some issues were off limits for public debate, and journalists faced imprisonment when openly discussing the regimes’ unfair practices. In Tunisia, the lack of press freedom and the significant restrictions on journalists were the most noted cause of corruption in the country. Therefore, a negative relationship exists between press freedom and corruption, giving the elite the chance to act freely without being accountable or questionable. Hypothesis 4 The better the quality of regulation, the lower the levels of corruption. Tunisia, Morocco, and Algeria have maintained better-regulated business environments throughout the study than Egypt and Libya, which have scored relatively low over most of the years. The V-Dem state ownership of the economy indicator has shown strong government intervention in the economies in Algeria and Libya, while the government in Morocco has been the least in control of the economy. While neither indicator is a

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precise measurement of the quality of regulation, they give some idea of how the economies are functioning. The lack of efficient economic institutions allowed grand corruption to take place in the five countries the North African region, so there is a robust negative relationship between corruption and quality of regulation. The ruling elites and their clans have benefited greatly, receiving preferential treatment and bypassing bureaucratic procedures to run their businesses without having to put up with rigid processes and formalities. This has been made easier due to the poor quality of regulation, causing an increase in corrupt practices within the economies. Hypothesis 5 The greater the economic openness, the lower the levels of corruption. Tunisia, Egypt, Morocco, and Algeria scored low on the trade freedom indicator, but Libya has been the worst performing in this region. Looking at WTO membership, Tunisia, Morocco, and Egypt are members and have enjoyed greater economic openness and more diverse activities. Libya and Algeria only recently gained WTO access and are the worst performing on the CPI in North Africa; both countries have hindered economic openness and integration in the world trading system, and imposed clear barriers to the opening up of their economies, together with direct state control over the oil and gas industries and a high degree of secrecy over their management. Despite substantial natural resource endowments, neither country has sought to open up their economy and diversify their production activities. It is clear that there is a negative relationship between economic openness and corruption across most of the countries in the region. Hypothesis 6 The richer a country is in natural resources, the higher the levels of corruption. The data on rents do not offer a clear explanation for this variable; moreover, data is absent for Algeria and Libya, which both managed their industries with great secrecy. Natural resource richness shows a definite causal relationship with corruption in Algeria and Libya, the most corrupt across the North African region. In both cases, the lack of diversity in economic activities, the absence of economic openness, and reliance on natural resources as the primary source of income have intensified levels of corruption. In Morocco, the government’s monopoly over phosphate

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mining and production gave enormous scope for illegal activity. In Egypt and Tunisia, however, this variable does not indicate a causal relationship with corruption. Hypothesis 7 The higher the level of income inequality , the higher the levels of corruption. Data on income inequality were missing for Algeria and Libya, and were available for the other three countries for one or two years. Income inequality was apparent in Tunisia, Egypt, and Morocco, since incomes were modest in those countries and the widely underprivileged population felt deprived of the fruits of development. As a result, petty corruption became deeply rooted in Egypt and Morocco. Libya also saw widespread petty corruption in a disadvantaged, poorly educated and poorly paid population, especially in the absence of a transparent monitoring system for public office. This contrasts with Tunisia, where the population has been well educated, is socially aware, and is not involved much in corrupt practices despite high levels of income inequality. Experts have emphasized the existence of stark inequality, with resources wasted or abused for the benefit of those in power and their close circles, especially in the oil-rich countries, while the needs of the people went unmet. Expert interviews, the author’s observations, the literature review, and the available data combine to show a causal relationship between income inequality and corruption, manifested in different ways, among the societies of the five North African countries. Hypothesis 8 The higher the poverty rate, the higher the levels of corruption. Data on poverty rates were missing for Algeria and Libya, while in Egypt and Tunisia poverty rates reached 20%, and in Morocco 8% for the years available. Reports and expert interviews have been used as a substitute for missing data. The persistence of poverty in Egypt, Morocco, and Libya has clearly given extensive opportunities for more petty corruption in these societies, while less petty corruption was seen in Tunisia where a well-informed population mostly refrained from participating in corrupt activities. While poverty rates do not offer a strong causal relationship with corruption, they nevertheless represent a trigger for the spread of petty corruption within the population, especially evident in Egypt and Morocco.

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Hypothesis 9 The higher the literacy rate, the lower the levels of corruption Literacy rates are high across all five countries, exceeding 90% in Algeria, Libya, and Tunisia, and averaging 80% in Egypt and Morocco. Although this variable does not show a relationship with corruption in the case studies, it is clear that the quality of education is a valid variable to explain corruption levels. Education generally raises the ability of the individual to think critically and rationally. Tunisia, which ranks better than the rest of the North African countries on the CPI, had good education systems in place, offering quality basic and higher education for all citizens. Analysis of the other countries revealed that good-quality education was not accessible to all members of society, causing widespread ignorance among the general populations in Egypt, Morocco, Algeria, and Libya. The good quality of education was reflected in a lower level of petty corruption in the well-educated societies, while widespread petty corruption was observed in Morocco, Egypt, and Libya, where such practices were widely accepted as normal. Hypothesis 10 The more women are empowered, the lower the levels of corruption. Women across the five countries have been deprived of many of their social and political rights. Tunisia was the only exception, where women were specifically recognized in the constitution, although on the ground they still lacked political power compared to men. In Morocco, in contrast, women faced many legal restrictions. This implies that women are not properly integrated in society, especially in politics, and that widespread gender inequality is prevalent. There is no clear causal relationship between the women’s empowerment variable and corruption, but discrimination against women, minorities, indigenous, ethnic, or religious groups indicates a lack of equality within the societies of the five countries. The governments have practiced preferential treatment in many aspects of people’s lives, including civil rights, political privileges, appointments to public office, employment opportunities, and general social benefits. This has manifested itself in favoritism and nepotism, with some social groups having less access to benefits.14 14 For further discussion on this aspect, please refer to the individual case studies.

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In summary, the North African regimes were characterized by singleparty rule and the hegemony of their presidents/king. Even though the five regimes have always portrayed their political systems as democratic or moving steadily towards democracy, features of illiberal democracy have delayed political reform. The five countries introduced reforms during the 2000s to allow for increased political participation and competition, but these were superficial and did not result in real improvements in the political arena. Opposition groups, even Islamic political groups, faced severe limitations on many occasions in all these countries, and many of their leaders were imprisoned. The military was the backbone supporting the regime in Algeria, Egypt, and Libya, since all three countries had presidents with military backgrounds. As for economic conditions in the North African region, there was a clear lack of efficient institutions to run the economies, where the ruling elites had a free hand to manage the resources. This resulted in the establishment of monopolies and oligopolies that served the interests of the ruling elites and their close circles, where grand corruption was widespread. At the same time, the majority populations were disadvantaged, lacking welfare services due to the abuse of their national resources. The spread of poverty and increased income inequality, together with a lack of awareness resulting from the modest quality of education, have triggered petty corruption within these societies, especially in Morocco, Egypt, and Libya. In Libya, the absence of an appropriate constitution and Qadhafi’s reliance on the Green Book have deepened corruption. As the ‘revolutionary leader’, Qadhafi enjoyed a free hand to manage the country’s affairs without political or legal constraints, extending his authority by declaring his party the only legal party. Morocco’s king regards his authority as a spiritual one derived from God and the Prophet. As Commander of the Faithful, his ‘divine legitimacy’ adds a thick layer to his unchallenged power. The judiciary in Morocco was not autonomous, as the king chairs the Supreme Council of Magistracy (the highest judicial body) and appoints the judges, in effect undermining the impartiality of the judiciary. This has prevented any challenge to the king’s rule, increasing his powers in the country without accountability. In Egypt and Algeria, reliance on military support has strengthened and consolidated the authority of both presidents.15 15 Please refer to the detailed analysis of each country’s unique aspects in the case studies.

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The political variables as a group (the rule of law, political rights, and freedom of the press) indicate a strong causal relationship with the intensity of corruption in the five countries. The economic variables (quality of regulation, economic openness, and natural resource endowments) indicate a causal relationship with corruption among most of the countries in the region. However, the development variables (literacy rates, poverty rates, income inequality, and women’s empowerment) show an indirect relationship with corruption, with each variable affecting corruption differently. Literacy rates do not suggest any relationship with corruption within the region, but the quality of education across the five North African countries showed a negative causal relationship with corruption. Poverty and income inequality increased the opportunities for corruption, especially coupled with the poor quality of education. Women’s empowerment showed no direct relationship, but social inequality has generally been a feature in the five countries, where favoritism and preferential treatments have been deeply rooted, benefiting some groups while leaving others deprived of many services and welfare benefits. It can therefore be said that the continuing powers of the ruling elites in the five North African countries—the fact that they could not be challenged or altered—entrenched illegal practices in these countries in the political and economic spheres. Grand corruption has been a definite feature within these regimes, since the leaders have exercised full hegemony over the political system and enjoyed monopolies over the main economic activities, combined with unregulated businesses and investments. Oil richness in Libya and Algeria, the most corrupt countries in the North African region, was a catalyst for further grand corruption. Moreover, petty corruption took root and became an accepted behavior in the region’s societies—especially in Egypt, Morocco, and Libya—due to the absence of efficient bureaucratic structures with clear policies, procedures, and monitoring mechanisms, the unprivileged poorly educated populations lacking awareness of basic civil matters, the spread of poverty, and increasing income inequality.

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CHAPTER 8

Corruption in the Mashreq Region Plus Yemen: A Region in Turmoil

The Mashreq region1 is composed of Syria, Lebanon, and Jordan, while Yemen is associated with the Gulf region countries. However, for pragmatic reasons Yemen is analyzed with this regional group, as its circumstances are different from those of the Gulf Cooperation Council countries. Although the countries in this chapter share fewer common features than the other two regions, all these cases can be said to have high levels of perceived corruption, except Jordan. The Most Similar Systems Design is not employed when analyzing the causes of corruption across this group of countries, due to variations in their political and socio-economic settings. Nevertheless, the four countries considered in this chapter failed to implement sound reforms in the political and economic arenas due to the lack of any will to make changes, and across almost all institutions in these countries good governance notions were absent (Fig. 1). The region includes: a stable monarchy in Jordan, which has performed better than the other countries on all levels; a dysfunctional parliamentary system in Lebanon, the only democracy across the whole MENA region but with high levels of corruption; a presidential dictatorship in Syria that 1 It is worth noting that Iraq and Palestine are geographically included in the Levant/Mashreq region. But post-conflict countries such as Iraq do not provide sufficient and accurate data. Palestine is not considered a sovereign nation-state with functioning political institutions. Therefore, both are excluded from this book.

© The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_8

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Fig. 1 Map of the Mashreq Region & Yemen

has tightly controlled all aspects of life in a country that has witnessed extremely high levels of perceived corruption; and lastly, a presidential unified Yemen which has been the most corrupt across the MENA region. There has been a good deal of international involvement in the Mashreq countries which, along with the existence of terrorist groups, has resulted in perpetual instability in these countries, apart from Jordan. This has negatively affected the states’ control over their territories with challenges from other actors throughout the years under study. These countries have also been greatly impacted by identity politics in the form of tribal, ethnic, and sectarian distinctiveness. The resultant political conflicts have led to constant security and political concerns, as well as polarization among many of their populations. As far as this book is concerned, corruption is rampant across the state institutions in the four countries, which have been strongly dominated by ruling elites, around whom authority mainly revolved without checks or balances. The economies of these countries have large service sectors dominated by particular activities and exports. The governments played a central role in the economic sphere; many of the key decisions pertaining to the economy and other guidelines were at the discretion of those in power, as the economies and industries were largely controlled by the ruling elites, either directly or indirectly. Together with unstructured systems and poor regulatory procedures, this led to inadequate economic openness across the region. The economies had limited production varieties, trade barriers, and bureaucratic arrangements, resulting in weak integration in the international economy. Thus, the government and the economy in each of the countries were closely linked, with large-scale corruption occurring in the absence of clear regulation, less competition, and lack of monitoring mechanisms.

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Hence, the peoples of these countries suffered deprivation, due to the unfair distribution of resources, high income inequality, and the diversion of earnings to those in power. The general public were generally underpaid (except in Jordan) and did not receive adequate services from the governments, and the majority were poorly educated, with increasing unemployment and underemployment. Petty corruption was therefore prevalent in all four countries. Each of these countries reflects distinctive political, economic, and social set-ups. The following sections give a clear perspective on the different causes of corruption in each country. A concluding section following the four case studies highlights the causes of corruption across the countries in a cross-national comparative perspective, looks at the ten hypotheses, and sums up the causes of corruption in this sub-region.

1 1.1

Jordan

Regime Characteristics

The Hashemite family has ruled Jordan since 1921, enjoying a distinct religious legitimacy going back to the Prophet Muhammed. King Abdullah succeeded his father in 1999, and his regime witnessed some reforms compared to the earlier years of his father’s reign. Development policies were put in place, guided by young technocrats who explored the economic potential of Jordan and its political landscape. According to the 1952 constitution, the king enjoys discretionary powers. He is “the head of the state and is immune from any reliability and responsibility” (Jordan Constitution 1952: article 30), therefore he can rule without the consent of the legislative authority. He can convene and dissolve the parliament and can rule by royal decree when the lower house is in recess or has been dissolved. He appoints the judges, provincial governors, and members of the Senate (the upper house). He appoints and dismisses the prime minister, and the latter appoints the ministers under the king’s supervision (Jordan Constitution 1952). The legislative branch consists of an upper house (Majilis al Ayan) appointed by the king, and a lower house (Majlis An-Nowab) elected by the people for a four-year term. The lower house can amend and reject laws proposed by the executive, and has the power to dismiss the prime minister with a two-thirds majority vote, in which case the new minister has to win a confidence vote in the lower house and reshuffle the cabinet with the

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king’s approval to gain a majority (Jordan Constitution 1952). Parliamentary elections have often produced voices and figures who were supportive and loyal to the regime, and had a conformist influence on various political and economic affairs in the country. The floor was open for opposition, but the hypothetically designated legislative powers remained limited because of the king’s authority. The parliament’s particular influence extends only to the prime minister and his cabinet, not to the king or the royal court. In 2009 the king dissolved parliament, which was left without a functioning lower house, strong evidence of the king’s extensive powers (BTI: Jordan 2012; Polity IV: Jordan 2010). The judicial branch is formally independent, but remained subject to political influence. Since the king appoints the judges, the conduct of their work was usually in line with the royal principles, putting judicial autonomy on hold whenever the interests of key officials or the elite were at stake. In addition, the Royal Hashemite Court operates in parallel with the state bureaucracy, working under the direct supervision of the king. The country had no constitutional court to resolve disputes over government decisions until 2011. The population were severely repressed by the regime, with anti-terrorism laws in 2005 giving expanded powers to the State Security Courts, where defendants had no right of appeal and the proceedings were only partially open to media and the public. Although tribal laws were abandoned during the 1970s, they continued to be applied in certain areas, reducing state jurisdiction (BTI: Jordan 2012). Generally, the authoritarian features of the regime outweighed the democratic elements. Although some political actors were directly elected (lower house members, members of municipal councils, and local mayors), the 1952 constitution gave the king greater authority than these elected organs. There has been minimal separation of powers between the three branches of the government, heavily favoring the executive and particularly the king. The country scored −2 until 2008, and −3 in 2009 and 20102 on the Polity IV index, better than the Gulf monarchies, but still indicating a lack of any democratic features in the system. The country scored an average of 0.67 on the equality before the law index, a relatively good score compared to many countries in the region, and on the judicial constraints on the executive index, its scores ranged between 0.49 and 0.55 for the years under study, implying some judicial powers 2 The 2009 score can be due to the parliament being dissolved in 2009 and inactive until 2010.

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over the executive authority. However, during interview A28, a Jordanian professor expressed concern over the government’s performance on the rule of law as well as over the legal framework for fighting corruption. He mentioned that the national strategy to fight corruption and establish a culture of transparency among the different institutions was only launched in 2008 and little had apparently been accomplished on the ground. He stated that “there is clear connection between corruption and authority in Jordan”, highlighting that some laws were tailored to serve the personal interests of those in power while others were too vague. With resources being abused for the benefit of those in public office, the population lacked confidence in the government generally.3 The professor mentioned that officials in the middle and lower levels of the administration acted as agents carrying out corrupt activities that served those at higher levels. Further, some institutions, including the Royal Hashemite Court, the security service (mukhabrat ), and some Palestinian businessmen had a political presence with obvious influence on foreign affairs, domestic security, and economic policies. Far from being official, these powers relied on informal networks (BTI: Jordan 2012). There is some discrepancy between the data in the rule of law indicators and the analysis of the real political scene provided by the expert interview. It is therefore difficult to assume a strong negative relationship between rule of law and corruption in Jordan, but the political scene as a whole indicates a negative relationship between the two variables. Political parties were legalized in 1992 with restrictions on opposition groups, and when King Abdullah came to the throne in 1999, he opened up the political scene somewhat, allowing parties to act more freely. However, the party system in Jordan was generally weak and underdeveloped. The main opposition party was the Islamic Action Front (IAF)4 (Shaikh 2011; BTI: Jordan 2012), which faced repression and boycotted the elections in 2010 due to controversy over the voting law, election rigging, and vote buying reported in the 2007 elections in particular.

3 This expert (A28) was careful not to give negative feedback on the king’s rule, reiterating the affirmative role of the king in supporting citizens’ rights. 4 The IAF is the political party of the Muslim Brotherhood in Jordan. It has played an influential role in the Jordanian political scene, managing to hold around 50% of the seats in the parliament in 2002, but faced repression by the regime. Nevertheless, Jordan is the only country to give the Muslim Brotherhood an official role in politics; all the other countries in the region have banned or oppressed Islamic groups and movements.

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In 2007, a new law much criticized by the opposition parties imposed more constraints on all political parties. The law tightened screening of parties and impeded the emergence of new ones, and a party could be banned for criticizing a friendly country. Along with other restrictions, this decreased the number of parties from 30 to 15 in 2008, and fewer parties ran for the 2010 elections. Hence there were no major political reforms during the period under study, and while a temporary ‘one man, one vote’ election law was announced in 2010, this favored the traditional pro-Hashemite actors at the expense of the opposition, strengthening the presence in the political system of candidates loyal to the regime5 (BTI: Jordan 2010; Polity IV: Jordan 2010; Shaikh 2011; Al-Awamleh 2013). The right of association and assembly was accorded to independent political and civil actors, but was strictly limited by the government and monitored by the intelligence service. A new law in 2008 allowed increased state scrutiny of the bureaucratic and financial activities of international and domestic NGOs operating in Jordan. The public gatherings law was revised in 2008, making demonstrations subject to the approval of the local governor. During 2009 and 2010 the government exercised harsh legal restrictions over the activities of professional associations. Yet, cooperative associations were relatively well developed, and some informal networks that were largely reliant on kinship had the capacity to influence the government. Trade unions, like other associations, had limited power with the enactment of increasingly strict laws. This was confirmed in interview A29 with a government official, who stated that labor unions were weak, with no influence on the political or socio-economic scenes despite their membership of around 650,000, meaning that a huge proportion of the population are part of these ‘inactive entities’. The 1952 constitution states that Sunni Islam is the religion of the state (article 2), and the majority of the population adheres to Islam, while 3% are Christians who have the freedom to practice their religion without 5 The population in Jordan is somehow fragmented between the East Bank tribes of Bedouins who support the Hashemite monarchy and the Palestinians who constitute around half the population. Tension has been evident in the growing split between progovernment secularists and anti-government Islamists, which resulted in terrorist acts and state suppression on many occasions especially during 2002 and 2006. In effect, the regime carried out manipulations in favor of the Bedouin supporters, slowing down the democratic reforms in the country, fearing an Islamic majority in the government that might threaten the stability of the monarchy, especially in light of the unsteady political scene in neighboring Iraq, Palestine, and Lebanon.

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state intervention. Civil rights are guaranteed, with all ethnic and religious groups enjoying equal rights before the law. Nevertheless, human rights organizations in Jordan have reported arbitrary arrests and detention, and the use of torture in prisons and police stations. The Palestinian majority (who largely hold Jordanian citizenship) usually faced discrimination and negligence (Agrast et al. 2011; BTI: Jordan 2012). The legal changes that affected political parties, NGOs, and general freedom of association are reflected in the political rights indicator which has varied from 4 to 5 and 6 over the period of study. This gives the impression that the system restricted political and civil rights. During interview A29, the government official emphasized that political parties and NGOs were legalized to serve the political aspirations and personal benefits of the regime, adding that the opposition parties were ‘fake’, with no real influence on the government, and they existed merely to reflect a feature of democracy. Therefore, it can be said that there is a negative relationship between political rights and the perceived levels of corruption in Jordan (Fig. 2). Freedom of expression is guaranteed by the constitution but in reality, was subject to limitations (Jordan Constitution 1952: article 15). Journalists could not write about the monarch or the royal family without prior approval, and reporting anything that might harm the state’s “reputation or dignity” was strictly forbidden. These were taboos that could not be bypassed by the media. Self-censorship was practiced, and precensorship of newspapers and journals was allowed. During the period of study, the government owned the biggest two daily newspapers, while television and radio were subject to high degrees of control and scrutiny. In 2007, press restrictions were extended to online publications (BTI: Jordan 2012). Nevertheless, the country scored well compared to most of the MENA region countries, with an average score of 35 on the Press Freedom Index. Changes on the index have no clear effect on the perceived corruption levels in Jordan, yet huge limitations on freedom of opinion and expression existed. Although the king ensured democratic reforms, Jordan did not witness real transition towards democracy during the period of study. There were no checks or balances and the different authorities were dominated by the royal powers. The parliament had no real influence; it was not even active from 2009 until 2010, and amendments to party laws and public association severely restricted political rights and civil liberties. Censorship of all press and media outlets was common. Therefore, the three variables as a

Fig. 2 Regime characteristics in Jordan

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group indicate a negative correlation with corruption, especially political corruption, nepotism, and favoritism. 1.2

Economic Status

Jordan is a landlocked country with minor access to the Red Sea and an insignificant share of natural resources, and its national market is small. A clear feature of the economy is its strong connection with the royal palace and its affiliated elite, who enjoyed oligopolies and monopolies in several sectors of the economy. High regulatory constraints along with its scarce natural resources made the country’s economy fragile. Rents made up an insignificant share of GDP, reaching 1.87% in 2010. State ownership was high, with the government controlling the transportation sector, mineral extraction, and oil industries. Property rights were well defined and regulated, and widely followed, and there were some limitations on foreign ownership of land. The financial and banking sectors, and the capital market in Jordan were advanced, diverse, competitive, and in line with international banking standards (Loewe et al. 2007; BTI: Jordan 2012) (Fig. 3). During the 2000s, Jordan placed strong emphasis on the market economy, at least in its public rhetoric. In 2004, a competition law was enacted to enable competition and price setting with market rules. In 2006, private businesses began rapidly emerging and large state enterprises were privatized6 (Loewe et al. 2007; BTI: Jordan 2012). Although the macroeconomic policies maintained economic stability, the continuation of monopolies and oligopolies created barriers to investment, and the implementation of various policies was vague. The economy was less regulated than in many of the Arab countries, as trade was open, and the overall investment climate developed over the last decade (Loewe et al. 2007; Alissa 2007; BTI: Jordan 2012). Jordan joined the WTO in 2000 and signed several free trade agreements with other countries. Despite liberalization of trade regulations, some policies impeded the free flow of goods.

6 The telecommunications sector was open for investors in 2005. Also, 35% of the Jordanian Phosphate Mines company shares were sold to investment enterprises. Some electricity companies as well as big shares in Royal Jordanian Air were open for foreign investors. The oil sector was gradually privatized.

Fig. 3 Economic status in Jordan

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The business freedom indicator generally shows that the economic reforms were fairly successful in liberalizing the economy, but by 2006 the score had fallen. Jordan scored between 1.82 and 2.46 for state ownership of the economy, as the country opened up for private investment while maintaining some state control over important sectors. The progressive economic openness of the country was reflected in better scores on the trade freedom index throughout the years of study. However, there is no clear correspondence between the economic indicators and corruption. The professor interviewed (A28) highlighted that corruption occurred in the economy mainly because the vagueness of some rules and regulations enabled illegal practices, leading to the abuse of state resources for the personal benefit of tiny groups. He mentioned that this had two effects: “the first is the country being highly indebted with no explanations from the government on this, and the second is the increasing poverty among the population”. Both this interview and the literature imply a causal relationship between the quality of regulation and corruption in Jordan. Favoritism played a very clear role in businesses and economic activities in Jordan, where the royal palace had a strong impact on the status of the economy (Shaikh 2011). The economic variables as a group do not indicate direct relationships with corruption. While the quality of regulation has an obvious negative relationship with the perceived levels of corruption in the country, the economic openness and natural resource endowments do not offer a clear causal link with corruption in Jordan. 1.3

Development Status

According to the Human Development Index (HDI), Jordan generally scored 0.70, ranking higher than many other countries in the region. The percentage of the population who are literate is high, reaching 98.9% in 2007, with good access to education as well as good quality of education. The government spent around 10% of its budget on education. However, there is no direct clear relationship between literacy rates and corruption in Jordan. The country did not have a well-structured health insurance program, and other services also failed to benefit all citizens. Many basic services and goods were subsidized, which increased indirect taxation to reduce the fiscal burden. Poverty rates reached 13.3% in 2008 and 14.4% in 2010, and the income inequality score was high, averaging 34 during the 2000s. The economic reforms did not lead to improvements in living

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conditions, with widespread poverty among the Palestinian and Iraqi refugees for whom some services were not available. Inequality has been apparent, with the capital city enjoying more political and economic activities than the rural areas. Clear examples of favoritism by the regime included positions in public office being granted on the basis of tribal ties, kinship, and personal networks, tax irregularities, and distribution of resources (BTI: Jordan 2012; Al-Awamleh 2013). This was confirmed in interviews A28 and A29, both experts stating that corrupt practices in the economic sector had led to deterioration in the living conditions of the population generally, and increasing poverty rates that might be even higher than shown in the World Bank data. The two interviewees shared the view that even if laws existed, corruption would still take place, since ‘values’ were absent, and awareness was lacking in society, making petty corruption socially acceptable. Another point related to the absence of a culture of transparency and efficient monitoring, combined with a high sense of ‘individualism’ in Jordanian society. Taken together, these aspects contributed to corruption becoming rooted in the country among different social classes. Therefore, it can be said that there is a positive causal relationship between poverty rates and corruption, and also between income inequality and corruption, exacerbated by the acceptance of these unethical behaviors and abuses of the country’s resources. Moreover, it was mainly citizens who were employed in the Jordanian administration, even though Palestinians are in the majority. Networks played a clear role in recruitment processes. Refugees also held a twoyear temporary passport, faced restrictions on obtaining citizenship, and were granted few rights. After the Iraqi war in 2003, many Iraqis fled to Jordan, where an estimated 200,000 now live. Public relations initiatives by King Abdullah since 1999 in the interests of social cohesion and the creation of a more unified society have not been successful, and the increasing immigration of Iraqis, Egyptians, and southeast Asians led to an identity crisis. Women have not enjoyed equal rights to men in Jordan; the Shari’a is applied in personal status laws, including several clauses that discriminate against women and constrain their social lives generally (Agrast et al. 2011; Shaikh 2011; BTI: Jordan 2012). Calls for reform resulted in a quota for women and some ethnic minorities in the parliament, and the seven women appointed to parliament in 2003 were the largest representation in the legislature until it reached 10.8% in 2010. Women’s participation in the labor force was around 15% during

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the period of study. The full empowerment of women was never realized due to conservative tribal and religious figures and the dominant culture in society. While the women’s empowerment variable has no direct relationship with corruption levels in Jordan, the general discrimination against women and immigrants, and the obvious social inequality among different social groups gives the impression that the government was not fair towards the population with regard to rights, services, and social integration. Outcome Jordan has a sacred legitimacy (like Morocco), as the king derives his legitimacy primarily from God. The ruling family enjoyed wide powers under the 1952 constitution. Efficient checks and balances were absent since the king appointed the judges who were mostly in line with the royal principles in their jurisdiction. This suggests scant respect for the rule of law, with little judicial constraint on the executive powers of the king. Political rights and freedom of expression were not guaranteed, even though the king often emphasized the government’s efforts to realize democratic reforms to enable a vibrant political system with political competition and participation (Hamid 2009). However, these were not realized, since the parliament was inactive in 2009 and more restrictive laws on political freedoms were introduced. The economy seemed to have functioned well compared to the other countries in the Mashreq, but not all sectors were open for investment. The royal family enjoyed managing monopolies and oligopolies in the major industries. Even though the country initiated reforms to open up the economy over the years, some important sectors remained under direct or indirect state control. The rules and regulations in the economy were generally vague, which allowed corruption to rise without any legal challenges. The absence of proper economic policies led to grand corruption, which effectively increased income inequality due to the unfair allocation of resources, which, together with lack of awareness, in turn increased petty corruption. Women’s empowerment was insignificant and there was clear discrimination against Arab immigrants to Jordan. Expert interviewee A28 stated that “corrective laws were always arriving too late to respond to corruption which has already been imbedded in the political system as well as the mindsets of the people”. Another point mentioned

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was that the government always denied responsibility for corrupt conduct, while projecting it onto the citizens’ perceptions. Based on the above analysis, it can be said that the sacred legitimacy has been the catalyst for corruption in Jordan, and the main causes of corruption were low respect for the rule of law, poor quality of regulation, and high inequality.

2 2.1

Lebanon

Regime Characteristics

Lebanon is the only democracy in the MENA region and its parliamentary system is regarded as one of the most complicated political systems in the region. The Lebanese political and institutional arrangements are based on a revision of the constitution effected by the 1989 Taif Peace Accord, which initiated accountability aimed at rebalancing the powers of the executive branch (president and council of ministers) to reflect the sectarian composition of the diverse Lebanese society. The political system is characterized by a complex set of binding processes and consents, resulting in broad coalitions and a consensus-oriented government with reduced executive powers. The government has always been based on consensus among the political elites of the sectarian communities, and this has led to constant tensions and delays in government decisions on all matters. General and competitive elections were held regularly (every four years), and there were no restrictions on parties running for election. However, fraud and voting irregularities were frequent occurrences (Polity IV: Lebanon 2010; BTI: Lebanon 2012). Power originates from the parliament, whose members are directly elected as representatives of the population and in their turn elect the president of the republic. Afterwards a mandatory consultation with the president selects the prime minister. The executive power is highly accountable to the parliament and both parliament and president can initiate legislation (Lebanese Constitution 1926). A constitutional council and other additional institutions act as further checks on the government’s conduct. However, the implementation of this complex political set-up has been challenging due to the fragility of state institutions. The Lebanese parliament was considered weak, corrupt, and unaccountable to the public. Decision making was based on compromises between the diverse political elites and coalitions in the parliament. The country even fell into a political crisis between

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2005 and 2008, after the assassination of Prime Minister Al Hariri, and the political system was paralyzed. During this period, there was a shortlived national unity uprising against the pro-Syrian regime and the 2006 war between Hezbollah and Israel. These encounters, as well as persistent conflicts of interest between sectarian groups, presented obstacles to achieving consensus over important issues, causing weakness in the country’s political institutions. In the 2008 Doha Accord, the conflicting sectarian parties reached an agreement which provided the basis for the 2009 elections to take place. These elections ensured national unity, but only until 2011. Generally, this instability in the political scene delayed reforms and slowed down development on all levels. Between 2006 and 2008 the parliament did not assemble on a regular basis, calling the legitimacy of the government into question (Rigby 2000; Sidani et al. 2006; Polity IV: Lebanon 2010; Lebanese Transparency Association 2011; BTI: Lebanon 2012). The Lebanese constitution guarantees judicial independence. Judges and lawyers are highly educated, and the judiciary also represents confessional quota appointments based on the power-sharing structure of the political system. However, the judicial authority was subject to political intervention and pressure, particularly in highly politicized cases. There was also strong intervention in the appointment of prosecutors and judges. The public often found no real equality before the law, and the legal system offered no effective neutrality when challenged with influential adversaries. More than half the population claimed that the judicial authority was corrupt and one-third reported paying a bribe to its institutions (Transparency International 2011). This is also due to the dysfunctionality of the Judicial Inspection Authority, which from 2007 was tasked with supervising judicial impartiality (Polity IV: Lebanon 2010; Lebanese Transparency Association 2011; BTI: Lebanon 2012; TI 2016). Lebanon scores poorly on the rule of law index in the World Justice Project, indicating that the judiciary is subject to corruption. There have been many instances of political intervention, discrimination against certain groups, and interruptions (Agrast et al. 2011). Polity IV scored Lebanon 5 in 2005 and 7 in 2006, making it the only country in the MENA region to achieve these scores and be categorized a ‘democracy’. As for the V-Dem rule of law indicators, equality of citizens before the law scored an average of 0.54 until 2005, doing better in the years that followed with an average of 0.65. The same goes for judicial constraints on the executive, which scored an average of 0.18

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until 2005, later improving with an average score of 0.21. This implies that the country performed better on the indicators following the political conflicts, which is in line with the variation noticed in some of the years on the CPI. This denotes a negative relationship between the rule of law and corruption in Lebanon, especially with regard to the judicial authority and its checks on the executive powers. As for freedom of association and assembly in Lebanon, the country’s political party system was full of organizations that were ‘hypothetically’ political parties but in reality acted to mobilize support for particular political leaders on a sectarian and indigenous basis. Most parties were not institutionalized, and party commitment consisted of a pragmatic blend of clientelism and respect for an inherited leadership of sectarian interest. The major parties could hardly be considered influential. They did not play a meaningful role in developing opinions and political will, but functioned as mass mobilizers for significantly ‘personalized leadership’. The country has, nevertheless, been successful in integrating different sects socially and politically, with very minor marginal groups. Access to power achieved through the power-sharing concept and quotas for different sectarian affiliations lessened discrimination against any particular group in the country. In theory, Lebanese law preserves civil liberties and provides legal protection against abuse at the hands of the authorities and security forces. In practice, however, this protection was restricted to specific social classes with sufficient social power to mobilize intervention, and those were often far from abuse in the first place. The country has no state religion and freedom of belief is guaranteed in the Lebanese Constitution (1926: Article 9). Religious groups were institutionalized and enjoyed considerable power, especially in personal status matters. Lebanon has done comparatively well on civil rights, with a liberal association law and a long tradition of independent, non-profit civil society organizations operating in the fields of public welfare, culture, education, and development (Agrast et al. 2011). Many of these organizations were part of the patronage systems established by sectarian political leaders, independent and cross-sectarian organizations. Associations suffered, however, from the absence of local funding and they relied primarily on foreign sources of funding (Polity IV: Lebanon 2010; BTI: Lebanon 2012). Lebanon scored 6 on the political rights index in 2004, and 5 from 2005 until 2010. This change reflects the increased space given by the political system to different groups and parties to encourage participation in politics. The variation in political rights is reflected in the

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corruption levels, where the country also scored slightly better on the CPI in 2005. This indicates a negative relationship between political rights and the intensity of corruption in the country (Fig. 4). The Lebanese Constitution (1926: Article 13) recognizes freedom of opinion and the press; both are guaranteed in principle. However, these freedoms were subject to some intervention, in particular with regard to topics considered offensive to conservative notions of morality, religious beliefs and sensitivities, or triggering conflicting relations between the sectarian communities. In reality, journalists could not safely investigate sensitive cases and most media outlets were privately owned by the key political, confessional figures. The Lebanese Transparency Association stated that “the media is a true reflection of the state: polarized and divided along confessional and political lines. This, indirectly, restricts its freedom” (Lebanese Transparency Association 2011: 93). The country performed well on the Press Freedom Index, scoring an average of 25, but this has no direct causal relationship with corruption in the country. Looking at the political variables in Lebanon, the constitution is generally respected, but the sectarian elites weakened abidance by the rule of law and institutional checks and balances. The balance of power between the sects acted as the main check in the system and contributed to the very high levels of corruption, even though it is supposed to be a democratic system. Sectarian affiliations affected the political system, with the rule of law, political rights, and freedom of the press largely determined according to the power of those in the political game and their ability to dominate the scene according to their own self-interests (Rigby 2000; Sidani et al. 2006). Low respect for rule of law, especially related to judicial checks on the executive power, suggests a main cause of political corruption in the country, leading to a ‘dysfunctional’ democratic system. 2.2

Economic Status

Lebanese decision makers favored a laissez-faire economy with minimal state intervention and regulation, and after the end of the civil war in 1990, successive governments set consistent long-term plans aiming at integration into regional and international markets, developing infrastructure, reforming the public sector, privatization, and deregulation. Therefore, the economy was a liberal one, with very limited state intervention. Only a few strategic sectors (telecommunications, tobacco, energy) were state owned or under state supervision, and pricing was left to the market

Fig. 4 Regime characteristics in Lebanon

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except for basic goods. A significant informal sector existed, but around 60% of Lebanon’s economy consisted of oligopolies which were rarely regulated. Even in the private sector, strong monopolies and oligopolies wielded extensive control over fundamental activities in industry and were frequently able to manipulate the regulatory institutions in their favor, disadvantaging their competitors. The government made some effort to reform the administration during the 1990s, but serious challenges were presented by networks of clientelism which persisted at all administrative levels, under the control of leading figures among the political elite (Rigby 2000; BTI: Lebanon 2012). Market competition existed, but a system of apportionment according to sectarian quotas and political preferences played a key role in determining contenders for public-sector projects, with engrained clientelism arrangements for tenders. Foreigners were fully engaged in economic activities, whether through establishing Lebanese companies and joint ventures or creating a local subsidiary of their existing business enterprises, but Lebanese involvement was required for certain venture types (joint-stock or offshore companies). The establishment and registration of economic ventures was complicated by red tape and bureaucratic procedures (BTI: Lebanon 2012). The state ownership of the economy ranked 2.99, indicating that some capital belonged to the state while the rest was free from state control. Business freedom in the country averaged 60. These scores are in line with the drawbacks to the economy mentioned above; the absence of quality regulation and political figures’ control of the economy intensified corrupt practices based on sectarian affiliations and political aspirations (Fig. 5). As for trade, the Lebanese government signed agreements with the European Free Trade Association (EFTA) and the European Union, committing itself to improving competition, and a competition law was drafted. The government did not restrict foreign trade, and while there were no import controls, some businesses owned ‘exclusive licenses’ for the import of certain goods and brands (BTI: Lebanon 2012). Lebanon holds observer status in the WTO even though it formally applied for accession in 1999, and seven meetings of the working party were held prior to the end of 2009. Lebanon’s opening up of its economy is reflected in its score of 80 in 2010 on the trade freedom index, yet the non-accession of the country to the WTO indicates that the government needed to make more effort to align its regulations and policies with international standards. This implies that Lebanon was not prepared for integration in the international trading community, and the lack of

Fig. 5 Economic status in Lebanon

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concrete laws and policies in the economy might help explain the higher levels of corruption in the country. The country has insignificant shares of natural resources, rents from the resources averaging 0.001% and showing no relationship with corruption. The continued political tranquility along with the different sectarian interests hindered economic growth and slowed down the process of economic openness. High-profile Lebanese politicians had large shares in the economy directly or indirectly, benefiting greatly from their political status and thus affecting processes within the economy. During expert interview A32, it was highlighted that the economy in Lebanon suffers from lack of transparency in the business sector, with no audit practices. Looking at the economic variables in Lebanon, the natural resource richness has no effect on corruption levels, but both the quality of regulation and economic openness have a clear negative relationship with corruption. 2.3

Development Status

The delivery of public services has been impeded by a combination of dysfunctional bureaucracy, corruption, excessive political influence, and lack of sufficient financial allocation. Adequate basic infrastructure (such as water, sanitation, and electricity) has not reached many areas of the periphery and even in the capital city household electricity was not regularly available. In recent years, the government has embarked on reforms to improve the efficiency of social spending and reduce poverty. Lack of resources and perpetual political instability continued to delay progress in planning and implementing any social welfare policies. Unemployment insurance, a welfare system for the less privileged, and a public pension system (except for mandatory end-of-service indemnity payments) were all absent. According to a 2008 study by the International Poverty Center (IPC), around 28% of Lebanese people were poor and roughly 8% lived below the poverty line (set at USD 2.4/day) (Laithy et al. 2008). While income inequality data is absent, Laithy et al. (2008) noted that income disparity in Lebanon was striking, especially when looking at the regional differences. Relating this to corruption, it is clear from the analysis that the abuse of resources by the elite and reduced economic openness intensified poverty, due to the spread of grand corruption which triggered petty corruption among the general population. This inefficient allocation of resources led to the spread of regional disparities, prompting the people

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to perform corrupt activities to satisfy their needs and substitute for the government’s inadequate provision of services. Education has remained the single most important factor prolonging inequality in Lebanon. In principle, all Lebanese citizens have the right to free education, but not everyone has access to it. State and private institutions for education, training, and research and development existed, but improvements were needed in the whole education system, the quality of education, access to education, and investment in research activities. Public expenditure on education declined from an already low 2.6% of GDP in 2006 to 2.0% in 2008. The share of education in total government expenditure fell from above 12% in 2002 to some 8% in 2010. Thus, existing economic inequalities resulted in profoundly unequal opportunities for future generations, and social mobility was severely constrained (BTI: Lebanon 2012). Even though literacy rates reached 98.7% in 2007, the quality of education continued to be very poor. However, there is no direct relationship between literacy rates and corruption in the country. Generally, women enjoyed equal opportunities, but female participation in the labor force—particularly in the formal sector—was remarkably lower than that of males. Women were the first victims of poverty and adverse developments in the labor market. Lebanon had no holistic approach to women’s participation in social and economic life, resulting in their weak integration into society over different levels. While there was no institutionalized, legal discrimination or exclusion based on gender, women were largely absent from senior positions in nearly all sectors except media, advertising, and parts of the tourism industry. On the political scene, women who did occupy senior positions typically reached them through family and nepotism networks. Overall, the rate of economic activity is estimated at below 20% for women, as opposed to above 50% for men. There is no clear relationship between women’s empowerment and corruption in the country, but appointments are subject to preferential treatment based on affiliations and networks (BTI: Lebanon 2012). While literacy rates and women’s empowerment do not show a clear causal relationship with corruption in Lebanon, poverty rates and delayed welfare services may have been catalysts for corruption to take place, since the general population was robbed of basic services while political and economic tycoons enjoyed the fruits of development, preventing social inclusion.

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Outcome Even though Lebanon is categorized as the only democratic system in the MENA region, persistent clientelism was a core feature of the systematic political and economic corruption in the country. Despite efforts to ensure a proper system of checks and balances, in reality this was widely counterbalanced by various set-ups that assigned many positions to certain sects and communities. The political institutions clearly reflect a comparative power balance between different sects in society, rather than establishing efficient practices and ensuring accountability. Although the political indicators showed a relatively functioning political system in place, the reality revealed otherwise. Sectarian affiliations and religious polarization played robust roles in the running of state affairs, and political figures constantly abused their official positions. In addition, in the absence of efficient functioning institutions, the economy did not develop. It was mainly run through oligopolies and businesses that primarily benefited their owners, with fewer economic advantages for the people. This impacted the socio-economic status of people generally, resulting in fewer facilities and less basic infrastructure. Poverty rates reached 27%, causing more corruption to take root in the country, especially in the absence of clear codes of conduct. While the constitution was generally respected, sectarian elites had weakened respect for the rule of law and institutional checks and balances, and the powers of the sects acted as the main checks in the system (Wickberg 2012). Monitoring institutions existed, and the relatively free media sometimes resulted in public opposition. Yet, as the majority of public officials were part of the power structures maintained by the political elites, they were able to preserve their immunity and were above the law—prosecutions for abuse of office were unusual. Political corruption was rampant, with a pervasive general sense of impunity. Moral indifference overshadowed the country, since elected officials had little reason to fear adverse consequences from allegations of corruption. Involvement in petty corruption to facilitate, ease, or manipulate bureaucratic processes was abundant, and the same went for the use of networks to gain access to state resources, such as public-sector employment, public works contracts, or investment (Lebanese Transparency Association 2011). During expert interview A30, it was emphasized that the deep-rooted patron–client network in Lebanon is based on sectarian affiliations, political identities, religious profiles, and loyalties. The integration of the

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militia into the leadership after the extended civil war added a further dimension to the absence of accountability towards the people. Another expert (A31) noted that “what has made life in Lebanon palatable up to now was comparatively the tolerance for individuals with regard to the high level of political, social and cultural freedom. However nowadays, this is under threat where the freedom of expression is facing huge restrictions.” The sectarian system was a main cause of the high levels of corruption in the ‘dysfunctional’ democratic Lebanon, where the impartiality of the rule of law, the poor quality of regulation, and the lack of economic openness have been strongly affected.

3 3.1

Syria

Regime Characteristics

Syria witnessed a series of military coups over years until the Ba’ath party became the ruling party in 1963 and imposed a state of martial law. The party dominated the Syrian political system, consolidating its power by enacting the constitution in 1973 and having Hafez Al-Assad as the president. His rise to power achieved a cautious balance between the army, the Ba’th party, and a largely Alawite7 security institution (Doran and Shaikh 2011). Bashar Al-Assad succeeded his father in a popular referendum in 2000 and was endorsed in another referendum in 2007 as president for a further seven years. Bashar headed the Ba’th party and the armed forces, and the party maintained its central role in the decision-making process as the backbone of the Syrian political system (Polity IV: Syria 2010; BTI: Syria 2012). The Syrian political system clearly represents a ‘hereditary presidential recruitment’ type of regime, with the Alawite minority ruling the country and resisting any kind of political reform or alterations. Political power was highly centralized under Bashar’s rule, since neither the legislative nor the judicial branches posed any real checks to the executive authority. The martial law that was intended for wartime has been in force ever

7 According to the literature review on Syria and expert interviews A33 and A34, the Alawite are a Muslim religious minority who enjoy considerable protection and benefits and hold most of the high-level positions in the country, reflecting clear favoritism in the Syrian political system.

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since 1963. When Bashar came to power, it was expected that the security forces would have less involvement in political life, but in fact they frequently imposed restrictions on political activities (Ghadry 2005; Polity IV: Syria 2010; Doran and Shaikh 2011). As for the legislative branch, it has a unicameral house, composed of directly elected members. The 1973 constitution dictates that the Ba’th party has the majority of seats in the National Assembly. The party not only resided in the parliament but also controlled the key positions in the military and the intelligence service. From 1990, one-third of the unicameral National Assembly seats were open to be contested by ‘independent’ candidates who had been screened by the security agencies. National Progressive Front (NPF) candidates were entitled to the remaining seats (NPF was a coalition of the Ba’th and smaller parties supportive of the regime). Seats were therefore guaranteed for parties connected to the Arab Socialist Ba’ath party. In other words, parties in the NPF were the only ones permitted to participate in the elections. This indicates that the regime’s political openness was to maintain its social support rather than to move towards democratization. Moreover, members who crossed party lines were stripped of their parliamentary immunity and imprisoned. This left virtually all political power with the president, making the parliament to a great extent a rubber stamp for initiatives by the president and his small circle of loyal supporters. It was only during the 2005 party conference that the power of the Ba’th was seen to have eased, and a substantial number of the party’s members were replaced by a new generation who were loyal mainly to the president. Even though competitive parliamentary elections were held regularly during the years under study, they had no real impact in determining the members who already had the support of the party, the army and the security services. This also applies to the presidential elections where voters endorsed —through a referendum—the single candidate already chosen by the ruling Ba’ath party in 2007. The cabinet was hypothetically accountable to the elected parliament, but in reality, it was answerable to the president and the party on one side, and the security forces on the other. The parliament may have censured some ministers but it never posed a threat or challenge to the regime’s policies (Polity IV: Syria 2010; BTI: Syria 2012). The judiciary was weak and mostly controlled by the ruling elite. Despite a complex legal framework, the judiciary was not autonomous, and was vulnerable to the executive’s influence. Special Security Courts dealt with political offenses (BTI: Syria 2012). During expert interview A33 it was mentioned that

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there was no mechanism for suing the government or high-level officials. The expert highlighted that “civil cases lack professionalism in handling issues since effective tools of enforcement have been missing”. By and large, the independence of the judiciary was hindered by the presence of crony capitalism and security barons. Polity IV scored Syria −7 in 2001 after Bashar took over the presidency, showing slightly better performance than his father’s era which had scored −9. Syrian institutions contributed to the stability of the state but features of liberal democracy were absent. The three branches of the government were formally differentiated, each having its own jurisdiction, but the ruling party dominated the whole political system, inhabiting powers designated to the other two branches. The principle of checks and balances was therefore absent. In addition, the state relied on its monopoly and the effective use of force to deter any challenge to the regime’s stability; therefore, it was rarely confronted despite occasional conflicts in neighboring countries that had a spillover effect on Syria (refugees from Palestine and Iraq, and Rafik el Harriri’s assassination in Lebanon) (Raphaeli 2007; BTI: Syria 2012). The rule of law indicators scored very low on the V-Dem indices. Judicial constraints on the executive scored 0.08 for almost all the years, reflecting almost non-existent controls on the executive’s powers, and equality before the law scored 0.25 for most years, reflecting the unfair trials and lack of civil rights before the courts which the analysis has shown. With the imposition of martial law and the military’s strong hold over the political system, there was hardly any abidance by or respect for the rule of law. The military viewed Bashar Al-Assad as a stabilizing force allowing them to maintain their hold on power in the country. Therefore, there exists a strong negative relationship between the rule of law and corruption in Syria. Regarding political rights, the presence of political parties was highly constrained, as the Ba’th party enjoyed constitutional privileges as the only functioning and dominant party in the system (Haran 2016). Generally, political opposition to the Ba’th party was not tolerated and all the legal parties under the umbrella of the NPF simply functioned in the interests of the president and the party. Parties outside the NPF were

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illegal but were allowed on the political scene, and the only real opposition was the Muslim Brotherhood who remained banned.8 Consequently, even though the country had the appearance of a multiparty system, it functioned as a strictly single-party system (Polity IV: Syria 2010). Civil society was unable to act freely, conducting its work through the regime. For a brief period, opponents of the regime relied on foreign pressure to call for an end to the emergency laws, but they were subsequently cracked down on by the regime. Non-political and charitable organizations were well established and developed in the country. Informal civil society in the form of extended families, neighborhoods, and networks satisfied the needs of the people when the government withdrew from its welfare responsibilities. Assemblies and associations were given licenses to operate but were closely monitored by the regime. Trade unions and other interest groups were allowed but could not openly voice their demands or claim their rights. The influence of the unions declined even more with a labor law enacted in 2009 that favored employers and gave them the right to dismiss employees (BTI: Syria 2012). The regime’s limitations on political participation are apparent from the political rights index where Syria scored 7 for all the years under study, being categorized as ‘unfree’. This suggests a negative relationship between political rights and corruption, owing to the regime’s constant scrutiny of party and the civil society activities under martial law, and to the fact that the elite was ruling with no accountability, increasing political corruption among the higher levels of authority (Fig. 6). As for freedom of expression, Bashar’s first years in office witnessed slight liberalization of media. However, media in Syria were state owned and private ownership of printed media was permitted and operated within limits. Political debate on the internet was restricted and in general less opposition to the regime’s powers or legitimacy was allowed to be voiced. Even though repression eased throughout Bashar’s rule, many political detainees were held without charge or exiled, and torture continued (BTI: Syria 2012). Syria’s scores on the Press Freedom Index were the worst in the region over several years, reflecting the extent to which the emergency laws denied people’s basic rights and freedom

8 They were banned after the government crushed them in 1982 during an uprising; most of their leaders were imprisoned or exiled. Although the government has reduced suppressive acts towards the organization, many have faced imprisonment.

Fig. 6 Regime characteristics in Syria

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of expression, while strengthening the elite’s power in the face of any challenges. The group of regime characteristic variables clearly imply a negative relationship between the rule of law, political rights, and freedom of expression on one side, and corruption on the other. The hegemony of the Ba’th party, the strong political presence of the military, and the martial law allowed corruption to take place on the political scene, taking into consideration the lack of accountability of the regime. 3.2

Economic Status

Syria is categorized as a middle-income country that has seen periods of stagnation and fluctuating growth rates. The state sought to open up the economy, introducing reforms under the label of a ‘social-market economy’ but maintained a key role in economic activities. The vital productive areas in Syria were agriculture, energy, and state-owned industries (BTI: Syria 2012). State ownership maintained a value of 1.86 for almost all the years under study, indicating the state’s direct control over key sectors of the economy and indirect control over others. Syria relied heavily on oil revenues, which constituted around 70% of the state’s income until recently. With the decline in oil revenues, earnings reached only 20%, with compulsory taxes collected to fill the gaps created by this shortage while subsidies decreased (Raphaeli 2007; Haran 2016). Syria has maintained its development levels mainly due to the rents from oil revenues—natural resource rents reached an average of 23%—as well as foreign aid, along with remittances from abroad. The data on natural resource rents do not indicate a clear relationship with corruption, due to the secrecy with which this sector was run and the lack of information. Aware of the declining oil revenues and the growing population, the regime under Bashar Al-Assad proceeded with opening up the economy, but the reforms did not threaten the presidency or the interests of his clans. Many laws and regulations concerning the opening up of the economy were largely ignored, leading to slow development (Ghadry 2005; Raphaeli 2007). The delayed progress was also intensified by external threats such as instability in both Iraq and Lebanon and economic sanctions imposed by the US in 2004. The government was keen to improve the investment climate, lowering taxes and tariffs, and allowing unrestricted deportation of profits and investment capital. Nevertheless, the regime moved ahead with private capitalism, enhancing

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the personal interests of those in power. Although property rights are mentioned in the constitution (allowing public, private, and mixed property), different ways of indirectly limiting the ability of the regime’s opponents to own land or run big businesses were found (Hamad 2008; Borshchevskaya 2010). Although the regime launched successive waves of liberalization, permitting private enterprises to operate in all fields of the economy, this generated crony capitalism among a new class of elites and who controlled main sectors of the economy. Moreover, publicsector monopolies were transformed into private monopolies, lowering the share of the public sector in the gross national product (GNP). The financial sector was dominated by public-sector banking. In 2003, private banks began to operate and in 2010 a new banking law allowed foreign investors to hold up to 60% of Syrian banks. The banking sector grew rapidly and the IMF advised supervision of the sector’s development. The stock market was introduced despite huge ideological resistance from the Ba’ath party. Yet, the central bank failed to establish a consistent monetary policy to adjust interest rates and promote economic growth. Its capacity was limited, the government showing its ability to manipulate the money supply (Raphaeli 2007; Marshall 2008; BTI: Syria 2012). Syria scored very low on the business freedom indicator (averaging 55) and was categorized as ‘mostly unfree’. According to expert interview A34, the wave of privatizations enabled those in power and close to the political elite to benefit the most, easing patronage networks along with the rise of crony capitalism. Furthermore, excessive government ownership was said to have amplified grand corruption in the country. A negative relationship can be observed between the quality of regulation and the high levels of corruption in Syria (Fig. 7). As for trade, by the 1980s trade had expanded but was subject to many regulations. The country was not open to trade except through the state, since products needed primarily for public consumption were imported by public-sector entities (Perthes 2004; Raphaeli 2007). Syria was part of the Greater Arab Free Trade Agreement (GAFTA) and applied to join the WTO in 2001, signaling its intention to open up trade and liberalize its economy, but it held only observer status until recently. In this regard, Syria ranked low on the Global Trade Facilitation Index of the World Economic Forum, scoring low on competitiveness. The country performed poorly on the economic indicators of the Heritage Foundation, categorized ‘mostly unfree’ over many years and ranking below most of the countries in the region. It also scored low on trade freedom,

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Fig. 7 Economic status in Syria

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scoring 54 in 2006 and categorized as ‘repressed’. This implies the limited openness of the economy which has not abided by international trade standards or removed barriers to trade. There is therefore a negative relationship between economic openness and corruption in Syria. The economic status of Syria illustrates the elite’s control over the economy, with clear restrictions, the absence of appropriate regulation, less integration into international markets, and a general lack of economic openness. This exacerbated the rise of crony capitalism, as the regime worked on privatization, maximizing the personal benefits of its powerful elite. Therefore, there is a clear negative relationship between the quality of regulation and economic openness on one side, and corruption on the other. However, there is no manifest relationship between natural resource endowments and corruption. 3.3

Development Status

Syria redistributed benefits over large strata of the population in the 1960s and 1970s, yet during the 2000s the country’s scores averaged between 0.58 and 0.64 on the Human Development Index, and Syria ranked 111/169 among the last quintile countries in 2010. Regarding welfare benefits, the Ba’ath regime has implemented various schemes resulting in different outcomes. Education in Syria is open and free—with literacy reaching 92.4% in 2004—but over the years public education suffered from a reduction in spending. The same goes for health services which were of low quality. The less privileged who were unable to pay for good-quality private education and health care suffered from deteriorating government services with poorly maintained facilities. This withdrawal from offering welfare benefits gave rise to many privately funded civil society organizations that worked to help ease citizens’ lives. Government subsidies were offered for basic goods but shrank over the years on many items. Even though salary adjustments were introduced in the public sector, this did not greatly improve the lives of the people. Wages were too low to cover their needs, so most of the employed population took second jobs (El Laithy and Abu-Ismail 2005; Raphaeli 2007; Al-Sheikh and Hamada 2010). According to the Arab Human Development Report in 2004 (UNDP 2004), the country suffered high income inequality compared to the other Arab states, its Gini coefficient reaching 35.7, indicating huge disparities, and the poverty rate reached 35.2% in 2007, with population growth at a rate that could not be absorbed by

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the economy. The high poverty rates and rising income inequality reflect a positive relationship with corruption, as the general public resorted to illegal means to satisfy their needs. This was exacerbated by dysfunctional institutional settings that eased the spread of corruption in the lower levels of the administration.9 The Syrian constitution accords equality to all citizens, and Islamic law is the main source of legislation. The majority of the population are Muslim (averaging 90%). There is equal status for all religions and sects, but sectarian affiliations were the main determinants of the political process. The Alawi, a religious minority, enjoyed much protection and benefits. Personal status issues were governed by specific faiths and minorities enjoyed significant autonomy to handle such matters. The regime was able to handle ethnic and religious cleavages through a shared Syrian identity with a history of tolerance and acceptance. However, the relationship between the Alawi and Sunnis was controversial, combining tension with the need for support, as the former enjoyed political and security control privileges, while the latter dominated much of the business sector. Another issue that caused instability was the Kurdish population of around 100,000, whose dissatisfaction with their denial of citizenship encouraged frequent unrest, continuously repressed by the security forces (Raphaeli 2007; BTI: Syria 2012). This mirrors social inequality with regard to the distribution of benefits, as well as giving huge privileges to the minority affiliated to the ruling elite. As for women, they experienced challenges due to the conservative Islamic restrictions of their rights in society. Even the introduction of quotas for women in the parliament reaching 12% did not change their status in society. Their share in the labor force averaged 17% for the years under study. However female access to education was fairly equal to that of males. Yet, there is no indication of a causal relationship between women’s empowerment and corruption. Grouping the development variables shows that the modest levels of education of the general population, along with high poverty rates, high income inequality, and the sectarian privileges of the Alawite minority contributed to the spread of petty corruption in the country. Preferential treatment of the Alawite minority was apparent in all aspects of society.

9 This was also highlighted during expert interviews A33 and A34.

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While literacy rates and women’s empowerment show no evident relationship with corruption levels in the country, there is a clear positive relationship between income inequality and poverty rates, and corruption. Outcome The political system in Syria is the only one in the Arab world that has managed to transform the presidential system into a monarchy, with Bashar Al-Assad succeeding his father’s rule. The country has been ruled by the Alawite minority with the uncontested hegemony of the Ba’th party, and the military was the main pillar of the regime. Martial law was in place throughout the whole period of study. The fragility of the rule of law, the restrictions on political rights and the limited tolerance of freedom of expression imply that the three variables of the regime characteristics have a clear negative relationship with corruption (UNDP 2004; Al-Sheikh and Hamada 2010). State ownership of the economy along with the lack of proper regulation and policies impeded economic growth. Economic institutions mainly functioned to benefit a tiny class who were able to gain the fruits of the privatization wave, giving rise to crony capitalism. The country was not able to access the WTO during the period of study, indicating the existence of barriers and less abidance by international standards. There is therefore a clear negative relationship between the quality of regulation and corruption, as well as between economic openness and corruption. This delay in economic growth affected quality of life, leading to a reduction in welfare benefits and the quality of education. High poverty rates and income inequality were witnessed, increasing the incidence of petty corruption among the population seeking to satisfy their needs (Al-Sheikh and Hamada 2010). Systematic corruption has been a clear feature of the regime, and while Bashar initiated anti-corruption campaigns, his ability to fight misconduct was declining, given the lack of appropriate and transparent structures, the overlap between private and public sectors, the support of or failure to fight crony capitalism, rent seeking being allowed by political figures, and the marginalization of Islamic radicals and the promotion of secular and liberal forces to counter them (Heritage Foundation 2010; Al-Sheikh and Hamada 2010). From the above analysis, it is obvious that the roots of corruption are the minority Alawi rule and the martial status of the country. The fragile

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rule of law, poor quality of regulation, lack of economic openness, and income inequality are the main causes of corruption in Syria.

4 4.1

Yemen

Regime Characteristics

The Republic of Yemen was created in 1990 by the unification of the Yemen Arab Republic (North Yemen) and the People’s Democratic Republic (South Yemen). A single-party system ruled in both of them, with North Yemen ruled by the General People’s Congress party while South Yemen was ruled by the Yemeni Socialist Party. Both agreed on power sharing after unification, and from 1990 until 1994, the two parties worked to secure their survival through political pluralism. President Ali Abdullah Saleh had been the president of North Yemen since 1978, and became president of the unified country in 1990 when the constitution was enacted. A multiparty system was introduced during the early years of the Republic of Yemen, and parliamentary elections were held in 1993, 1997, and 2003. However, in 1994 a civil war between the two former leaderships left the political elite with an understanding that pluralism would lead to more fragmentation and separatism. As a result, the 1991 constitution was amended in 1994, setting up a system of direct election for the president (previously elected by the parliament); at least two presidential candidates would be nominated by the parliament for the popular vote. In 1999, the country’s first direct presidential elections were held, which Saleh won with a majority of votes. President Saleh was re-elected in 2006, again by majority vote; the elections were regarded as free and open, but marked by some violence (Polity IV: Yemen 2010; BTI: Yemen 2010). The 1994 constitution gave wide powers to the president. He is the Supreme Commander of the armed forces, he appoints the vice president, prime minister, the cabinet, and the upper house members, appoints and dismisses senior government officials, police and military officers (Yemen Constitution 1994: articles 105–126). The 2001 amendments to the constitution consolidated the powers of the president, extending the presidential term from five to seven years. Yemen has a bicameral legislature, an upper house nominated by the president and a lower house directly elected by popular vote. At times, the parliament acted autonomously,

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initiating minor legislation, delaying and overlooking presidential initiatives. However, the parliament was not effective in checking the executive for several reasons. Among these are the legal constraints on its role, the hegemony of the president’s General People’s Congress party over seats in the National Assembly and most of the leading positions in the government, and the profiles of the members of parliament, who were often poorly educated or even illiterate, many also coming from military and security backgrounds, and thus did not pose any challenge to the executive power. Membership of the parliament reflected very diverse personal, tribal, and regional interests, leading to indecisiveness on many political issues. The electoral system served a limited number of citizens in Yemen, favoring local tribal sheikhs, regional leaders, and other personnel who had an interest in the country’s public resources (Robinson et al. 2006; BTI: Yemen 2010). This was also mentioned during interview A37 with a Yemeni professor, who highlighted that elections were mainly controlled by a small number of tribes who also controlled the country’s resources and the whole political scene and could never be challenged. According to the constitution, the judiciary is independent: “the judges are independent and not subject to any authority, except the law. No other bodies may interfere in any way in the affairs and procedures of justice. Such interference shall be considered a crime that must be punished by the law” (Yemen Constitution 1994: article 147). But in practice the courts were inefficient (it took years for cases to be settled), weak, and severely corrupt, facing regular obstacles in enforcing the law due to the intervention of the executive. Even though the president no longer served as head of the Supreme Judicial Court, he appointed its chair, making the judiciary subordinate to the executive in practice (BTI: Yemen 2010; Robinson et al. 2006; U.S. Department of State 2015). During interview A36 with a former Yemeni official, he stated that “the judicial authority has been powerless, not taking any role in the Yemeni system”. Polity IV categorized Yemen as a ‘close autocracy’ scoring −2 for all the years under study. As for the rule of law, the country has been among the worst performing in the region, scoring an average of 0.23 on the equality before the law index and 0.20 for judicial constraints on the executive. In the absence of an efficient system of checks and balances, the president’s domination of the country was further formalized by the constitutional amendments of 1994 and 2001. The overwhelming majority of his party in parliament and the weakness of the judiciary

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served to centralize his powers. The expert (A36) remarked on the “patrimonial relations and clientelism” that were the basis of the political system in Yemen. The president’s close circles held the majority of high-level positions in the government, and he managed to distribute other positions to his sons, military personnel, and tribes to maintain their political loyalty and support. Low respect for the rule of law has deepened corruption in Yemen, indicating a negative relationship between these two variables. Although Yemen’s is theoretically a multiparty system, in practice the country was ruled by a single party, the General People’s Congress party—the former ruling party of North Yemen. President Saleh headed the party, enabling it to maintain hegemony over the different government institutions. A number of municipal, parliamentary, and presidential elections were held in the 1990s after the country’s establishment. While elections were problematic, and violence erupted on several occasions, considerable improvements were realized with the supervision of domestic and international observers. The election law still favored the ruling party and frequent irregularities occurred during voting and registration. The General People’s Congress party also dominated municipal-level administration, and at elections in 2001 and 2006, party members won with absolute majorities. Opposition political parties were tolerated but the president worked constantly to weaken their activities through institutional and political limitations. The Islamic party—the Yemeni Alliance for Reform (Al-Islah)—was closely aligned with the General People’s Congress and was a powerful ally, but this changed when the government started to oppress Islamic movements. Another prominent opposition party was the Yemeni Socialist Party—the former ruling party in South Yemen—which has often challenged the hegemony of the General People’s Congress and was the main opposition party (BTI: Yemen 2010; Al-Zwaini 2012; U.S. Department of State 2015). Freedom of association and assembly were allowed as long as they did not approach national unity issues or the president, leading to constraints on their activities. A strong network of diverse autonomous groups and associations existed in Yemen. Non-institutionalized but based on tribal and family ties, they were built on trust relationships and were usually self-organized. The strength of tribes in the country determined citizens’ rights, and some of the tribes identified themselves more as tribe members and less as Yemeni citizens, since the restrictions exercised by the state left the people feeling a limited sense of identification with the state. Civil society in Yemen was relatively weak, with reduced financial resources and

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management skills. NGOs were insignificant and had only basic organization; the government had no definite stance towards them. However, intellectuals, artists, or civil society actors critical of the government faced harsh treatment, kidnapping, and imprisonment. As for civil liberties, all Yemeni citizens are equal, but there were violations, and the ‘war on terror’ negatively affected human rights, giving the government the right to take hostages and violate civil rights, as documented by Human Rights Watch in 2008. Even though the state functioned with modern secular institutions, religious codes were part of the political scene. Shari’a was the main source of legislation in the country, according to the 1994 amendment to the constitution, which negatively impacted minor religious groups such as Jews (Robinson et al. 2006; BTI: Yemen 2010; Sharqieh 2011; Al-Zwaini 2012; U.S. Department of State 2015). Political rights scored between 5 and 6 in Yemen, indicating Saleh’s strict control of political participation. The reality in the country showed that public and private life was regulated much more strongly by tribal and religious traditions than by political institutions and associations. This is clear from the literature as well as expert interviews A35, A36, and A37, showing that the absence of proper channels for political participation can be a cause of political corruption, especially when privileges are granted to tribes and the ruling party at the expense of the general population (Fig. 8). As for freedom of press, the 1994 constitution (article 41) guarantees freedom of expression “within the limits of the law”. There was close scrutiny and intervention from the government, and journalists often faced harassment when reporting on sensitive issues like corruption or domestic conflicts. Generally, the media were intimidated, functioning under extreme pressure from the government and armed opposition groups. Internet censorship was also commonplace. Yemen has consistently ranked low on the Press Freedom Index (170/178 in 2010) in view of the violence perpetrated against demonstrations and the harsh oppression of political activists by the security forces. The government would not allow any opposing opinions to be voiced against the regime, which would explain the existence of corruption among the political elite. Looking at the regime characteristics in Yemen, it is obvious that following unification in the 1990s, power was centralized in the hands of the president and his ruling party, with no parallel powers in the political system or any checks on the executive branch. Political participation and freedom of expression were limited, indicating very little input in the

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Fig. 8 Regime characteristics in Yemen

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political decision-making process by the general population. Few groups enjoyed political privileges, there was evidence of political corruption in the political system due to the low respect for the rule of law, limited political rights, and absence of press freedom. 4.2

Economic Status

During the early years of Saleh’s rule, the economy mainly relied on agriculture, local industries, and remittances from abroad. Over the years of his rule, Saleh continued to centralize the distribution of power and wealth, establishing a system of patronage based on oil rents and access to business opportunities, and appointing his family members to key positions in state-owned companies (Hill et al. 2013). The V-Dem state ownership of the economy scored 2.35 for all the years under study, indicating direct and indirect state control over the main economic activities. The state’s involvement was clear in many sectors like wheat, transportation, telecommunications, and media, enterprises that dominated the market through monopolies and oligopolies. Privatization developed slowly in the country, with few small public companies being privatized, while larger state-owned companies remained under the control of the government. This suggested deep-rooted interest on the part of the several groups governing the economy in keeping state monopolies untouched (BTI: Yemen 2010; Hill et al. 2013). Moreover, the government enjoyed a monopoly over the oil sector, in which Saleh himself was the main actor in charge of major deals and production agreements with oil companies. The Yemen Petroleum Company dominated imports and distribution. International companies were present in the hydrocarbon sector, but their contracts were reported to the Ministry of Oil and Mineral Resources through the Yemen General Corporation for Oil and Minerals. Corruption in the oil sector took the form of allocation of service contracts and import/export deals. The president allocated fuel subsidies on a quota basis to his relatives and close circle, who could subsequently sell and trade their quotas freely in the market. The economy became dependent on imports and services that were mainly generated through its oil wealth, relying heavily on revenues from oil (80–90% of all government revenues), and the natural resource rents averaged 33% over the period of study. Though oil in the country is limited and was expected to be depleted in a decade, the country did not work on diversifying its economic and industrial activities. For all these

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reasons, natural resource endowments may be said to represent a cause of corruption in Yemen (BTI: Yemen 2010; Hill et al. 2013). During the late 1990s, Yemen started to liberalize the economy and the banking sector, along with cutting some subsides. Technocrats under the guidance of the IMF and the World Bank sought to assist the government in achieving economic liberalization. It was mainly the elite who benefited from the polices implemented and established big trading networks. Tribes, big families, and businessmen managed to control the vital economic activities. During the 2000s, as oil production started to decrease, a new generation of investors, led mainly by Saleh’s son, began to emerge among the elite to advocate reforms of the economic sector that would allow for a post-oil economy (Fig. 9). Yemen applied for WTO membership in 2000, and worked on liberalizing its economic policies and foreign trade, and reducing tariffs. It succeeded in becoming a member of the organization in 2014. Competition opened up slowly and the government initiated cautious uniform rules for market participants (Robinson et al. 2006; BTI: Yemen 2010; Hill et al. 2013). Yemen was categorized as a ‘repressed’ economy, with business freedom scoring an average of 55, and trade freedom an average of 65 over the years. This shows that the poor quality of regulation as well as the reduced economic openness of the country, which could not access the WTO until 2014, caused higher corruption levels. A former Yemeni official mentioned in interview A36 that: “grand corruption is very clear as well as petty corruption due to the lack of any efficient mechanism to enforce laws or even draft effective ones to regulate the economy. The economy has been under the control of the ruling elite, tribes, businessmen, technocrats and the military.” This shows that regulatory and administrative structures in the economy were less well developed in the absence of monitoring mechanisms. The taxation system in Yemen was also underdeveloped, with limited popular trust and widespread reports of bribery, and low civil service salaries encouraged bribery to flourish. Strong evaluation, investigation, and dispute resolution mechanisms were also missing from customs administration. The procurement process lacked transparency and accountability, encouraging rampant corruption on all levels. Ministries would make sudden procurement decisions, and contracts were often renegotiated with winning bidders, leading to delays and the spread of corruption throughout the whole process. Private property in Yemen was regulated but there was no proper land administration

Fig. 9 Economic status in Yemen

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and clear guidelines on property rights were not honored. Lack of documentation and disputes over land ownership had a severe impact on investment in reported fraud cases. The banking sector was underdeveloped but dominated the financial sector and a stock market did not exist. The country was among the world’s big sources of illicit capital outflows, with huge amounts of money leaving the country between 1990 and 2008. This clearly shows the many faces of corruption in a country where sovereign domestic wealth has been stolen (Robinson et al. 2006; BTI: Yemen 2010; Hill et al. 2013; GAN Integrity 2016). It is clear that from grouping the economic variables, a strong negative relationship emerges with the perceived levels of corruption in Yemen, due to the absence of proper regulation and dysfunctional institutions, less economic openness, and the tight control of the economy by the ruling elite and its clans, with Saleh himself a main decision maker in the oil sector. 4.3

Development Status

During the period of study, Yemen was the poorest among the MENA region countries, with low levels of human development. Political instability, depleting oil reserves, and weak economic performance contributed negatively to the society’s welfare status. Despite development assistance efforts, the country continued to suffer from high rates of poverty and food insecurity. According to the World Bank data the population living below the national poverty line reached 34.8% in 2005, and social exclusion at all levels of society was extensive. The World Food Programme estimated that more than 45% of the population consumed insufficient food, with around one million children suffering from malnutrition. The number of people without access to clean water and sanitation was estimated at 13 million (out of a total population of 24 million), and around 6 million had no access to health care. The majority of the population were farmers of low socio-economic status excluded from development. The gap between rich and poor was wide, and the Gini coefficient reached 35.8 in 2005. Government expenditure on social security was very modest, covering only civil servants. Support for the elderly, sick, and unemployed was generally taken care of by informal family and tribal networks. International assistance played a large role in helping the government deliver some services, as the state’s capacity was weak and the policies of the different government entities were poorly coordinated,

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reflecting a malfunctioning administration (Robinson et al. 2006; BTI: Yemen 2010; Sharqieh 2011; Hill et al. 2013). Altogether, increasing income inequality and poverty rates show a direct positive relationship with corruption, explaining the spread of both grand and petty corruption in the country. The education sector witnessed many shortcomings, ranging from low government expenditure—averaging 1% in contrast to the high spending on arms and military equipment averaging 6%—to lack of basic infrastructure, poorly trained teachers, and the presence of ‘ghost workers’ reportedly very high in the Ministry of Education along with other forms of corruption. More than half the population is literate, with more literacy among males than females, and in urban areas than rural ones. Rural areas were underprivileged and lacking modern educational institutions. Research and development facilities were non-existent. (Robinson et al. 2006; BTI: Yemen 2010; Hill et al. 2013). With an undeveloped education system producing low-quality education, Yemen as a poor country had a large percentage of unqualified labor force and government bureaucrats. This was mirrored in maladministration and weak capacity in government institutions. The lack of good-quality education is a cause of corruption in the country: the absence of proper means of gaining both knowledge and awareness explains the spread of petty corruption among the general population. As for women’s empowerment, they were underrepresented in private and public life, with an average of 22% of the labor force, mainly in the agriculture sector, and around 20% representation in the public sector as civil servants. Only one woman has served as a member of the parliament and two were ministers during the period of study. There have been many calls for quotas to be introduced for women in parliament, but this was discouraged by conservative politicians and has not been achieved (BTI: Yemen 2010). However, women’s empowerment does not show a clear relationship with the high levels of corruption in the country. As a group, the development variables indicate the comprehensive absence of proper welfare benefits for the masses, poor-quality education, high poverty rates, and income inequality. Poverty rates and income inequality demonstrate a clear positive relationship with the levels of perceived corruption in Yemen, while literacy rates and women’s empowerment do not reflect a causal relationship with corruption.

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Outcome Despite unification, politics in Yemen continued to reflect regional and tribal interests, clearly visible in the distribution of resources in the country. Competition and confrontation between the North’s Congress Party and the South’s Socialist Party remained a constant source of instability in the country. Generally, the population was fragmented along tribal, sectarian, and economic lines, creating a variety of identities widely different from the national Yemeni identity. Tribes were the main political and economic actors in the country. Both politics and the economic scene in Yemen were based on the same elite of the military, tribes, and the ruling party, and Saleh’s patronage relied on oil rents and access to private businesses. The political variables therefore imply a strong negative relationship with corruption, as well as the economic ones. Being among the poorest and least developed countries, Yemen had fragile institutions, low-skilled civil servants, underdeveloped infrastructure, poor quality of education, and deficiencies in services. The most common form of corruption was the taking of bribes by civil servants, among whom petty corruption was widespread due to the lack of a minimum wage. This was exacerbated by poor administrative capacities and lack of awareness. Grand corruption took root, based on the combination of weak institutions and a fragmented elite. Informal networks increasingly abused the state’s resources to serve their own interests, and the oil wealth was a main source of grand corruption. This resulted in a weaker Yemeni system dominated by a small number of groups—tribes from North Yemen, military officers, businessmen closely linked to the president, and technocrats representing the new source of experience in the government (Robinson et al. 2006; Alkebsi and Boucek 2010; BTI: Yemen 2010). The control of Yemen’s regime by Saleh, his ruling party, and the military consolidated their powers and gave corruption the chance to flourish widely. The most apparent causes of corruption in Yemen are low respect for the rule of law, poor quality of regulation, less economic openness, and high poverty rates.

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5 Causes of Corruption in the Mashreq Region Plus Yemen: A Cross-National Comparative Analysis The Mashreq countries and Yemen reflect diverse political and socioeconomic conditions, unlike the homogeneous circumstances prevailing in both the Gulf and North African regions. The three Mashreq countries and Yemen have witnessed higher levels of corruption than the other two regions during the period of study (1999–2010). The political systems in Jordan, Syria, and Yemen have been authoritarian, while Lebanon has been, theoretically, the only democracy across the whole MENA region. None of the four countries had functioning systems of checks and balances, primarily due to the reality that their political institutions were weak, unable to achieve good governance in the face of the executive authority. The four countries lagged behind full integration in the global economic system. Furthermore, they had modest administrative structures and the economic processes that could resourcefully regulate their markets were chaotic. The countries lacked transparent policies, enabling the ruling elites and their inner circles to own big shares in economic activities without encountering any restrictions or monitoring. Building on this, the developmental and societal circumstances in this region and Yemen failed in many respects to satisfy peoples’ needs. The following section addresses the ten hypotheses of the study to give an overall view on the different causes of corruption within the four countries in this region. Hypothesis 1 The higher the respect for the rule of law, the lower the levels of corruption in the country Jordan was the best performing country on both the V-Dem indicators, scoring relatively above 0.50, while Syria and Yemen scored rather below 0.50 on both indicators. Lebanon performed poorly on judicial constraints on the executive, scoring below 0.50. This indicates different degrees of abidance by the rule of law in these societies. The most corrupt countries scored quite low on both indices, with higher scores for Jordan than for the other case studies, and Yemen performed very low on both indices. This is in line with the four countries’ variations in corruption levels. By and large, a balance of power among the three branches of authority in the Mashreq countries and Yemen has been absent, with limited judicial

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constraints on the executive powers, especially in Syria which scored the worst among them 0.08 on the V-Dem index. This low respect for the rule of law, and especially the judicial constraints on the executive powers, was a robust cause of corruption across the four countries. Hypothesis 2 The higher the respect for political rights, the lower the levels of corruption Political parties faced restrictions in the Mashreq countries and Yemen. The best performing is Jordan (scoring 4, 5, and 6 during the period of study), followed by Lebanon and Yemen (scoring 5 and 6) then Syria (scoring 7). This is relatively in line with the four countries’ corruption levels, indicating a negative relationship between political rights and corruption in these countries. The countries have seen powerful consolidation of authority in the hands of the ruling elites, along with the support of significant tribes, religious sects, and the military. The rulers’ powers were not challenged or contested during the period of study (except in Lebanon). Political inequality was observed in all four countries, with various limitations on political participation (a central role for the ruling party, repression of opposition parties, influential tribal networks, polarization, and sectarian interests). Parliamentary elections in the respective countries led to the existence of loyal profiles in their parliaments. Legal constraints on association and assembly rights were especially apparent in Yemen and Syria, and civil society organizations mainly exercised non-political roles with restrictions on their activities. More specifically, tribes played strong roles in decision making in Jordan, religious sects determined the authority arrangements in Lebanon, the Ba’th party and the military were the supporting pillar for the minority Alawite rule in Syria, and tribal interests, the military, and President Saleh and his ruling party controlled the whole system in Yemen. Hypothesis 3 The higher the freedom of the press, the lower the levels of corruption According to the Reporters without Borders Press Freedom Index, Lebanon ranked better than the other three countries during the period under study. Meanwhile, Jordan ranked well compared to Syria and Yemen (which ranked worst among all the case studies). These rankings

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are comparatively in line with the four countries’ scores on the Corruption Perception Index. Yet, Lebanon presents an exception as it witnessed higher corruption than Jordan, even though it scored much better on the freedom of press indicator. With the exception of Lebanon, high censorship of media content and restrictions on freedom of expression were in place in the three countries, with varying approaches and degrees of state intrusion. Journalists even faced imprisonment and harassment in Syria and Yemen, and media were cautious about addressing sensitive topics. That being said, there was a causal relationship between freedom of the press and corruption across the region and Yemen. Hypothesis 4 The better the quality of regulation, the lower the levels of corruption Jordan and Lebanon performed well on the business freedom indicator, while Yemen and Syria scored relatively low over most years, showing less regulatory efficiency in the economy. The countries performed similarly on the V-Dem state ownership of the economy indicator, denoting direct and indirect control of economic activities. This makes the relationship between government control of the economic sectors and corruption difficult to explain. In this regard, even though the indicator does not measure the variable accurately, it gives an idea of how the economy was running in the countries under study. In Jordan, Lebanon, Syria, and Yemen, the absence of transparent procedures and the poor quality of regulation enabled grand corruption to flourish. In Jordan nepotism was a commonly accepted behavior, in Lebanon strong patron–client networks directed economic activities, in Syria the Alawi minority sustained crony capitalism, and in Yemen the combination of informal networks among the elite, businessmen, tribes, and the military increased corruption.10 This variable implies a strong negative relationship with the levels of corruption across the four countries. Hypothesis 5 The greater the economic openness, the lower the levels of corruption Jordan performed better on the trade freedom index than the three other countries, followed by Lebanon, Yemen, then Syria. The four countries 10 Please refer to the case studies for further discussion on these aspects.

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had varying trade freedom scores during the period of study, indicating an unsteady trading pattern. While Jordan became a member of the WTO in 2000 and Yemen gained access in 2014, Syria and Lebanon have not yet become members of the organization. By and large, the late accession of Jordan and Yemen and the non-accession of Syria and Lebanon corresponds to their being among the worst performing countries on the CPI across the MENA region. These countries had rigid trading systems, with barriers to investment and fragile institutions. The relative dysfunctionality of the economic structures across the four economies wasted the opportunity to integrate properly in international markets. The hypothesis on economic openness therefore demonstrates a clear negative relationship with corruption. Hypothesis 6 The richer a country is in natural resources, the higher the levels of corruption Analysis of this variable is based on the percentage of natural resource rents in GDP, and does not imply a precise causal relationship with corruption. Both Jordan and Lebanon have minimal natural resources, with insignificant rents, while Syria and Yemen are comparatively rich in resources with rents averaging 25% for the years under study. The regimes of the latter countries fully controlled oil resources, and in Yemen President Saleh himself was a decision maker in this field. Nevertheless, although data on management of this field was missing, natural resource endowments do not show a strong causal relationship with corruption across these countries. Hypothesis 7 The higher the level of income inequality, the higher the levels of corruption Data on income inequality is available for one year, when Jordan’s income inequality reached 36, Syria and Yemen reached 35, and data for Lebanon is missing. Expert interviews and international reports were useful in assessing this variable. Income inequality was apparent within the societies of the four countries, especially as elites enjoyed all the privileges while the general populations were deprived of many basic welfare needs. Services were not adequately delivered, leading to an uncomfortable standard of living for the general population, with some basic services either not accessible or not well maintained.

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Experts emphasized the existence of grand corruption, with resources not allocated properly to serve the needs of the people, resulting in either the waste or abuse of these resources for the benefit of those in power and their close circles. Income inequality can therefore be said to have caused higher levels of corruption in the four countries. Hypothesis 8 The higher the poverty rate, the higher the levels of corruption The percentages of people living below the national poverty line across the four countries corresponded to their rankings on the CPI, with poverty rates reaching 13% in Jordan, 27% in Lebanon, 30% in Syria, and 34% in Yemen. The experts interviewed noted that data on poverty rates is not accurate, and poverty is widespread among the populations of these countries (especially Yemen), reaching higher rates than documented. The spread of poverty and the very low wages enabled petty corruption to spread widely across all levels of the bureaucracy in the four countries, exacerbated by the absence of efficient monitoring mechanisms for civil servants’ conduct. More specifically, the persistence of poverty in Lebanon and Yemen (the latter being the poorest and most corrupt country across the MENA region) provided an extensive opportunity for higher petty corruption to take place. Looking at the four cases, this variable shows a causal relationship with corruption. Hypothesis 9 The higher the literacy rate, the lower the levels of corruption Literacy rates were high across all the cases, reaching 99% in Jordan, 98% in Lebanon, 92% in Syria, and 76% in Yemen. The quality of education, however, was modest. The poor quality of education intensified ignorance among the masses, generating societies that can accept corrupt behavior to satisfy their needs. The lack of adequate levels of awareness led to the absence of basic knowledge of civil rights, lessening the population’s critiques of their governments. None of the case studies shows a direct relationship between literacy rates and corruption. Throughout the analysis, it has been clear that the quality of education is a valid variable to explain corruption levels in the countries under study. Jordan, which ranks better than the rest of the countries regarding corruption levels, has good education systems in place, offering quality basic and higher education for all citizens. The

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other countries demonstrate that many aspects of education were of poor quality or were not accessible to all members of society, negatively affecting corruption levels in these countries. Lebanon, Syria, and Yemen saw widespread petty corruption among their populations. A comparison of the four countries’ literacy rates relative to their corruption levels shows that there might be a causal relationship between the two variables. By and large, it can be said that the lack of proper education intensifies the chance of petty corruption spreading among the general population. Hypothesis 10 The more women are empowered, the lower the levels of corruption World Bank data on the percentage of women in the labor force and in the parliaments of the four countries during the years under study show that women were deprived of many their social and political rights with very low percentages on both indicators. More specifically, there is a lack of gender and social equality across the four countries; women are not active in the political scene compared to men. There is, however, no obvious causal relationship between women’s empowerment and corruption in the Mashreq region and Yemen. Yet social inequality and discrimination against some groups in Lebanon and Syria are strong causes of corruption, with favoritism and nepotism main features of both societies, hindering social equality among the populations. To sum up, the diverse political contexts of the four regimes manifested corruption through tight political practices and the complete hegemony over the political system by ruling elites, leading to very high levels of corruption, especially in Lebanon, Syria, and Yemen. The ruling elites deliberately managed the economic sectors, pursuing their own personal interests. The lack of efficient structures and monitoring systems triggered the spread of petty corruption at the lower levels of the administration and at the same time allowed the elite to manage the economy unsupervised. Fragile economic institutions and poorly performing administrations in the region caused grand and petty corruption to become rooted. These countries also experienced relatively modest standards of living, poor education systems, and low wages, causing higher corruption levels (except in Jordan). The pronounced social inequality among the populations squandered civil rights within these countries, deepening preferential treatment and depriving some groups of proper integration in their respective societies. This indicates the presence of favoritism and nepotism, with obvious inequality in services and rights in their respective

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countries. In Jordan, Palestinian and Iraqi immigrants were discriminated against. In Lebanon, polarization of sectarian groups was prevalent in everyday life. In Syria, the minority Shi’a rule versus the Sunni Muslim majority population deprived the people of many benefits. In Yemen, regional tribes from North and South and corresponding loyalties have directed politics and the distribution of resources.11 The political variables as a group (rule of law, political rights, freedom of the press) show an obvious negative relationship with corruption in the Mashreq region and Yemen. Two of the economic variables (quality of regulation and economic openness) show a clear negative relationship with corruption across the four countries. As for the development variables (literacy rate, poverty rate, income inequality, and women’s empowerment), poverty and income inequality show a positive relationship with the intensity of corruption among the four countries. Looking at the unique features that have deepened corruption in each country, in Jordan the king’s ‘divine’ authority, traced back to the Prophet Muhammed, and his wide uncontested authority relying on the Hashemite family’s rule (according to the constitution), cannot be challenged in any way; the country’s slogan is “God, the nation, the king”. This caused more political corruption to take place, without being questioned. The democratic features in the Lebanese political system were hindered by entrenched loyalties in the sectarian political structure determining political leadership, the polarization of certain sects, the long civil war, and the integration of militia leaders within the political system. This nexus caused high levels of corruption in the country. The minority Alawite rule in Syria through the strong grip on power in the hands of the Ba’th party, backed by martial law and the presence of the military in the domestic political process, squandered any political input from the public to the decision-making process, resulting in an unaccountable political regime where absolute power was invested in the president, his party and the military, causing political corruption to be rooted in the system. The unification of Yemen in 1990 created a system based on the central authority of Saleh, who consolidated it with support from the ruling party, the military, and the regional tribes, disarming any challenges to his regime. The president enjoyed supreme power in the country, together with his supporting circles who deepened corrupt practices.

11 See the individual case studies for further details.

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In a nutshell, the four countries had strong elites in control of the political and economic scenes, allowing less participation in decision making and impairing many civil rights and freedoms. They were unable to develop their economies in such a way as to allow economic growth, competition, and trade openness, and they did not integrate fully into global markets, having fragile administrations, dysfunctional economic institutions, and restrictions on investment and trade. The rigid political scene and poor economic structures led to higher poverty rates and the absence of a good quality of life for their peoples. The abuse of resources, and poor abidance by the rule of law, with elites unaccountable to the people, intensified the petty and grand corruption which were widespread in the four countries.

References Agrast, M., Botero, J., & Ponce, A. (2011). WJP Rule of Law Index 2011. Washington, DC: The World Justice Project. Al-Awamleh, R. A. A. K. (2013). The Participation of Political Parties In Jordanian Parliamentary Election in the Period 1989–2010 (Doctoral dissertation). University of Wales Trinity Saint David. Al-Sheikh, A., & Hamada, A. (2010). Corruption in Syria: Causes. Syrian Economic Forum: Effects and Anti-Corruption Strategies. Alissa, S. (2007, July). Rethinking Economic Reform in Jordan: Confronting Socioeconomic Realities. Washington: Carnegie Middle East Center. No. (4). https://carnegieendowment.org/files/cmec4_alissa_jordan_final. pdf. Accessed April, 3 2020. Alkebsi, A., & Boucek, C. (2010, September 30). Corruption in Yemen: Screening of Destructive Beast. Carnegie Endowment for International Peace, Washington, DC. Al-Zwaini, L. (2012). The Rule of Law in Yemen—Prospects and Challenges. The Hague: HiiL Rule of Law Quick Scan Series. Bertelsmann Stiftung (BTI). (2010). Jordan Country Report. Gütersloh: Bertelsmann Stiftung, 2009. Bertelsmann Stiftung (BTI). (2012). Jordan Country Report. Gütersloh: Bertelsmann Stiftung, 2011. Bertelsmann Stiftung (BTI). (2012). Lebanon Country Report. Gütersloh: Bertelsmann Stiftung, 2011 Bertelsmann Stiftung (BTI). (2010). Syria Country Report. Gütersloh: Bertelsmann Stiftung, 2009. Bertelsmann Stiftung (BTI). (2012). Syria Country Report. Gütersloh: Bertelsmann Stiftung, 2011.

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Bertelsmann Stiftung. BTI (2010). Yemen Country Report. Gütersloh: Bertelsmann Stiftung, 2009. Borshchevskaya, A. (2010). Sponsored Corruption and Neglected Reform in Syria. Middle East Quarterly, 17 (3), 41–50. Doran, M. S., & Shaikh, S. (2011). Syria: The Ghosts of Hama. In K. M. Pollack, D. L. Byman, A. Al-Turk, P. K. Baev, M. S. Doran, & K. Elgindy (Eds.), The Arab Awakening: America and the Transformation of the Middle East. Washington, DC: Brookings Institution Press. El Laithy, H., & Abu-Ismail, K. (2005). Poverty in Syria 1996–2004: Diagnosis and Pro-Poverty Considerations. New York: United Nations Development Programme. GAN Integrity. (2016). Yemen Corruption Report: GAN Business AntiCorruption Portal. https://www.ganintegrity.com/portal/country-profiles/ yemen/. Accessed April 4, 2020. Ghadry, F. N. (2005). Syrian Reform: What Lies Beneath. Middle East Quarterly, 12(1) (Winter), 61–70. Hamad, O. (2008). Taming the Beast. Syria Today, (43). Hamid, Hadi. (2009). Jordan: The Myth of the Democratizing Monarchy. In N. Brown & E. Shahin (Eds.), The Struggle over Democracy in the Middle East. New York: Routledge. Haran, V. P. (2016, March). Roots of the Syrian Crisis: Institute of Peace and Conflict Studies. IPCS Special Report 181. Heritage Foundation. (2010). Index of Economic Freedom. Ten Economic Freedoms of Syria. Washington, DC. Hill, G., Salisbury, P., Nothedge, L., & Kinninmont, J. (2013). Yemen: Corruption, Capital Flight and Global Drivers of Conflict. London: A Chatham House Report. Jordan Constitution. (1952). https://www.ilo.org/wcmsp5/groups/public/ —ed_protect/—protrav/—ilo_aids/documents/legaldocument/wcms_1 25862.pdf. Accessed April 3, 2020. Laithy, H., Abu-Ismail, K., & Hamdan, K. (2008). Poverty, Growth and Income Distribution in Lebanon. International Poverty Centre Country Study. No. 13. UNDP. Lebanese Constitution. (1926). https://www.wipo.int/edocs/lexdocs/laws/ en/lb/lb018en.pdf https://www.loc.gov/law/help/lb-religious-political-rig hts/index.php Accessed April 4, 2020. Lebanese Transparency Association. (2011) National Integrity System Study: Lebanon 2011. Transparency International. http://www.transparency-leb anon.org/En/OurPublications/-1/19 Accessed April 3, 2020. Loewe, M., Blume, J., Schönleber, V., Seibert, S., Speer, J., & Voss, C. (2007). The Impact of Favouritism on the Business Climate: A Study on Wasta in Jordan. Deutsches Institut Für Entwicklungspolitik (DIE), Bonn.

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Marshall, S. (2008). Syria and the Global Financial Crisis: Insulated or Isolated? Syrian Studies Association Newsletter, XIV (1). Perthes, V. (2004). Syria Under Bashar al-Asad: Modernization and the Limits of Change (Adelphi Paper 336). Oxford: Oxford University Press. Polity IV: Jordan Country Report. (2010). Political Instability Task Force (PITF). http://www.systemicpeace.org/polity/Jordan2010.pdf. Accessed April 3, 2020. Polity IV: Lebanon Country Report. (2010). Political Instability Task Force (PITF ). http://www.systemicpeace.org/polity/Lebanon2010.pdf. Accessed April 3, 2020. Polity IV: Syria Country Report. (2010). Political Instability Task Force (PITF ). http://www.systemicpeace.org/polity/Syria2010.pdf. Accessed April 3, 2020. Polity IV: Yemen Country Report. (2010). Political Instability Task Force (PITF ). http://www.systemicpeace.org/polity/Yemen2010.pdf. Accessed April 3, 2020. Raphaeli, N. (2007). Syria’s Fragile Economy. Middle East Review of International Affairs, 11(2), 34–51. https://pdfs.semanticscholar.org/66ba/55e2a6 4a3e24cf69eee80a2651c5965a2a0f.pdf. Accessed April 3, 2020. Rigby, A. (2000). Lebanon: Patterns of Confessional Politics. Parliamentary Affairs. A Journal of Comparative Politics, 53(1), 169–190. Robinson, G. E., Wilcox, O., Carpenter, S., & Al-Iryani, A. G. (2006). Yemen Corruption Assessment. USAID Report. Shaikh, S. (2011). Jordan: An Imperfect State. In K. M. Pollack, D. L. Byman, A. Al-Turk, P. K. Baev, M. S. Doran & K. Elgindy (Eds.), The Arab Awakening: America and the Transformation of the Middle East. Washington, DC: Brookings Institution Press. Sharqieh, I. (2011). Yemen: The Search for Stability and Development. In K. M. Pollack, D. L. Byman, A. Al-Turk, P. K. Baev, M. S. Doran & K. Elgindy (Eds.), The Arab Awakening: America and the Transformation of the Middle East. Washington, DC: Brookings Institution Press. Sidani, Y., Zbib, I., Ahmed, Z., & Moussawer, T. (2006). Ethical Awareness in Lebanon: Promoting or Hindering Business Development? World Review of Entrepreneurship, Management and Sustainable Development, 2(3), 258–269. Transparency International. (2011). Global Corruption Barometer. http://www. transparency.org/gcb201011. Accessed April 3, 2020. Transparency International (TI). (2016). People and Corruption: Middle East & North Africa Survey 2016. UNDP. (2004). Arab Human Development Report 2004: Towards Freedom in the Arab World. UNDP Regional Bureau for Arab States. http://hdr.undp.org/ sites/default/files/rbas_ahdr2004_en.pdf Accessed April 4, 2020. U.S. Department of State. (2015). Human Rights Practices Report: Yemen.

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Wickberg, S. (2012). Overview of Corruption and anti-corruption in Lebanon. U4 Anti-Corruption Resource Center. Transparency International. https://www.u4.no/publications/overview-of-corruption-and-anticorruption-in-lebanon.pdf. Accessed April 4, 2020. Yemen Constitution. (1994). http://www.wipo.int/wipolex/en/details.jsp?id= 9622. Accessed April 3, 2020.

Further Reading Day, S. W. (2012). Regionalism and Rebellion in Yemen: A Troubled National Union. Cambridge: Cambridge University Press. Dresch, P. (2000). A History of Modern Yemen. Cambridge: Cambridge University Press. Halliday, F. (2002). Revolution and Foreign Policy: The Case of South Yemen 1967−1987 . Cambridge: Cambridge University Press. Library of Congress, Federal Research Division, Country Studies. https://www. loc.gov/rr/frd/cs/profiles.html. Accessed April 3, 2020. Sharp, J. M. (2011, June 8). Yemen: Background and U.S. Relations. Congressional Research Service. www.fas.org/sgp/crs/mideast/RL34170.pdf. Accessed April 3, 2020. Syria, U.S. Central Intelligence Agency, The World Factbook (Washington) https://www.cia.gov/library/publications/resources/the-world-factbook/ geos/sy.html. Accessed April 3, 2020.

CHAPTER 9

Corruption in the MENA Region: What are the Roots?

In order to conduct a systematic cross-national comparison across the MENA region countries, this chapter builds on the analysis of the causes of corruption in the fifteen countries (Chapters 6, 7, and 8) and the literature review on the causes of corruption (Chapter 3). It is worth emphasizing the political, economic, and social disparities between the three sub-regions. The structured focused comparison method has been employed to enable a scheme for analyzing the fifteen countries and facilitate a systematic comparison of their causes of corruption. The first section of this chapter addresses each of the ten hypotheses across the MENA region countries, the second section groups the hypotheses to analyze how they might intermingle or relate to each other as causes, catalysts, or triggers of corruption, and the third section highlights exclusive causes of corruption in some individual countries.

1

Comparing Across Each Hypothesis

The V-Dem public-sector corruption index is used, together with the CPI, to give an overview of the status of corruption in the countries under study. There were no great changes in the public-sector corruption scores for most of the countries during the period of study, and most of the other

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indicators also showed only minor variation from 1999 to 2010.1 The following analysis therefore focuses on addressing the hypotheses directly in relation to the countries, rather than referring to the changes in each country’s scores across the indicators, as this has already been discussed in the case-study chapters. 1.1

Regime Characteristics

Polity IV was used to reflect on the general features of the regime in the fifteen countries, all of which scored relatively low (except Lebanon). Qatar and UAE, which in theory are the least corrupt countries in the MENA region—according to the Corruption Perception Index—were categorized as ‘autocracies’ according to Polity IV, scoring −10 and − 8 respectively, whereas Libya and Yemen, the most corrupt in the region, were categorized as ‘closed autocracy’ and ‘autocracy’ in Polity IV, scoring −7 and −2 respectively. The other countries did not perform well with regard to their political settings, indicating that democracy was absent among all countries in the region except Lebanon (scoring between 5 and 7) during the years under study. It is thus not possible to assess the impact of being a democratic state on the level of corruption, since almost all the countries under study were illiberal democracies. All the countries under study witnessed authoritarian regimes with restricted political competition and mass participation during the period under study. Looking at the regime characteristics hypotheses, there are three interrelated variables: the rule of law, political rights, and press freedom. The following section compares each variable across the fifteen countries in the MENA region. Hypothesis 1 The higher the respect for the rule of law, the lower the levels of corruption in the country Two V-Dem indices were used in the analysis of this hypothesis: the equality of citizens before the law, and judicial constraints on the executive authority. Kuwait, Qatar, Morocco, and Jordan performed best on both indicators, scoring relatively above 0.50, while Saudi Arabia, Syria, Yemen, and Libya scored rather below 0.50 on both indicators. Tunisia, 1 The longitudinal analysis was intended to assist in analyzing how far corruption can relate to the different variables over the years, in order to gain a better understanding of the phenomenon in each country.

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Algeria, Lebanon, and Oman performed poorly on the judicial constraints on the executive index, scoring below 0.50 but have different scores for abidance by the rule of law in their societies. None of the fifteen cases scored close to 1 on both indices, demonstrating the bias of the judicial authority and its inability to hold the executives accountable. This is due to the centralized authorities within the MENA region, where monarchs and presidents enjoyed unconstrained discretionary powers, in many cases nominating judges, which impeded judicial impartiality. Nevertheless, the least corrupt countries in the region performed relatively better than the rest on the rule of law indices, while the most corrupt countries scored quite low on both indices. In this regard, Qatar performed well on the rule of law index, and though UAE and Bahrain were missing from the V-Dem indices, interviewees reported that the rule of law is strictly followed and highly respected in most cases. In contrast, the most corrupt among the case studies, Yemen and Libya, scored very low on both indices. Regarding the rest of the countries, the Gulf countries (excluding Saudi Arabia) and Jordan had rather higher scores than the rest of the case studies, which is relatively in line with their variations in corruption levels. The arguments of Ades and Di Tella (1996) and Sung (2002) on the existence of a negative relationship between the independence of the judicial authority and the levels of corruption are in line with this hypothesis, which supports the notion that a negative relationship exists between the rule of law and corruption, where the higher the respect for the rule of law, the lower the levels of corruption. Hypothesis 2 The higher the respect for political rights, the lower the levels of corruption The Freedom House index was used to assist in analyzing this hypothesis, where all countries scored between 5 and 7 on the political rights index, except Kuwait which scored 4.2 The lack of variation among the case studies reflects the restricted political freedoms and constrained political participation across the region. Political parties were banned in the Gulf region countries and faced limited freedoms in North Africa, the Mashreq and Yemen. The powers of the rulers were never challenged or contested during the period of study. Parliamentary elections produced 2 Kuwait scored better due to the existence of a parliament constantly challenging the executive’s power (please refer to the case for further details).

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profiles loyal to the elite in the parliaments, and the chances of opposition parties winning were negligible. Moreover, there were clear legal restrictions on rights of association and assembly in most of the countries, and the civil society organizations that did exist were meaningless, being unable to influence the agendas of the ruling elite or even address certain issues. Consequently, this variable does not reflect robust findings due to the similar scores across the case studies. In other words, it is not possible to assess the relationship between political rights and corruption, due to the lack of variation in political rights data among the countries. Although Treisman (2007) found that political rights are negatively related to levels of corruption, the author did not arrive at such a clear relationship. However, the non-democratic features of these regimes, and the strong restrictions placed by their governments on political competition and participation indicate that these settings encouraged grand corruption to flourish, since the political elites managed to run the countries’ affairs without being accountable or encountering any challenges to their extensive powers. This conclusion relates directly to the argument made by De Mesquita et al. (2002), who contended that political elites in non-democracies sustain power and abuse national resources in their personal interest, leading to higher levels of corruption, unlike democracies in which politicians compete and strive to gain the people’s trust when they run for re-election. Hypothesis 3 The higher the freedom of the press, the lower the levels of corruption According to the Reporters without Borders Press Freedom index, Lebanon, Kuwait, Qatar, UAE, and Bahrain ranked better than most of the countries in the region during the period of study. Meanwhile, Saudi Arabia, Syria, Yemen, and Libya ranked worst. The other cases (Egypt, Tunisia, Morocco, Algeria, Jordan, and Oman) fall in the middle, with varying scores, which is comparatively in line with their levels of corruption on the CPI. Lebanon is an exception, witnessing high corruption levels but good scores for freedom of the press. The overall view within each country demonstrates the robustness of the hypothesis: the higher the freedom of the press, the lower the levels of corruption among most of the countries in the MENA region. Freedom of opinion was strongly challenged across the region, some issues were regarded as taboo and off limits for open debate, censorship was rife, and criticism of the ruling elites was not allowed. Journalists in many of the

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countries faced imprisonment and harassment by the government and the media were cautious about addressing sensitive topics. In this respect, the MENA governments deprived their people of this right, giving the elites a free hand to run the countries without being criticized or questioned by the media. It is worth highlighting that many of the Gulf region countries scored relatively well on freedom of the press, due to passive publics who lacked interest in political activity and therefore refrained from addressing critical issues, while journalists avoided tackling these matters and getting into trouble. The hypothesis on the existence of a negative relationship between freedom of the press and corruption backs the arguments of Lederman et al. (2001), Sung (2002), and Brunetti and Weder (2003), who argued that a free press has a negative relationship with corruption, in that it presents the corrupt and illegal actions of public officials to the general public, acting as a watchdog over government conduct. 1.2

Economic Status

The different economic statuses and structures of the MENA countries exposed variation in the analysis of these variables, but there were some common features. Three variables are analyzed in each case study: the quality of regulation, economic openness, and natural resource endowments. This section compares each variable across the fifteen countries in the MENA region. Hypothesis 4 The better the quality of regulation, the lower the levels of corruption The business freedom component in the ‘regulatory efficiency’ indicator of the Heritage Foundation Index was used to analyze this variable. The countries showed varying scores, Bahrain and Tunisia maintaining free business environments over the period of study. However, Egypt, Yemen, Syria, and Libya scored relatively low over most of the years, indicating fewer freedoms. The rest of the countries had different scores, and some case studies showed a negative relationship with corruption. The V-Dem state ownership of the economy indicator was used to explain how far the government is in control of economic sectors. This indicator shows strong government intervention in the economies across all the MENA countries (scoring between 0.71 for Libya, the most in control of the economy, and 2.94 for Morocco, the least in control of

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the economy). This has taken the forms of monopolies, oligopolies, and indirect control by the inner circles of the ruling elites. The lack of accurate data precisely measuring the quality of regulation prevented a robust conclusion on this hypothesis. But the absence of efficient economic institutions, vague policies and procedures, and the lack of transparency in economic regulation across many of the MENA region countries indicate that poorly functioning economic structures provided the opportunity for corrupt practices to take place. Moreover, corruption opportunities increased due to the regimes’ increasing control over most of the sectors in the economy, accompanied by a reduction of competitiveness and transparency. These arguments support Lambsdorff (1999), who indicated that poorly functioning institutions cause corruption. Lambsdorff and Cornelius (2000), and Gerring and Thacker (2005) contended that there is a negative relationship between the quality of regulation and corruption, with vague government regulations causing more corruption. Moreover, Shleifer and Vishny (1993), Ades and Di Tella (1997), and Goel and Nelson (2010) argued that more corruption opportunities are created when the government plays a bigger role in economic activities, concluding that efficient institutions and good regulatory structures cause less corruption to take place. The author’s analysis—the better the quality of regulation, the less corruption is witnessed—reached similar conclusions, in line with scholars who found that fragile institutions, low quality of regulation, and a bigger role for the government in the economy do have causal relationships with corruption. Hypothesis 5 The greater the economic openness, the lower the levels of corruption This variable was explored using two indicators: the trade freedom component within the ‘open market’ indicator of the Heritage Foundation’s Index of Economic Freedom; and membership of the country in the WTO, which shows how long the country has been integrated in the global trading community. The Gulf region generally scored well on trade freedom due to their oil richness which constituted the main trading activity. Tunisia, Egypt, Morocco, and Jordan scored low on this indicator, while Syria and Libya scored extremely low (categorized as repressed for many years). These scores are comparatively in line with the corruption levels across most of the countries in the MENA region. As for

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WTO membership, Algeria, Syria, Libya, Yemen,3 and Lebanon have not joined the organization, which corresponds with their being among the worst performing on the CPI across the MENA region. Those countries have had rigid trading systems, with barriers to investment and inefficient institutions. Therefore, it is clear that the hypothesis on trade openness demonstrates a negative relationship with corruption in many of the case studies. This hypothesis supports the contentions of Henderson (1999), Treisman (1999), and Paldam (2002), who determined a negative relationship between economic openness and corruption. Moreover, it supports the findings of Sachs and Warner (1995), Ades and Di Tella (1997, 1999), Leite and Weidmann (1999), and Treisman (2000), who argued that the more years the country has been open to trade, the less corruption is witnessed. Also, Sandholtz and Gray (2003) indicated that less corruption takes place with more involvement in international and regional organizations, and a longer duration of this integration. This specific finding is in line with the analysis across the MENA region countries. Hypothesis 6 The richer the country is in natural resources, the higher the levels of corruption Analysis of this variable, which is based on the percentage of natural resource rents in a given country’s GDP, does not indicate a precise causal relationship with corruption in the region. The data on rents do not offer a clear explanation for the variable, and it has been challenging in light of the lack of information on oil and gas sectors in the six Gulf region countries, Algeria, and Libya, where the industries are managed in high secrecy. Among many of the countries, natural resource revenues were not included in government budget documents. The rest of the cases do not give a precise indication of a causal relationship with corruption. Thus, it has been difficult to assess the relationship between the two variables. Although no direct causal relationship with corruption was demonstrated by this variable, there were other outcomes. The first is that in contrast to the above hypothesis, the Gulf countries (except Saudi Arabia), which are rich in natural resources and enjoy a considerable percentage of the world’s oil and gas reserves, scored better than the rest of the case 3 Yemen became a member in 2014.

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studies on the CPI. This could be due to their higher GDP, small populations who enjoy high GNI per capita, and good institutions that also ensure the welfare of their citizens. The second outcome is that these governments’ full control of the natural resources gave more opportunities for ‘undocumented’ grand corruption to occur. Most of the Gulf countries managed the oil and gas sector through state-owned enterprises, in which the ruling family members hold the most senior positions, administering this sector highly secretly. Ades and Di Tella (1999), Leite and Weidemann (1999), Montinola and Jackman (2002), Kunicova (2002), Treisman (2003), and Lambsdorff (2006) reached the conclusion that richness in natural resources provides more opportunity for corruption to take place through rents. However, the author’s analysis indicates that the richness in natural resources in the Gulf region, Algeria, and Libya enhanced the ‘rentier state’ concept. However, due to lack of precise data, the ideas that the abundance of natural resources, the regimes’ direct control over the oil and gas industries, and the secrecy practiced over management and allocations within them industry increased the chances for grand corruption to take place, can only be debated.4 1.3

Development Status

There are four interrelated variables within the socio-economic context in the countries under study, in which the case studies showed varying results. These four variables are income inequality, poverty rates, literacy rates, and women’s empowerment. The Human Development Index was used to provide a glimpse into the status of the MENA societies. The Gulf countries scored better than the rest of the cases, being classified as highincome countries, whereas Syria and Yemen, the most corrupt, ranked very low on the HDI. This indicates that generally, the better the human development in a given country, the less the levels of corruption. This outcome supports the findings of Damania et al. (2004), Brown et al. (2005), Kunicova and Rose-Ackerman (2005), Lederman et al. (2005), and Serra (2006) who argued that there is a negative relationship between development and corruption.

4 Please refer to the Gulf region case studies, Algeria, and Libya.

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Hypothesis 7 The higher the level of income inequality, the higher the levels of corruption This book relied on the World Bank’s Gini coefficient as an indicator to analyze income inequality in the MENA region countries. Reaching a robust finding on this variable has been difficult, since data is absent for all the oil-rich countries and Lebanon, preventing a systematic comparison over the whole region. Looking at the rest of the countries (Jordan, Tunisia, Egypt, Morocco, Syria, and Yemen), data is available for one or two years and averages 35 for all of them, and these six countries have witnessed relatively high levels of corruption during the years under study. However, expert interviews usefully clarified this variable, indicating obvious income inequality among all the societies, and reflecting the privileges enjoyed by the elites while the general populations were deprived of many benefits. Experts have emphasized the existence of corruption because resources serving the needs of the people were not properly allocated, resulting in either waste or abuse of these resources for the benefit of those in power and their close circles. This implies that income inequality has a positive relationship with corruption. The analysis in the case studies backs the arguments of Gupta et al. (1998), Husted (1999), Swamy et al. (2001), and Amanullah and Eatzaz (2016) that there is a positive relationship between income inequality and corruption. Hypothesis 8 The higher the poverty rate, the higher the levels of corruption Data on poverty rates is missing for the oil-producing countries. However, in some of the case studies this issue was analyzed based on the interviews. The data available for the rest of the countries did not enable strong findings as to the existence of a positive relationship between poverty rates and corruption levels. However, two conclusions can be drawn from considering this variable across the MENA countries. First, the persistence of poverty among some countries (Egypt, Morocco, Lebanon, Libya, and Yemen) has given extensive scope for widespread petty corruption, with Yemen the poorest and most corrupt country in the region. Second, the high-income countries (enjoying high GNI per capita) have

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generally witnessed fewer instances of petty corruption and lower levels of corruption generally.5 Literature on this topic is closely linked to the above results, scholars having tackled this variable through the income levels of the populations. The author’s analysis supports the general conclusions of Braun and Di Tella (2004), Chang and Golden (2004), Kunicova and Rose-Ackerman (2005), and Lederman et al. (2005), who argued that income has a negative relationship with corruption. Also, the case-study analysis supports the argument of Rijckeghem and Weder (2001), who looked at the wages of public servants, contending that low wages trigger illegal acts as ways of increasing the income of those officials. Hypothesis 9 The higher the literacy rate, the lower the levels of corruption Literacy rates are high in the region, reaching an average of 90% among most of the countries. The hypothesis on the existence of a negative relationship between literacy rates and corruption is thus invalid. However, throughout the analysis of the MENA societies, it has been obvious that the quality of education is a valid variable explaining corruption levels. Many of the case studies suggested a negative relationship between the quality of education and the levels of corruption. Qatar, UAE, Kuwait, Bahrain, Jordan, and Tunisia—which rank better than the rest of the countries regarding corruption levels—have good education systems in place, offering quality basic and higher education for all citizens, while analysis of the remaining countries revealed that many aspects of education were inadequate and/or education was not accessible to all members of society, negatively affecting corruption levels in these countries. The quality of education reflects less petty corruption among welleducated societies, since education generally raises the critical ability of the individual, offering the basis for a rational way of thinking. Countries like Oman, Saudi Arabia, Morocco, Egypt, Algeria, Lebanon, Syria, Libya, and Yemen, on the other hand, saw widespread petty corruption among their people, with a lack of basic knowledge about corrupt practices and widespread acceptance of such practices. This analysis supports 5 Qatar, UAE, Kuwait, Bahrain, and Oman are the least corrupt countries in the MENA region and have the highest GNI per capita respectively (World Bank data). According to the expert interviews, these countries have shown less or no existence of petty corruption, nor has this been reported in the literature.

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findings discussed by Damania et al. (2004), Brown et al. (2005), Kunicova and Rose-Ackerman (2005), and Lederman et al. (2005) on the existence of a negative relationship between corruption and development, where education is a main pillar of development. Hypothesis 10 The more women are empowered, the lower the levels of corruption The percentages of women in the labor force and in parliament were used as indicators of women’s empowerment in the fifteen countries. Throughout the case-study analysis, it has been clear that women have not gained many social and political rights in the respective countries. Tunisia was the only exception, where women are highly recognized in the constitution, although on the ground they still lacked political powers compared to men. The similarity across the MENA region countries regarding the status of women made it difficult to make comparison across the fifteen countries. Nevertheless, this gives a general indication that within these countries, the fragile role of women, especially in politics, implied the absence of impartiality, and allowed illegalities to take place, where there was clear gender inequality. Moreover, in many of the countries, discrimination against certain groups within the societies (minorities, religious sects, indigenous groups, political groups, immigrants, and refugees) indicated a lack of social equality, which gave more scope for preferential treatment and nepotism to occur, based on personal affiliations in the countries under study.6 These arguments on women’s empowerment do not directly support the studies of Swamy et al. (2001) and Dollar et al. (1999), who found a negative relationship between women’s empowerment and corruption. However, the author’s outcomes are in line with, first, Rizzo et al. (2007) who addressed the issue of women’s empowerment from the perspective of the traditional male-dominated societies in the Arab world, which delays the full empowerment of women, and second, scholars like Joseph (1996), Duflo (2012), and Jayachandran (2014), who tackled the patriarchal cultural theme in the MENA region which led to gender disparity in the societies. Despite the lack of variance across the case studies regarding this hypothesis, the analysis shows that gender and social inequality were 6 This was mentioned in the literature, confirmed during all the expert interviews, and observed by the researcher during visits to some of the countries under study.

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catalysts for corrupt practices to expand among the MENA societies, specifically obvious in favoritism and nepotism due to kinships and different affiliations across the countries. This supports the early writings of Lewis (1961), who identified the MENA region systems as patriarchal ones that favored male-dominant groups over generally any other persons, including women and males from minority groups or other races or ethnicities. These features combined underlie daily life in many of the MENA societies, echoing the bond that feeds the gender gap, dichotomies, and exclusion within the societies.

2

Comparing Across the Ten Hypotheses

Grouping the ten political, economic, and societal variables helps to achieve an overall understanding of the causes of corruption across the fifteen cases, where political and socio-economic circumstances are in a nexus impacting the intensity of corruption. The regimes exercised huge control over both the political scenes and economic activities. Generally, the MENA countries have seen limitations on political participation, competitive elections, and freedom of expression. The Gulf countries had the most constrained political systems, with no political competition or political parties, while North Africa, the Mashreq, and Yemen had a small margin of political freedoms, and elections have taken place more often. Socio-economic development has varied across the MENA region, along with the quality of regulation, openness to trade, and natural resource endowments. The governments have played big roles in the economies, managing the main sectors through monopolies and oligopolies. This has resulted in less openness and less integration in international markets across most of the MENA region countries. All the case studies have shown high public-sector corruption, according to the V-Dem index on public-sector corruption (see country data annexes). Looking first at the causal relationship between political dimensions and corruption, it is obvious that the MENA countries are nondemocratic regimes. The Gulf region countries (excluding Saudi Arabia) and Jordan ranked better with regard to corruption levels, rule of law, and press freedom. Yet, this does not indicate that this group of countries is more liberal than the rest of the countries—which is clearly reflected in the Polity IV reports and the political rights scores averaging 6 for most of these countries—but these lower levels of corruption were mainly

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due to the better functioning political institutions and widespread public acceptance of the ruling monarchs. This was accompanied by negligible interest among the general population in active engagement in the political process, which may explain why these countries in particular scored better on the other two indicators, equality of citizens before the law and press freedom. Regarding the economic hypotheses, all the regimes showed clear hegemony by their governments over the main economic activities, accompanied by a lack of proper regulation across many of the countries, reflecting opportunities for grand corruption especially in the procurement process, as noted in the GAN business anti-corruption country reports. There was a lack of economic openness among the most corrupt countries in the region, demonstrating that the inability to integrate and abide by international codes of conduct for trade provided more opportunities for corruption, obstructing investment and economic freedom. Abundance of natural resources did not indicate a strong causal relationship with corruption. The author’s analysis therefore concludes that quality of regulation is the most robust variable among the economic ones, showing a negative relationship with corruption. As for the development variables, it is clear that literacy rates and women’s empowerment showed no direct causal relationship with corruption, while income inequality and poverty rates reflected a positive causal relationship with corruption. Countries enjoying high levels of human development, with high income levels and good quality of education, generally witnessed lower levels of corruption across the MENA region, whereas countries suffering from low standards of living, poor educational systems, and low wages showed high corruption levels, together with the manifestation of petty corruption within their societies. Poverty rates, income inequality, and the quality of education are therefore clear triggers for different forms of corruption to take place within the MENA societies. Consequently, though distinct settings in each of the countries caused dissimilar manifestations of corruption, some common features showed a strong impact on the intensity of corruption across all the case studies. It is clear that the sustained powers of the ruling elites in the MENA region have presented the main triggers of corruption across the fifteen countries for several interrelated reasons. These are the lack of accountability of the ruling elites, their ability to influence judicial impartiality, vague and often biased economic regulation, strong government presence

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in the economic sector, the hegemony of the ruling elites (royal family members, tribes, ruling political parties, loyal clans) over the political and economic scenes by dominating high-ranking positions, restricted political competition, reduced political participation and input from the general population, limited civil liberties and powerless civil societies, and severe censorship of media content. These features combined have given further opportunities for grand corruption to occur, along with the strong presence of nepotism and favoritism in political and economic settings across the MENA region. This outcome supports the explanation of corruption offered by the principal–agent equation of Klitgaard (1988), which views the problem of corruption as lying in the concentration of powers, discretion, and weak accountability. The most robust causes of grand corruption across the countries have been the low respect for the rule of law (especially the legal constraints on the executive powers), limited openness to trade and investment, government control of the main economic activities, and non-abidance by regulations in many instances (poor quality of regulation in some countries), leading to widespread nepotism and preferential treatment in the market. Moreover, the people of the fifteen countries have also witnessed varying qualities of life, the Gulf countries offering their citizens luxurious lives with very high incomes and welfare facilities for the general public, while the populations of North African and Mashreq countries and Yemen have experienced less privileged standards of living, with the absence of basic services. This in turn had a clear impact on the high corruption levels across these countries. Given these arguments, petty corruption increased across most of the North African countries, the Mashreq, and Yemen. Corruption was widespread in Egypt, Morocco, Libya, Jordan, Syria, Lebanon, and Yemen, often regarded as a common and accepted practice due to a nexus of conditions within the societies: fragile bureaucratic structures; unclear policies and regulations; absence of efficient monitoring mechanisms; poor quality education and lack of awareness; low wages; the spread of poverty; and income inequality. These conditions were important catalysts for petty corruption becoming a systematic, accepted and rooted behavior in society. By and large, the author’s analysis of the causes of corruption within the MENA region supports the arguments of Suphachalasai (2005), Kunicova and Rose-Ackerman (2005), and Lederman et al. (2005) who argued that democracy and corruption have a negative relationship. Also,

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the book supports the conclusions offered by Paldam (1999), Gerring and Thacker (2004, 2005), Treisman (2000), Montinola and Jackman (2002), and Sung (2004) who agreed that semi-democratic or autocratic regimes witness higher levels of corruption due to their hold on power for long periods of time. As noted above, the existence of authoritarian regimes hindered basic ideas of competition and participation, resulting in mostly ‘undocumented’ grand corruption. Grand corruption has been evident across the cases, due to the centralization of power invested in a strong executive authority and its ability to tailor laws and regulations that served its interest to maintain the status quo, without facing competition, challenge, or accountability. Therefore, judicial constraints on the executive powers were minimal across all case studies. The author’s analysis reached the conclusion that the rule of law variable reflects the most robust relationship to corruption in the MENA region countries.

3

What Are the Exclusive Causes of Corruption?7

On another level of analysis, and in relation to each country, exclusive variables revealed a clear influence on the intensity of corruption in a number of the case studies. The minority Sunni regime in Bahrain and the minority Shi’a regime in Syria were both primary causes of corruption where the ruling elites maintained discrimination against the majority of their populations, resulting in preferential treatment and the absence of basic political and civil rights for the majority within these societies. Another distinctive variable was observed in Jordan, Saudi Arabia, and Morocco. The kings in these three countries derive their authority from a spiritual authority, descending from God and the Prophet, assuming a religious political status that is uncontested. Since the ruling monarchs assume legitimacy based on a ‘divine’ authority, they succeeded in adding a thick layer of unquestioned legitimacy to the royal families so accountability through the rule of law was very weak. In Egypt, Algeria, and Syria, emergency/martial laws continued for two decades or more, giving much strength to the executive authority, and allowing more scope for them to disregard the rule of law, and restrict political and civil freedoms, by virtue

7 Please refer to the individual case studies for detailed analysis.

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of relying on the emergency statuses of their countries.8 In Tunisia, the lack of press freedom was a main cause of corruption, confirmed during the expert interviews.9 Democracy was wasted in Lebanon and corruption became rooted due to the sectarian structure that determined the political leaders, based on confessional loyalties, along with the long civil war and the integration of militia leaders in the political system. This hindered any democratic practices in the country. In Libya, Qadhafi assumed the role of the ‘revolutionary leader’ who could not be ousted from office, and the Green Book was too vague to be a blueprint for ruling the country. Altogether, this allowed the president to act without being in any way accountable. In Yemen, extreme poverty among the population was the most robust cause of corruption, which was evident in the case-study analysis and reiterated during the expert interviews. In a nutshell, in the process of answering the question of the causes of corruption in the MENA region, the main variables that stood out as impacting the intensity of corruption were the rule of law, quality of regulation, and trade openness. Poverty and income inequality were clear triggers for the spread of petty corruption in many cases. However, natural resources endowments have shown less impact on the levels of corruption in the countries under study. Women’s empowerment did not show robust findings, although the general discrimination against women, minorities, religious sects, indigenous groups, immigrants, nonnationals, opposition parties, and other groups exposed a clear lack of social equality among the population, and favoritism and polarization have obviously occurred in the region. Literacy rates also turned out to have an irrelevant relationship with corruption, but the quality of education suggested a negative causal relationship with corruption. Human development is generally associated with corruption, in that the higher the human development, the lower the levels of corruption.

8 The emergency laws and the abuse of power by the regimes were major triggers of the 2011 uprisings in Egypt and Syria. 9 The lack of freedom of opinion in Tunisia was a trigger for the Jasmine Revolution of 2010.

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CHAPTER 10

Conclusion: Is There a Way Out?

Although the extensive research on the causes of corruption is contradictory and subject to debate, the overall experience of this book, as well as its outcomes, appears worthwhile. Analyzing the causes of corruption in the MENA region has been challenging on many levels, yet enriching. This book has followed the structured, focused comparison method to systematically conduct a cross-national comparison for fifteen Arab countries in the MENA region (Algeria, Bahrain, Egypt, Jordan, Kingdom of Saudi Arabia, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Syria, Tunisia, United Arab Emirates, and Yemen). The causes of corruption were studied on a case-by-case basis, by analyzing ten variables that affect the intensity of corruption in each country over the period from 1999 until 2010. The case-study research method was employed together with the structured, focused comparison method in order to conduct an in-depth empirical analysis of the causes of corruption across the countries. The case studies were divided into three sub-regional groups, and the subsequent analysis of the various independent variables causing corruption in these countries showed varying intensities in the respective countries. The Most Similar Systems Design was employed to locate the variation in the causes of corruption among the countries in both the Gulf region and North Africa. Although these sub-regions share similar political and socio-economic features, their countries experience different levels of corruption (while the Mashreq region countries and Yemen are © The Author(s) 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2_10

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excluded, due to their dissimilarity). This design helped offer a better understanding of the phenomenon of corruption within each country on a longitudinal basis, so that the causes of corruption in the MENA region could be interpreted in a comparative perspective. The extensive literature on the causes of corruption helped to develop an analytical framework, which served as a blueprint for the theoretical basis of this book. This framework used the wide range of studies that have identified different independent variables causing corruption to explore the causal relationship between corruption (as a dependent variable) and other political, economic, and social variables—the independent variables. Ten variables on which scholars strongly agree were identified for analysis in relation to corruption. In-depth explanations of countryspecific conditions enabled the positive/negative causal relationship of each variable with corruption to be explored. The operationalization of the variables used data derived from indicators gathered by different international organizations (World Bank, Transparency International, the United Nations, Varieties of Democracy project, Freedom House, Heritage Foundation, and Reporters without Borders). The analysis is also supported by interviews with 37 experts from the fifteen countries, who provided valuable insights into the causes of corruption in their individual countries that enhanced the whole analysis. The phenomenon of corruption has had a particular presence in the MENA region, and even though the distinctive settings in each of the countries have caused dissimilar manifestations of corruption, some common features have strongly impacted the intensity of corruption across all case studies. The sustained powers of the ruling elites across the MENA region presented the main trigger for corruption exhibiting the following interrelated political, economic, and social dimensions: lack of accountability of the ruling elites; their ability to influence judicial impartiality; restricted political competition; limited political participation; restricted civil liberties with civil societies powerless to impact government policies; severe censorship of media content, meaning no criticism of governments or ruling families was voiced, and some sensitive issues were not allowed to be addressed in public debates; vague and often biased economic regulations; strong government presence in the economic sector; and the hegemony of the regimes over the political and economic arenas through their dominance of high-ranking positions.

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The combination of these features gave corruption the chance to occur among the elites and their clans, along with nepotism and favoritism within political and economic settings across the MENA region. The sustained powers of the leaders and the fact that they could not be challenged or changed, have strengthened illegal practices in these countries, where integrity has been absent. Corruption has therefore been a definite feature within these regimes, the ruling elites and their close circles having exercised complete hegemony over the political systems as well as control of the main economic activities, coupled with unregulated businesses and investments in the economy. Each of the three sub-regional groups (Gulf, North Africa, and Mashreq plus Yemen) demonstrated distinct causes of corruption, owing to the diverse conditions prevailing among the countries within these regions. The Gulf region (except Saudi Arabia) generally performed better than the other two regions on most of the indicators and ranked better on CPI. This does not suggest that they are considered more democratic; their better scores are mostly due to the well-functioning institutions and high standards of living of their societies, and to the passivity of populations unwilling to engage in political processes. The Gulf region included the most constrained political systems in the MENA region, with political parties banned (although political societies exist in Kuwait and Bahrain as alternatives to parties), ruling families in control of politics and the economy (where they hold all the high-level positions), and non-nationals less privileged even though they constituted a large proportion of the populations. In addition, tribal ties and kinships determined the distribution of benefits. The distinct manifestation of corruption among the Gulf region countries indicates a strong incidence of ‘undocumented’ grand corruption and less petty corruption. In contrast, corruption practices were found on all levels in the five North African countries. The leaders enjoyed full hegemony over the political systems, overriding the judicial authority, allowing minimal political participation, banning Islamic opposition groups in most of the countries, holding cosmetic elections, and permitting less freedom of expression. Grand corruption has spread within these regimes, since the ruling elites and their close circles have dominated the vital economic activities, while regulation of the economy has been poor, leading to the abuse of resources for the benefit of those in power. Furthermore, the abundance of oil in Libya and Algeria has been a catalyst for more grand corruption to take place, and both countries ranked as the most corrupt

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on the CPI among the North African countries. Petty corruption was widespread—to a remarkable degree in Egypt, Morocco, and Libya—due to the fragile bureaucratic structures, low-paid civil servants, and unprivileged poorly educated populations whose awareness was limited. With poverty and increasing income inequality, unethical acts spread through the population to the extent that petty corruption became a commonly accepted behavior across these societies. As for the Mashreq region plus Yemen, these four countries also witnessed powerful leaders, along with scant abidance by the rule of law; the elites were never accountable to the people, allowing them less input and interfering with many of their civil rights and freedoms. A clear feature of this group of countries was their inability to achieve economic development, open up their economies, and integrate properly in global markets. Unstable organizations and dysfunctional institutions led to their poor performance on many indicators. These societies (except Jordan) had high poverty rates and only a modest quality of life, since national resources were abused and misallocated, resulting in the prevalence of both petty and grand corruption. The secrecy surrounding revenues in the natural resource-rich Gulf countries encouraged the spread of grand corruption among the ruling elites, while petty corruption has been less prevalent in these societies, where people enjoy a good standard of living. Both types of corruption have been widespread in the other two regions, in which the elites have misused the resources and distributed the benefits according to their own interests, resulting in less privileged populations. The corrupt practices were exacerbated by weak rule of law and fragile institutions in both regions. While the Gulf countries offered their citizens luxurious lives with very high incomes and welfare facilities for the whole population, the people of North Africa, the Mashreq countries, and Yemen had much lower standards of living, and people lacked some basic services. This, in turn, had a clear impact on the higher corruption levels across those two regions, with petty corruption in particular widespread across most of these countries. Acceptance of corruption within these societies is due to a nexus of conditions: dysfunctional bureaucratic structures; unclear policies and regulations; absence of efficient monitoring mechanisms; poor-quality education and lack of awareness; limited civil liberties; low wages; the spread of poverty; and income inequality. These rigid political and economic features were important catalysts for petty corruption to

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become a systematic, accepted behavior rooted in these underprivileged societies, especially in Egypt, Morocco, Libya, Jordan, Syria, Lebanon, and Yemen. To conclude, this book analyzed the political, economic, and societal causes of corruption among fifteen Arab countries in the MENA region. In theory, all countries under study had constitutions that referred to the separation of powers and independent judicial authority. However, in practice, powerful uncontested ruling elites, and lack of checks and balances overshadowed the scene. Limitations on the rule of law resulted in higher levels of corruption in many of these countries, especially as high-level public officials and their clans enjoyed extreme immunity during the period of study. The political causes of corruption were evident in the weakness of the legislative authority in the face of the executive branch, and the poor performance of public institutions that proved incapable of acting independently. Civil society organizations enjoyed only limited freedom of action to work for transparency and good governance, citizens’ active participation in politics was severely curtailed, free and fair elections were absent, freedom of expression was limited, and there were massive restrictions on access to information. As for the economic causes of corruption, the countries that imposed trade barriers, imprecise regulations, and economic constraints witnessed higher levels of corruption. Free from controls, the elites had a free hand to manage the countries’ resources, allowing direct and indirect government monopolies and oligopolies in vital economic sectors. Moreover, the political and economic circumstances across the MENA region countries had a profound impact on the socio-economic conditions of their populations. Petty corruption took root among some of the countries under study due to the nexus of rising poverty rates, income inequality, poor quality of education, and widespread social inequality. As a result, while the general populations had a negligible chance of assuming active roles in their countries’ policymaking processes—being politically passive, ignorant, or restricted—the elites enjoyed extended hegemony over the countries’ political and economic spheres. This created a vicious cycle, and injustice continued to grow across Arab societies at all levels. The independent variables that showed a strong direct causal relationship with corruption are the rule of law, openness to trade, and the quality of regulation. Meanwhile, political rights, press freedom, natural-resource

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endowments, poverty rates, income inequality, and women’s empowerment variously showed direct/indirect causal relationships to corruption within the respective countries. Corruption has been persistent in most countries, and the fight against it has mostly been unsuccessful due to lack of the required notions of good governance. Some basic steps are essential if the root causes of corruption among these countries are to be defeated. Stronger political will is required to enforce anti-corruption action plans, along with clear legal and institutional structures. As culture plays a central role in the fight against corruption, anti-corruption policies tailored to the different societal norms and traditions within each country need to be considered. Another critical point is attention to the ‘sensitive political cultures’ rooted in the local institutions of the different countries when formulating anti-corruption programs. Other dimensions that need to be addressed include weak state institutions characterized by lack of accountability, inefficient monitoring mechanisms, and underpaid public servants, factors which combine to create more opportunities for illegal acts to take place. Hence, to allow for better functioning institutions across the MENA region countries, there should be impartial enforcement of laws, openness in the political and economic scenes, active political participation, meaningful civil society engagement, protection of whistleblowers, free media and access to public information (on all aspects and more specifically on government spending).The quality of education also needs to be improved to enhance people’s concrete awareness of their civil rights and notions of governance. This book has sought to add to the literature addressing the topic in an analytical qualitative comparative perspective, in order to reach viable outcomes on the causes of corruption in the MENA region. Studying corruption in the MENA region is challenging for many reasons, including but not limited to the scarcity of sufficient and reliable data. There is limited access to information on corruption-related topics, and security has been a major consideration throughout the study. Traveling through some countries in the region to gather information, collect data, and conduct interviews was extremely demanding. However, working on this book gave the author the opportunity for a fresh look at issues related to the particularity of corruption in the region, and these were reflected upon within the case studies. It is hoped that this book will encourage further studies, as it presents a profound analysis of a pervasive

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phenomenon in an underexplored region that deserves more attention in the literature. On a general note, while there is a plethora of research on the topic of corruption, more effort is needed to empirically analyze causal relationships if it is to be addressed appropriately. Qualitative empirical research is a helpful tool to tackle distinctive country-specific dimensions of corruption. Previous efforts have focused on general overall ways of fighting corruption in the region, ignoring in-depth examination of the phenomenon within the MENA region, where there are serious challenges, including ineffective anti-corruption strategies and a lack of well-defined approaches to establishing functioning monitoring institutions (independent and strong enough to enforce laws and regulations). Despite the political, economic, and societal similarities within this region, variation is evident within each country in the form of distinctive historical development, political and economic progress, allocation of resources, and special socio-economic conditions. Therefore, when studying corruption in these countries, considerable effort and resources need to be invested in analyzing each context to reflect appropriately on the most suitable approaches to be employed; so far, generalizations and the one-size-fits-all approach have failed to address the phenomenon in the MENA region. In addition, learning from international efforts and having regard to best practices should provide support for advancing the analysis within each of the countries. More case-study research will help to provide a better understanding of the root causes of corruption and its relationship with the distinct features of each society. A number of dimensions need to be taken into account when initiating anti-corruption agendas. It is important for research to focus on the social dimensions that constitute the informal networks of corruption, as the linkage between state bureaucracies and their communities strongly impact levels of corruption in the MENA region in multiple ways. When studying formal institutions, it is also necessary to consider why and how constitutions, laws, and regulations are dysfunctional in many countries in the region and what are the appropriate means to enhance notions of governance in each distinctive setting.

Annexes

Annex 1: Analytical Framework (Operationalization of Variables) Variable General trends Level of corruption

Source

Indicator – Score/Scale/Index meaning (according to the source)

Corruption Perception Index (Transparency International)a

"Measures the perceived levels of public-sector corruption in different countries and territories" Scale of 0 (highly corrupt) to 10 (very clean) + yearly rank for the country To what extent do public-sector employees grant favors in exchange for bribes, kickbacks, or other material inducements, and how often do they steal, embezzle, or misappropriate public funds or other state resources for personal or family use? Scale of 0 (least corrupt) to 1 (most corrupt)

Public Sector Corruption Index (V-Dem)b

Political indicators (regime characteristics) Democracy status Polity IVc

Classification of regime’s characteristics and transitions on following scale: full democracy (10), democracy (6 to 9), open anocracy (1 to 5), closed anocracy (-5 to 0), autocracy (-10 to -6), failed/occupied (continued)

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2

319

320

ANNEXES

(continued) Rule of law

Political rights

Press freedom

Economic indicators Quality of regulation

Equality before the "To what extent are laws transparent law and individual and rigorously enforced and public liberty index (V-Dem) administration impartial, and to what extent do citizens enjoy access to justice, secure property rights, freedom from forced labor, freedom of movement, physical integrity rights, and freedom of religion?" Scale of 0 (worst) to 1 (best) Judicial Constraints “To what extent does the executive on the Executive respect the constitution and comply with Index (V-Dem) court rulings, and to what extent is the judiciary able to act in an independent fashion?” Scale 0 (worst) to 1 (best) Freedom in the World "Measures freedom according to political (Freedom House)d rights. Political rights enable people to participate freely in the political process, including the right to vote freely for distinct alternatives in legitimate elections, compete for public office, join political parties and organizations, and elect representatives who have a decisive impact on public policies and are accountable to electorate." Scale 1 (best) to 7 (worst) Press Freedom "Measures the degree of freedom that Index(Reporters journalists and news organizations enjoy without Borders)e in each country, and the efforts made by the authorities to respect and ensure respect for this freedom" Scale of 0 (best score) to 100 (worst) + yearly rank for the country Economic Freedom Index (Heritage Foundation)f

Regulatory Efficiency > Business Freedom component: "measures the extent to which the regulatory and infrastructure environments constrain the efficient operation of businesses" Scale of 0–100, with 100 indicating the freest business environment (continued)

ANNEXES

321

(continued) State Ownership of Economy (V-Dem)

Economic openness

Natural resources endowments

Economic Freedom Index (Heritage Foundation)

World Trade Organizationg World Bankh

Development indicators Human Human Development development Index (UNDP)i

Country classification

Country classification (World Bank)

“Does the state own or directly control important sectors of the economy?” Scale: 0: “Virtually all valuable capital belongs to the state or is directly controlled by the state. Private property may be officially prohibited” 1: “Most valuable capital either belongs to the state or is directly controlled by the state” 2: “Many sectors of the economy either belong to the state or are directly controlled by the state, but others remain relatively free of direct state control” 3: “Some valuable capital either belongs to the state or is directly controlled by the state, but most remains free of direct state control” 4: “Very little valuable capital belongs to the state or is directly controlled by the state” Open Markets > Trade Freedom component: "composite measure of the extent of tariff and non-tariff barriers that affect imports and exports of goods and services" Scale of 0–100 with 100 indicating best performance Membership of the WTO: Number of years the country has been open to trade Total natural resources rents (% of GDP): "the sum of oil rents, natural gas rents, coal rents (hard and soft), mineral rents and forest rents" "Measures the average achievement in human development in 3 aspects - life expectancy, education and income levels" Categories: Very high, high, medium, and low human development Based on estimates of gross national income (GNI) per capita: Low income, lower-middle income, upper-middle income, or high income (continued)

322

ANNEXES

(continued) Income inequality

World Bank Data World Bank

Poverty rates

World World World World

Literacy rates

Women empowerment

Bank Data Bank Bank Data Bank

World Bank Data World Bank

Based on the GINI index that "measures the extent to which the distribution of income among individuals within a country deviates from a perfectly equal distribution" Scale of 0 perfect equality to 100 perfect inequality "The percentage of the population living below the national poverty line" "Percentage of the population aged 15 to 24 years old who can both read and write a short simple statement on their everyday life" Labor force, female: Percentage of total labor and percentage of women in parliament: "proportion of seats held by women in national parliaments"

a Transparency International, available at: http://www.transparency.org/ (accessed October

2020). Note that a scale of 0 to 10 was used until 2011. In subsequent years the scale ranged from 0 to 100 b V-Dem., Varieties of Democracy, available at: http://v-dem.net/en/ (accessed October 2020) c Polity IV Project, available at: http://www.systemicpeace.org/polity/polity4.htm (accessed October 2020) d Freedom House, Freedom in the World Country Ratings, 1972–2014, available at: http://www.freedomhouse.org/sites/default/files/Country%20Ratings%20and%20Stat us,%201973-2014%20%28FINAL%29.xls; https://freedomhouse.org/countries/freedomworld/scores (accessed October 2020) e Reporters without Borders, Press Freedom Index, available at: http://en.rsf.org/ (accessed August 15, 2018) f Heritage Foundation, The Index of Economic Freedom, available at: http://www.her itage.org/index/ (accessed October 2020) g World Trade Organization, available at: www.wto.org (accessed October 2020) h World Bank, available at: http://data.worldbank.org/country/ (accessedOctober 2020) i UNDP Human Development Index, available at: http://hdr.undp.org/en/countries (accessed October 2020)

Annex 2: Country Data

na

na

na 55 1.90

rank

Regulatory Efficiency

State Ownership of Eco.

32.30 0.80

23.90 0.80

Natural Resources rents %

Human Development

15.3 na

Female % in Labor Force na

15.5

na

na

Literacy Rates %

Women % in Parliament

na

na

Poverty Rates %

Women Empowerment

na

na

Income inequality

Country Classification

75

Trade Freedom

1.94

75

Economic Openness

WTO Membership

na

na

Press Freedom

55

6

Quality of Regulations

0.50

6

Judicial Constraints

0.57

0.55

0.54

Equality before Law

-10

0.48

na

na

2000

Political Rights

Rule of Law

-10

Democracy Status

na 0.48

rank

1999

Public Sector Corruption Index

Level of Corruption (score)

VARIABLES/ YEAR

Qatar 2003

0.48

na

na 0.48

32

5.6

GENERAL TRENDS

2002

QATAR

-10

na

na

6

0.51

0.57

-10

115

35

6

0.52

0.60

55

27.10

77

1.94

55

25.70

73

1.94

na

16.4

na

na

na

0.80

na

17

na

na

na

0.81

na

17.3

95.9

na

na

0.82

DEVELOPMENT INDICATORS

28.40

75

1.94

55

ECONOMIC INDICATORS

na

na

6

0.51

0.57

-10

POLITICAL INDICATORS

0.48

na

na

2001

1.94

76.6

76.6

0.83

32.40

na

16.7

na

na

na

na

15.6

na

na

na

high income country

0.83

29.20

55

90

23

6

0.52

0.59

-10

0.48

32

5.9

2005

member >1996

1.94

55

104

32.5

6

0.52

0.59

-10

0.48

38

5.2

2004

0

15

na

na

na

0.83

30.90

74.6

1.94

60

81

18

6

0.53

0.60

-10

0.48

32

6

2006

0

14.1

99

na

na

0.82

25.40

76.4

1.94

60

79

24

6

0.53

0.60

-10

0.48

32

6

2007

0

12.9

95.6

na

na

0.82

25.80

70.8

1.94

60

74

15.5

6

0.53

0.62

-10

0.48

28

6.5

2008

0

12.21

97.7

na

na

0.82

17.80

81.6

1.94

75.7

94

24

6

0.53

0.62

-10

0.48

22

7

2009

0

12.34

96.8

na

na

0.82

17.80

82.2

1.94

73.7

121

38

6

0.52

0.64

-10

0.48

19

7.7

2010

ANNEXES

323

2002

na

na

na na

37

5.2

2003

-8

na

na

6

na

na

-8

122

37

6

na

na

70 na

70 na

70 na

100

25.75

6

na

na

-8

na

30

6.2

2005

12.70

77 15.60

77

Women Empowerment

11.9 0

Female % in Labor Force

Women % in Parliament

0

11.9

na 0

12.1

na 0

12.2

na

na

0

12.2

na

na

0

12

na

na

0

11.8

95

na

na

na

na na

Literacy Rates %

na

na

0.82 na

na

na

0.81

na

0.81

na

0.8

77 21.90

Poverty Rates %

0.8

18.50

Income inequality

0.79

DEVELOPMENT INDICATORS

14.14

77

high income

0.79

Human Development

18.58

77

Country Classification

11.12

77

77

85 na

137

50.25

6

na

na

-8

na

29

6.1

2004

member > 1996

85 na

ECONOMIC INDICATORS

na

na

6

na

na

-8

POLITICAL INDICATORS

na

na

na

GENERAL TRENDS

2001

UNITED ARAB EMIRATES

Trade Freedom

85 na

na

na

6

na

na

-8

na

na

na

2000

WTO Membership

85 na

Regulatory Efficiency State Ownership of Eco.

Natural Resources rents %

Economic Openness

Quality of Regulations

na

na

Press Freedom

rank

6

na

Judicial Constraints

Political Rights

Rule of Law

-8 na

Democracy Status

Equality before Law

na

Public Sector Corruption Index

na

na

Level of Corruption (score)

rank

1999

VARIABLES/ YEAR

United Arab Emirates

5

11.59

na

na

na

0.82

24.20

75

49 na

79

17.5

6

na

na

-8

na

31

6.2

2006

22.5

11.41

na

na

na

0.82

22.05

75

49.3 na

65

20.25

6

na

na

-8

na

34

5.7

2007

22.5

11.37

na

na

na

0.83

25.15

80.4

48.2 na

69

14.5

6

na

na

-8

na

35

5.9

2008

22.5

11.26

na

na

na

0.82

16.79

80.8

57.4 na

86

21.5

6

na

na

-8

na

30

6.5

2009

22.5

11.37

na

na

na

0.82

20.83

82.8

67.4 na

87

23.75

6

na

na

-8

na

28

6.3

2010

324 ANNEXES

15.8 na

Female % in Labor Force

Women % in Parliament

na

16.9

na

na

Literacy Rates %

Women Empowerment

na na

na

0.7

na

na

2003

na 0.22

26

6.3

-9

na

na

6

0.44

0.63

-8

152

57.75

6

0.46

0.61

35.30

79.4

1.52

70

32.70

75.4

1.52

70

33.20

75.6

1.52

70

ECONOMIC INDICATORS

na

na

6

0.44

0.6

-9

POLITICAL INDICATORS

0.22

na

na

17.5

na

na

na

0.71

na

18

na

na

na

0.72

1.52

70

na

na

6

0.46

0.61

-8

0.20

28

6.3

2005

0.74

37.20

76

0.74

44.70

71.6

member > 2000

1.52

70

na

na

6

0.46

0.61

-8

0.22

29

6.1

2004

0.75

43.40

57.8

1.52

57

na

na

6

0.46

0.63

-8

0.20

39

5.4

2006

0.76

39.90

83.8

1.52

56.6

na

na

6

0.46

0.6

-8

0.20

53

4.7

2007

na

18.5

97.2

na

na

2.4

18.8

na

na

na

2.4

19

na

na

na

2.4

19.05

na

na

na

0

18.9

na

na

na

upper middl e (1999 - 2006) > hi gh (2007 - 2010)

0.73

DEVELOPMENT INDICATORS

81 42.60

79

Poverty Rates %

Trade Freedom

70 1.52

27.60

State Ownership of Eco.

WTO Membership

70 1.52

Regulatory Efficiency

Income inequality

Count ry C lassification

Human Development

Natural Resources rents %

Economic Openness

Quality of Regulations

na

na

na

Press Freedom na

6

rank

0.44

6

Judicial Constraints

0.18

Rule of Law

0.6

-9

Political Rights

0.63

Equality before Law

-9

0.20

0.21

Public Sector Corruption Index

0.22

na na

na

Democracy Status

2002

OMAN GENERAL TRENDS

2001

na

2000

na

na

1999

rank

Level of Corruption (score)

VARIABLES/ YEAR

Oman

0

18.4

97.6

na

na

0.78

39.60

83.6

1.52

55.8

123

32.67

6

0.46

0.6

-8

0.20

41

5.5

2008

0

17.8

na

na

na

0.79

31.90

83.6

1.52

63.3

106

29.5

6

0.46

0.64

-8

0.21

39

5.5

2009

0

16.8

97.7

na

na

0.79

37.10

83.4

1.52

66.9

124

40.25

6

0.46

0.57

-8

0.21

41

5.3

2010

ANNEXES

325

0.78

Human Development

21.12 na

Women % in Parliament

na

Literacy Rates %

Female % in Labor Force

na

Poverty Rates %

Women Empowerment

na

Income inequality

Country Classification

3.2

Trade Freedom

78.4

na

State Ownership of Eco.

WTO Membership

85

Regulatory Efficiency

Natural Resources rents %

Economic Openness

Quality of Regulations

na

rank

7 na

Press Freedom

na

Judicial Constraints

Political Rights

Rule of Law

-9

Democracy Status na

na

Public Sector Corruption Index

Equality before Law

na

na

1999

rank

Level of Corruption (score)

VARIABLES/ YEAR

Bahrain

na na

na

-9

-8

67

23

5

na

na

117

35.1

5

na

na

-7

4.2

75.4

na

85

3.8

76.6

na

85

4.1

69.9

na

85

ECONOMIC INDICATORS

na

na

6

na

na

na

21.38

na

na

na

0.79

na

21.48

97

na

na

0.79

na

21.13

na

na

na

0.8

0.8

4.1

69.9

0.81

5.6

69.9

0.81

6.2

69.9

na

80

111

28

5

na

na

-7

na

36

5.7

2006

0

20.72

na

na

na

0

20.29

na

na

na

0

19.81

na

na

na

2.5

19.88

na

na

na

upper middle (1999 -2000) > high (2001 - 2010)

0.79

na

85

123

38.7

5

na

na

-7

na

36

5.8

2005

member > 1995

na

85

143

52.5

5

na

na

-7

na

34

na

5.8

27

2004

6.1

2003

POLITICAL INDICATORS

na

na

na

GENERAL TRENDS

2002

BAHRAIN 2001

DEVELOPMENT INDICATORS

4.3

77.6

na

85

na

na

7

na

na

-9

na

na

na

2000

2.5

19.92

na

na

na

0.81

5.8

79.6

na

80

118

38

5

na

na

-7

na

46

5

2007

2.5

19.99

na

na

na

0.81

6.7

80.9

na

80

96

21.17

5

na

na

-7

na

43

5.4

2008

2.5

20.1

na

na

na

0.81

5.3

80

na

79.6

119

36.5

6

na

na

-7

na

46

5.1

2009

2.5

20.25

98.1

na

na

0.81

4.8

82.9

na

77.8

144

51.3

6

na

na

-7

na

48

4.9

2010

326 ANNEXES

0

Women % in Parliament

na

Women Empowerment

21.1

Literacy Rates %

Female % in Labor Force

na na

Poverty Rates %

-7

-7

4

0.64

0.73

-7

4

0.64

0.73

1.92

70 1.92

70 1.92

70

na 25.5 31.3 na 78 102 ECONOMIC INDICATORS

4

0.64

0.73

0

21.3

na

na na

0

21.4

na

na na

0.78

0

21.1

na

na na

0.78

0

20.7

na

na na

0.79

0.78

Income inequality

Country Classification

Human Development

Trade Freedom Natural Resources rents %

Economic Openness

85 1.92

35

5.3

0.78

State Ownership of Eco.

na

na

0.40 0.40 0.40 POLITICAL INDICATORS

na

na

78.2 78.6 76.8 80.2 45.30 38.80 23.60 37.40 DEVELOPMENT INDICATORS

Regulatory Efficiency

na na

4

0.64

KUWAIT 2001 2002 2003 GENERAL TRENDS

78 29.60

85 1.92

rank

WTO Membership

na na

Press Freedom

Quality of Regulations

4

0.64

Judicial Constraints

Political Rights

0.73

-7

-7 0.74

Democracy Status

Equality before Law

0.40

0.40

Rule of Law

na

na

na

na

2000

rank Public Sector Corruption Index

1999

Level of Corruption (score)

VARIABLES/ YEAR

Kuwait

70

21.2 85

4

0.64

0.73

-7

0.50

45

4.7

2005

77.8 54.70

0

20.2

na

na na

1.5

19.8

99.7

na na

0.78 0.78 high income country

77 44.10

1.92 1.92 member > 1995

70

31.6 103

4

0.64

0.73

-7

0.50

44

4.6

2004

1.5

19.8

98.5

na na

0.78

77.2 53.60

1.92

71

17 74

4

0.64

0.73

-7

0.50

46

4.8

2006

1.5

19.9

98.4

na na

0.78

77.2 49.80

1.92

70.7

20.1 63

4

0.64

0.73

-7

0.50

60

4.3

2007

3.1

19.9

98.6

na na

0.78

81 54.60

1.92

68.6

12.6 61

4

0.64

0.73

-7

0.50

65

4.3

2008

7.7

20.1

na

na na

0.79

81 37.30

1.92

67.4

15.2 60

4

0.64

0.73

-7

0.50

66

4.1

2009

7.7

20.2

na

na na

0.79

82.5 48.40

1.92

65.8

23.7 87

4

0.64

0.73

-7

0.50

54

4.5

2010

ANNEXES

327

70

39.7 0.74

24.2 0.73

Natural Resources rents %

Human Development

na

Women % in Parliament

na

13.2

95.9

na 13.7

Literacy Rates %

Female % in Labor Force

na na

na na

Income inequality

Poverty Rates %

Women Empowerment

125

62.5

7

0.34

-10

156

71.5

7

0.34

0.17

70

30

63.4

1.27

70

36.1

64.4

1.27

na

13.1

na

na

na

0.74

na

13.1

na

na

na

0.74

-10

1.27

70

159

79.1

7

0.34

0.17

-10

1.27

70

154

66

7

0.34

0.16

0.76

41.7

62.2

0.76

51.7

0.77

51.8

70.4

1.27

51

161

76

7

0.34

0.18

-10

0.65

70

3.3

2006

0

13.4

na

na

na

0

13.8

95.8

na

na

0

14.2

na

na

na

0

14.7

na

na

na

upper middle (1999- 2003) > high (2004 -2010)

0.75

DEVELOPMENT INDICATORS

31.7

61

1.27

70

ECONOMIC INDICATORS

na

na

7

0.34

-10 0.17

0.65

70

3.4

64

59

Country Classification

-10 0.18

0.65

71

3.4

2005

member >2005

1.27

0.65

46

2004

Trade Freedom

State Ownership of Eco.

0.65

na

na

POLITICAL INDICATORS

0.65

na

na

4.5

2003

GENERAL TRENDS

2002

SAUDI ARABIA 2001

WTO Membership

70 1.37

Regulatory Efficiency

59

Economic Opennness

Quality of Regulations

na

na

na

Press Freedom na

7

7

rank

0.34

0.34

Judicial Constraints

0.19

Political Rights

0.17

Equality before Law

-10

-10

Democracy Status

Rule of Law

0.65

0.65

Public Sector Corruption Index

na

na na

rank

2000

1999

na

Level of Corruption (score)

VARIABLES/ YEAR

Saudi Arabia

0

14.3

na

na

na

0.77

48.6

70.4

1.28

53

148

59.75

7

0.35

0.21

-10

0.65

79

3.4

2007

0

14.1

na

na

na

0.78

55.9

76.8

1.28

73

161

61.75

7

0.37

0.22

-10

0.65

80

3.5

2008

0

13.9

na

na

na

0.79

35.5

81.8

1.28

79.6

163

76.5

7

0.37

0.21

-10

0.65

63

4.3

2009

0

14.5

98

na

na

0.8

42.2

82.5

1.29

84.6

157

61.5

7

0.37

0.21

-10

0.65

50

4.7

2010

328 ANNEXES

70

3.29 0.65

1.90 0.64

Human Development

24.6 11.5

11.5

24.8

na

na

Literacy Rates %

Female % in Labor Force

32.4

na

Poverty Rates %

Women % in Parliament

40.81

na

Income inequality

Women Empowerment

128

67.75

6

0.19

-4

149

50.83

6

0.19

0.51

70

70

2.47

2.28

27.4

2.72

11.5

25.1

na

na

na

0.66

11.5

25.5

na

na

na

0.66

11.5

25.8

na

na

na

0.67

70 2.72

2.72

70

147

57.5

6

0.19

0.51

-4

0.86

0.68

2.78

0.68

4.12

30.2

22.8

26.2

94.3

na

na

22.8

26.6

na

23.3

37.73

Lower Middle Income

DEVELOPMENT INDICATORS

2.49

27.2

2.72

152

62.67

6

0.19

0.51

-4

0.86

43

4.9

member - 1995

Natural Resources rents %

Country Classification

-3 0.51

5 39

2005

32.4

38.2

45.2

2.72

70

0.86

39

4.9

2004

Trade Freedom

2.72

na

na

0.86

36

4.8

ECONOMIC INDICATORS

0.19 6

2003

GENERAL TRENDS

POLITICAL INDICATORS 0.51

-3

TUNISIA 2002

WTO Membership

70 2.72

Regulatory Efficiency

State Ownership of Eco. 46.6

Economic Openness

Quality of Regulations

na

na

na

Press Freedom na

6

6

rank

0.19

0.19

Judicial Constraints

Political Rights

Rule of Law

0.51

-3

-3

Democracy Status 0.51

0.86

0.86

Public Sector Corruption Index

Equality before Law

31 0.86

5.3

32

Level of Corruption (score)

5.2

5

2001

34

2000

1999

rank

VARIABLES/ YEAR

Tunisia

22.8

26.6

na

na

na

0.69

4.50

38.6

2.72

80.3

148

53.75

6

0.19

0.52

-4

0.86

51

4.6

2006

22.8

26.6

96.3

na

na

0.7

6.05

71.8

2.72

78.9

145

57

6

0.19

0.51

-4

0.86

61

4.2

2007

22.8

26.6

96.7

na

na

0.7

11.17

71.8

2.72

80.1

143

48.1

7

0.19

0.5

-4

0.86

62

4.4

2008

27.6

26.6

na

na

na

0.71

4.82

53

2.72

81.6

154

61.5

7

0.19

0.51

-4

0.86

65

4.2

2009

27.6

26.6

97.1

15.5

35.81

0.71

5.90

53.5

2.8

80.2

164

72.5

7

0.33

0.47

-4

0.86

59

4.3

2010

ANNEXES

329

State Ownership of Eco.

70

0.53

0.51

Human Development

28.3 0.6

Women % in Parliament

0.6

27.7

na

na

Literacy Rates %

Female % in Labor Force

15.3

Poverty Rates %

Women Empowerment

40.64

na na

Income inequality

Country Classification

0.70

0.69

Natural Resources rents %

2.94

61

Trade Freedom

WTO Membership

70 2.96

Regulatory Efficiency

45

Economic Openness

Quality of Regulations

na

na

na

Press Freedom (score) na

5

5

rank

0.48

0.55

Judicial Constraints

Political Rights

Rule of Law

0.64

-6

-6 0.51

0.80

0.80

Public Sector Corruption Index

Equality before Law

37

45

Democracy Status

4.7

4.1

Level of Corruption (score)

rank

2000

1999

VARIABLES/ YEAR

Morocco

0.48

0.64

-6

0.80

52

3.7

0.80

70

3.3

-6

89

29

5

0.48

0.64

-6

131

39.67

5

0.50

0.64

70

0.59

46

2.94

70

0.35

33.4

2.94

0.6

25.2

na

na

na

0.54

10.8

25

na

na

na

0.55

10.8

26.8

na

na

na

0.56

2.94

70

119

36.17

5

0.54

0.62

-6

0.70

78

3.2

2005

0.56

0.35

34.2

0.57

0.40

28.6

member - 1995

2.94

70

126

43

5

0.50

0.64

-6

0.80

77

3.2

2004

10.8

27.6

70.45

na

na

10.8

27.5

na

na

na

Lower Middle Income

DEVELOPMENT INDICATORS

0.67

61

2.94

70

ECONOMIC INDICATORS

na

na

5

2003

GENERAL TRENDS

2002

MOROCCO

POLITICAL INDICATORS

0.80

na

na

2001

10.8

27.3

na

na

na

0.58

0.74

35.2

2.94

67.8

97

24.83

5

0.54

0.62

-6

0.70

78

3.2

2006

10.5

27.3

na

8.9

40.72

0.58

1.46

61

2.94

74.6

106

33.25

5

0.54

0.62

-6

0.70

72

3.5

2007

10.5

26.9

77.8

na

na

0.59

8.33

62.6

2.94

76.1

122

32.25

5

0.54

0.62

-6

0.70

80

3.5

2008

10.5

26.3

79.4

na

na

0.60

1.88

68

2.94

76.2

127

41

5

0.54

0.61

-6

0.70

89

3.3

2009

10.5

26.6

na

na

na

0.61

2.71

71.2

2.89

76.1

135

47.4

5

0.54

0.66

-6

0.70

85

3.4

2010

330 ANNEXES

State Ownership of Eco.

55

2

Women % in Parliament

2

21.5

na

21.1

na

Women Empowerment

Female % in Labor Force

na

Poverty Rates %

Literacy Rates %

32.76

na 16.7

Income inequality

Country Classification

0.6

Human Development 0.61

6.29

4.59

Natural Resources rents %

2.68 55

Trade Freedom

WTO Membership

55 2.68

Regulatory Efficiency

55.8

Economic Openness

Quality of Regulations

na

na

na

Press Freedom na

6

6

rank

0.54

0.57

Judicial Constraints

0.26

Political Rights

0.26

Equality before Law

-6

-6

Democracy Status

Rule of Law

0.92

0.92

Public Sector Corruption Index

63

3.1

63

3.3

Level of Corruption (score)

2000

rank

1999

VARIABLES/ YEAR

Egypt

0.54

-6

102

34,50

6

0.54

0.27

-6

110

34,25

6

0.54

0.26

55

6.00

55

2.08

55

7.80

57.6

2.08

10.24

57.4

2.08

55

128

43,50

6

0.54

0.27

-6

0.92

77

3.2

2004

2.4

22

na

na

na

0.61

2.4

20.9

na

na

na

0.62

2.4

21

na

na

na

0.62

0.63

13.91

58.2

member - 1995

2.08

55

143

52,00

6

0.54

0.27

-6

0.92

70

3.4

2005

na

2.9

21.2

na

19.6

2

21.4

84.9

na

32.14

6

0.54

0.27

-3

0.92

70

3.3

2006

2

22.1

84.8

na

na

0.64

14.20

57.6

2.08

39.8

133

46,25

Lower Middle Income

0.62

DEVELOPMENT INDICATORS

5.34

47.2

2.68

55

0.92

70

3.3

ECONOMIC INDICATORS

na

na

6

0.92

62

3.4

GENERAL TRENDS

2003

EGYPT 2002

POLITICAL INDICATORS 0.26

-6

0.92

54

3.6

2001

1.8

23.6

na

na

na

0.65

12.98

57.2

2.08

40.9

146

58,00

6

0.54

0.27

-3

0.92

105

2.9

2007

1.8

23.5

na

21.6

30.8

0.65

15.74

66

2.08

60.2

146

50,25

6

0.54

0.27

-3

0.92

115

2.8

2008

1.8

23.4

na

na

na

0.66

8.21

63.4

2.08

64.7

143

51,38

6

0.54

0.27

-3

0.92

111

2.8

2009

12.7

23

87.5

25.2

na

0.67

8.70

74

2.08

65

127

43,33

6

0.54

0.27

-3

0.92

98

3.1

2010

ANNEXES

331

0.67

88

-3

-3

95

31

6

0.20

0.49

-3

108

33

6

0.20

0.49

70 0.67

70 0.67

-3

1.52

70

128

43.5

6

0.20

0.50

1.52

70

129

40.33

6

0.20

0.51

2

0.67

97

2.8

2005

59.6

60 14.06

50.4 16.30

0.68

Women Empowerment

13.3 3.2

Female % in Labor Force

Women % in Parliament

3.4

13.5

na

3.4

13.7

na

6.2

13.9

90.1

6.2

14.2

na

na

6.2

14.6

na

na

na

6.2

14.9

na

na

na

na

0.68

Literacy Rates %

na

na

0.67

54.4 24.39

na

na

na

0.66

55 18.19

na

0.65

DEVELOPMENT INDICATORS

14.12

35.33 na

1.52

74.8

126

40

6

0.19

0.51

2

0.67

84

3.1

2006

1.52

73.7

123

40.5

6

0.18

0.51

2

0.67

99

3

2007

6.2

15.3

91.7

na

na

0.69

26.53

61

7.7

15.8

na

na

na

0.69

25.01

66

Observer - The working party (establsihed 1987) is in accession process since 2014

0.67

70

ECONOMIC INDICATORS

na

na

6

0.20

0.49

0.67

97

2.7

2004

Poverty Rates %

na

0.67

na

na

POLITICAL INDICATORS

0.67

na

na

2.6

2003

Income inequality

0.64

2002

ALGERIA

GENERAL TRENDS

2001

Lower >> Upper Middle Income

0.63

Human Development

15.30

39.6

0.67

70

na

na

6

0.20

0.49

-3

0.67

na

na

2000

Country Classification

9.01

Trade Freedom

54.2

State Ownership of Eco.

WTO Membership

70 0.67

Regulatory Efficiency

Natural Resources rents %

Economic Openness

Quality of Regulations

na

rank

na

Press Freedom

0.20

Judicial Constraints 6

0.48

Equality before Law

-3

0.46

Political Rights

Rule of Law

Democracy Status

Public Sector Corruption Index

na

na

Level of Corruption (score)

rank

1999

VARIABLES/ YEAR

Algeria

7.7

16.2

93.7

na

na

0.70

27.04

68.8

1.52

73.6

121

31.33

6

0.19

0.51

2

0.67

92

3.2

2008

7.7

16.8

na

na

na

0.71

18.95

68.6

1.52

72.5

141

49.56

6

0.18

0.51

2

0.67

111

2.8

2009

7.7

16.9

na

na

na

0.72

19.99

70.7

1.52

71.2

133

47.33

6

0.20

0.50

2

0.67

105

2.9

2010

332 ANNEXES

40

0.72

Human Development

na

Women % in Parliament

na

Literacy Rates % 22.7

na

Female % in Labor Force

na

Income inequality

Poverty Rates %

na

23.3

na

na

na

0.73

30.31

17.09

Natural Resources rents %

Women Empowerment

2.1 0.86

118

0.15

129

72.5

7

0.15

-7

153

60

7

0.08

0.17

0.71

40 0.71

40 0.71

40

ECONOMIC INDICATORS

na

na

-7 0.17

2.5

0.71

40

154

65

7

0.08

0.17

-7

0.86

108

0.71

40

162

88.75

7

0.08

0.17

-7

0.86

117

2.5

2005

0.71

20

152

62.5

7

0.08

0.17

-7

0.86

105

2.7

2006

0.71

20

155

66.5

7

0.08

0.17

-7

0.86

131

2.5

2007

0.71

20

160

61.5

7

0.08

0.17

-7

0.86

126

2.6

2008

49 45.86

42.4 46.33

na

23.7

na

na

na

0.73

na

24.3

na

na

na

0.74

na

24.9

na

na

na

0.74

42.4

53.2

0.75

61.68

na

25.4

99.6

na

na

4.7

25.9

na

na

na

Upper Middle Income

0.74

55.91

DEVELOPMENT INDICATORS

27.00

7.7

26.2

na

na

na

0.75

66.47

34.6

7.7

26.4

na

na

na

0.75

59.33

39.6

7.7

26.5

na

na

na

0.75

61.35

39.6

49

49

Country Classification

0.86

na

na

2004

observer - since 2004 the working party (establsihed 2004) has not met for accession process

0.71

2003

GENERAL TRENDS

Trade Freedom

State Ownership of Eco.

-7 0.17 7

LIBYA 2002

POLITICAL INDICATORS

0.86

na

na

2001

WTO Membership

40 0.71

Regulatory Efficiency

na

49

Economic Openness

Quality of Regulations

na

na

na

Press Freedom

rank

7

0.15

7

0.15

Judicial Constraints

-7 0.17

-7 0.17

0.86

0.86

Equality before Law

na

na

na na

2000

1999

Political Rights

Rule of Law

Democracy Status

Public Sector Corruption Index

rank

Level of Corruption (score)

VARIABLES/ YEAR

Libya

7.7

26.6

na

na

na

0.75

45.78

90

0.71

20

156

64.5

7

0.08

0.17

-7

0.86

130

2.5

2009

7.7

26.7

na

na

na

0.75

54.98

85

0.71

20

160

63.5

7

0.09

0.17

-7

0.86

146

2.2

2010

ANNEXES

333

Women Empowerment

Women % in Parliament

na

Literacy Rates %

0

13.99

na

Female % in Labor Force

na

Income inequality

Poverty Rates %

Country Classification

0.7

Human Development

56.2 0.05

Trade Freedom

WTO Membership

1.82

70

State Ownership of Eco.

Regulatory Efficiency

Natural Resources rents %

Economic Openness

Quality of Regulations

na

rank

na

Press Freedom

0.49

0.72

4

Judicial Constraints

Equality before Law

-2

Political Rights

Rule of Law

Democracy Status

0.27

0

14.24

na

na

na

0.7

0.06

60.6

1.92

70

na

na

4

0.49

0.69

-2

0.36

39

41

Public Sector Corruption Index

4.6

4.4

rank

Level of Corruption (score)

2000

1999

VARIABLES/ YEAR

Jordan

0.49

0.69

-2

2003

0.48

40

4.5

0.48

43

4.6

GENERAL TRENDS

-2

99

33.5

6

0.49

0.69

-2

122

37

5

0.49

0.67

70

0.06

61.4

1.92

70

0.07

47.2

1.92

1.3

13.88

na

na

na

0.71

1.3

14.75

na

na

36.95

0.71

5.5

13.87

99.1

na

na

0.72

2.46

70

96

24

5

0.54

0.67

-2

0.48

37

5.7

2005

0.73

0.07

58

0.73

0.08

62.4

member > 2000

2.46

70

121

39.13

5

0.49

0.67

-2

0.48

37

5.3

2004

5.5

12.91

na

na

na

5.5

14.28

98.9

na

na

Upper Middle Income

DEVELOPMENT INDICATORS

0.07

65.8

1.92

70

ECONOMIC INDICATORS

na

na

5

JORDAN 2002

POLITICAL INDICATORS

0.48

37

4.9

2001

5.5

14.79

na

na

33.86

0.73

0.09

62.2

2.46

56

110

27.5

5

0.54

0.67

-2

0.48

40

5.3

2006

6.4

17.3

98.9

na

na

0.73

0.50

74.2

2.46

54.9

122

40.21

5

0.54

0.67

-2

0.48

53

4.7

2007

6.4

16.95

na

13.3

32.57

0.74

8.25

74.8

2.46

56.3

128

36

5

0.51

0.65

-2

0.48

47

5.1

2008

6.4

17.49

na

na

na

0.73

1.54

78.8

2.46

68.9

112

31.88

6

0.51

0.65

-3

0.48

49

5

2009

10.8

17.56

98.7

14.4

33.66

0.73

1.67

78.8

2.46

65.6

120

37

6

0.55

0.67

-3

0.48

50

4.7

2010

334 ANNEXES

23.3 2.3

Female % in Labor Force 2.3

23.3

na

na

Literacy Rates %

Women % in Parliament

na

na

Women Empowerment

na

na

na

0.002

0.001 na

36.6

Poverty Rates %

Trade Freedom

70 2.99

36.6

State Ownership of Eco.

WTO Membership

70 2.99

Regulatory Efficiency

na

na

6

0.18

0.56

5

0.80

na

na

2000

Income inequality

Country Classification

Human Development

natural Resources rents %

Economic Openness

Quality of Regulations

na

na

Press Freedom

rank

6

0.2

Judicial Constraints

Political Rights

Rule of Law

0.54

Equality before Law

5

0.80

Public Sector Corruption Index

Democracy Status

na

na

1999

rank

Level of Corruption (score)

VARIABLES/ YEAR

Lebanon 2002

2003

LEBANON

0.80

na

na

3 0.80

78

5

56

19.67

6

0.18

0.54

5

106

32.5

6

0.18

0.54

55

0.001

53.4

2.99

55

0.002

46.8

2.99

2.3

22.6

na

na

na

na

2.3

21.9

na

na

na

na

2.3

21.4

na

na

na

na

2.99

55

108

28.25

5

0.18

0.58

5

0.74

83

3.1

2005

0.001

61

0.73

2.3

21.2

na

na

na

4.7

21.3

na

na

na

72.4

2.99

56.7

107

27

5

0.21

0.62

7

0.74

63

3.6

2006

4.7

21.6

na

na

na

0.73

0.002

Upper Middle Income

na

0.001

69

Observer > 2003

2.99

55

87

24.38

6

0.18

0.54

5

0.80

97

2.7

2004

DEVELOPMENT INDICATORS

0.002

57

2.99

70

ECONOMIC INDICATORS

na

na

6

0.18

0.54

5

POLITICAL INDICATORS

0.80

na

na

GENERAL TRENDS

2001

4.7

22

98.7

na

na

0.74

0.001

77.4

2.99

56.6

98

28.75

5

0.21

0.65

7

0.74

99

3

2007

4.7

22.3

na

na

na

0.74

0.002

77.4

2.99

55.6

66

14

5

0.21

0.65

7

0.74

102

3

2008

3.1

22.5

na

na

na

0.75

0.001

80.8

2.99

60

61

15.42

5

0.23

0.64

7

0.74

130

2.5

2009

3.1

22.8

na

na

na

0.75

0.002

80.5

2.99

56.6

78

20.5

5

0.22

0.66

7

0.75

127

2.5

2010

ANNEXES

335

rank

State Ownership of Eco.

55

0.58

0.58

Human Development

10.4

Women % in Parliament

10.4

19.3

na

20.19

na

Women Empowerment

Female % in Labor Force

na

Poverty Rates %

Literacy Rates %

na na

na

Income inequality

Country Classification

24.40

17.30

Natural Resources rents %

1.86

15

Trade Freedom

WTO Membership

55 0.97

Regulatory Efficiency

27.8

Economic Openness

Quality of Regulations

na

na

na

Press Freedom na

7

rank

0.08

7

Judicial Constraints

0.25

0.04

0.18

-9

-9

Equality before Law

0.83

0.81

na na

na na

2000

1999

Political Rights

Rule of Law

Democracy Status

Public Sector Corruption Index

Level of Corruption (score)

VARIABLES/ YEAR

Syria 2002

SYRIA 2003

na

0.83

na 0.83

66

3.4

-7

126

62.82

7

0.08

0.25

-7

155

67.5

7

0.08

0.24

55

55 1.86

10.4

19.7

na

na

na

0.59

1.86

55

155

67.5

7

0.08

0.25

-7

0.83

71

3.4

2004

1.86

55

145

55

7

0.08

0.24

-7

0.83

70

3.4

2005

1.86

58.9

153

63

7

0.08

0.24

-7

0.83

93

2.9

2006

1.86

58.4

154

66

7

0.08

0.24

-7

0.83

138

2.4

2007

20.80

15 23.70

15

10.4

19.3

95.1

na

na

0.59

12

19.1

na

na

na

0.61

15

0.63

25.00

12

18

92.4

30.1

35.77

12

17

na

na

na

Lower Middle Income

0.62

20.40

15

12

16.1

na

na

na

0.64

24.40

54

12

15.7

na

35.2

na

0.65

20.70

54

Syrian Arab Republic's Working Party was established in 2010 - not a member

1.86

DEVELOPMENT INDICATORS

19.30

15

1.86

55

ECONOMIC INDICATORS

na

na

7

0.08

0.25

-7

POLITICAL INDICATORS

0.83

na

na

GENERAL TRENDS

2001

12.4

16.3

na

na

na

0.64

na

54

1.86

53.8

159

59.63

7

0.08

0.24

-7

0.83

147

2.1

2008

12.4

15

na

na

na

0.65

na

54

1.86

61.4

165

78

7

0.08

0.25

-7

0.83

126

2.6

2009

12.4

15.3

na

na

na

0.64

na

54

1.86

59.2

173

91.5

7

0.08

0.25

-7

0.82

127

2.5

2010

336 ANNEXES

rank

55

Women % in Parliament

0.7

23.2

na

Literacy Rates %

Female % in Labor Force

na

Poverty Rates %

Women Empowerment

na

Income inequality

Country Classification

0.43

Human Development

45 24.30

Trade Freedom

WTO Membership

2.35

Regulatory Efficiency

State Ownership of Eco.

Natural Resources rents %

Economic Openness

Quality of Regulations

na

rank

na

Press Freedom

0.20

Judicial Constraints 5

0.21

Equality before Law

-2

0.96

na

na

1999

Political Rights

Rule of Law

Democracy Status

Public Sector Corruption Index

Level of Corruption (score)

VARIABLES/ YEAR

Yemen

0.7

23.5

na

na

na

0.44

2002

YEMEN

0.96

na

na

0.96

88

-2

103

34.75

6

0.20

0.22

-2

136

41.83

5

0.20

0.22

30.50

64.2

2.35

55

28.90

68.6

2.35

55

30.80

70.2

2.35

55

ECONOMIC INDICATORS

na

na

6

0.20

0.22

-2

POLITICAL INDICATORS

0.96

na

na

2.6

2003

GENERAL TRENDS

2001

0.7

23.8

na

na

na

0.45

0.7

24.1

na

na

na

0.45

0.3

24.3

na

na

na

0.46

DEVELOPMENT INDICATORS

38.70

61

2.35

55

na

na

5

0.20

0.21

-2

0.96

na

na

2000

2.35

55

136

46.25

5

0.20

0.22

-2

0.96

103

2.7

2005

59.8

0.47

40.60

0.3

24.5

76.8

na

na

0.3

24.8

na

34.8

35.89

Lower Middle Income

0.47

33.00

70.2

member > 2014

2.35

55

135

48

5

0.20

0.22

-2

0.96

112

2.4

2004

0.3

24.9

na

na

na

0.47

39.10

61.6

2.35

54.9

150

54

5

0.19

0.23

-2

0.96

111

2.6

2006

0.3

25.1

na

na

na

0.48

32.40

66.4

2.35

53.5

143

56.67

5

0.20

0.26

-2

0.96

131

2.5

2007

0.3

25.3

na

na

na

0.48

31.50

66.4

2.35

54.8

155

59

5

0.20

0.24

-2

0.96

141

2.3

2008

0.3

25.4

na

na

na

0.48

19.20

76.2

2.35

74.9

167

83.38

6

0.19

0.25

-2

0.96

154

2.1

2009

0.3

25.6

na

na

na

0.49

21.20

76.1

2.35

74.4

170

82.13

6

0.19

0.24

-2

0.96

146

2.2

2010

ANNEXES

337

338

ANNEXES

Annex 3: List of Interviewees Number A1

Country Qatar

A2 A3

UAE

A4 A5 A6 A7 A8

Bahrain

A9 A10

Kuwait

A11 A12

Saudi Arabia

A13 A14 A15 A16 A17 A18 A19 A20 A21 A22

Oman

Tunisia

Morocco Egypt

A23 A24 A25 A26 A27 A28 A29

Algeria

A30 A31 A32 A33 A34

Lebanon

Libya

Jordon

Syria

Profile of interviewee Legal advisor to the government (non-national) Former public official (non-national) Legal advisor to the government (non-national) High-level professional in the oil field (non-national) Former public official (non-national) High-level official (non-national) Academic lecturer (non-national) Former high-level official (non-national) Visiting professor (non-national) Advisor to the government (non-national) Lecturer (non-national) Former high-level official (non-national) Professor (non-national) Former high-level official High-level official Law professor Civil society activist Former high-level official Law scholar Professor Former minister Advisor in the field of development cooperation Law scholar Government official Professor/UN consultant Former government official Development expert Government official Professor and advisor to the government Former minister Journalist/political activist University lecturer Former government official Former national UN consultant

Year of interview 2017 2016 2017 2015 2016 2017 2018 2016 2017 2016 2017 2016 2017 2016 2018 2017 2019 2017 2016 2015 2016 2019 2018 2016 2016 2016 2019 2016 2019 2016 2018 2019 2016 2016 (continued)

ANNEXES

(continued) A35 A36 A37

Yemen

Diplomat (ambassador) Former minister Law professor

2017 2018 2019

339

Index

A Arab Uprisings, 2, 4, 165

B Bakshish, 68 Berbers, 209, 210, 218, 219

C Crony capitalism, 168, 260, 264, 266, 268, 282

D Decentralization, 27, 29, 30, 211, 212 Democracy, 4, 13, 26–28, 33, 36, 54, 65, 70, 78, 120, 121, 181, 202, 211, 212, 219, 222, 226, 235, 241, 248, 249, 260, 280, 292, 304, 306, 312, 319, 322 Discrimination, 37, 89–91, 103, 109, 115, 116, 118–120, 127–129,

138, 178, 225, 285,

139, 199, 241, 301,

147, 148, 155, 168, 200, 209, 218, 219, 247, 249, 250, 256, 305, 306

E Emergency laws, 167, 193, 194, 204, 221, 261, 306

F Favoritism, 17, 77, 79, 80, 155–157, 175, 219, 220, 225, 227, 243, 245, 246, 258, 285, 302, 304, 306, 313 Focused comparison method, 4, 49–52, 57, 72, 291, 311

G Gender, 35, 37, 70, 71, 89, 104, 116, 119, 127, 128, 138, 147, 155,

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Elsayed, Corruption in the MENA Region, Political Corruption and Governance, https://doi.org/10.1007/978-3-030-55314-2

341

342

INDEX

171, 177, 179, 180, 189, 190, 209, 225, 256, 285, 301, 302 Grand corruption, 15–17, 69, 89, 92, 99, 100, 102, 106, 111, 113, 115–117, 124, 129, 132, 133, 135, 137, 139, 145, 148, 153, 155–157, 175, 178, 180, 188–191, 194, 196, 198, 207, 210, 220, 223, 226, 227, 247, 255, 264, 275, 279, 282, 284, 287, 294, 298, 303–305, 313, 314

M Middle East and North Africa (MENA), 2–5, 15–17, 36–38, 49, 51–53, 56, 57, 61–71, 77, 79, 85, 92, 128, 149, 153, 154, 156, 179, 181, 198, 235, 236, 241, 248, 249, 257, 277, 280, 283, 284, 291–306, 311–313, 315–317 Monopoly, 13, 79, 80, 124, 135, 144, 149, 152, 156, 188, 190–192, 194, 198, 213, 218, 220, 223, 260, 274

I Inequality, 34, 35, 37, 55, 65, 68, 69, 79, 90–92, 104, 105, 115–117, 119, 126–129, 137–139, 147, 148, 153, 154, 156, 168, 175, 177–181, 189–191, 199–201, 207, 209, 210, 218–220, 224– 227, 237, 245–248, 255, 256, 266–269, 278, 281, 283–286, 298, 299, 301, 303, 304, 306, 314–316, 322 Islam, 35, 62, 70, 71, 109, 127, 130, 132, 141, 142, 170, 171, 185, 190, 240

N Nepotism, 13, 129, 138, 175, 180, 243, 256, 304, 313

K Kinship, 115, 138, 240, 246, 302, 313

L Legitimacy, 26, 63, 64, 70, 77, 84, 105, 108, 141, 148, 151, 156, 177, 180, 181, 183, 185, 190, 210, 221, 237, 247–249, 261, 305

17, 68, 77, 80, 104, 155–157, 165, 174, 196, 219, 220, 225, 282, 285, 301, 302,

O Opposition groups, 65, 108, 118, 132, 165, 167, 183, 201, 204, 222, 226, 239, 272, 313

P Petty corruption, 15, 16, 26, 68, 79, 87, 92, 104, 105, 115, 116, 128, 148, 153, 154, 168, 177–180, 189–191, 196, 198–200, 210, 219, 224–227, 237, 246, 247, 255, 257, 267, 268, 275, 278, 279, 284, 285, 299, 300, 303, 304, 306, 313–315 Polarization, 97, 236, 257, 281, 286, 306 Political corruption, 15, 26, 85, 92, 99, 109, 111, 131, 133, 142, 151, 155, 165–167, 172, 174,

INDEX

183, 185, 191, 194, 200, 204, 215, 222, 243, 251, 257, 261, 272, 274, 286 Principal–agent, 12–14, 304 Public office, 4, 10–12, 14, 15, 17, 18, 27, 28, 36, 90, 119, 171, 224, 225, 239, 246, 320

R Rentier states, 78, 92, 154, 166, 298

S Sectarian, 116, 120, 121, 127, 236, 248–251, 253, 255, 257, 258, 267, 279, 281, 286, 306 Self-interest, 12–14, 251 Shi’a, 90, 118–121, 127–129, 138, 139, 147, 155, 286, 305

343

Structured, 4, 27, 49–53, 57, 65–68, 70–72, 93, 96, 104, 106, 115, 123, 124, 145, 167, 177, 181, 186, 196, 201, 216, 227, 249, 257, 268, 275, 280, 283, 285–287, 291, 295, 296, 304, 306, 311, 314, 316 Systematic comparison, 52, 62, 153, 291, 299 T Tribes, 64, 68, 77, 79, 80, 86, 90, 105–107, 111, 131, 132, 137, 141, 150, 152, 155, 157, 198, 212, 219, 240, 270–272, 275, 279, 281, 282, 286, 304 W Wasta, 68