Governance in the Middle East and North Africa: A Handbook 9781857435849, 9780203850053, 2012002335

Citation preview

ROUTLEDGE INTERNATIONAL HANDBOOKS

Governance in the Middle East and North Africa A Handbook Edited by Abbas Kadhim

Governance in the Middle East and North Africa

Governance in the Middle East is a major topic of interest to scholars, activists and policy-makers. The purpose of this volume is to shed light on the contemporary challenges of governance in the Middle East and North Africa (MENA) and to provide an up-to-date account in historical perspective of the political changes currently under way in the region. With analysis of issues including resources and governance, women’s rights, radicalization and political economy, and with the inclusion of country case studies looking at the democratic process unfolding in Iraq, the debate over reform in Iran, the South–North conflict in Yemen and the question of political transition in Egypt and Libya, this book is invaluable to those interested in Middle Eastern affairs. It aims to present the first comprehensive framework of the question of governance in the Middle East in its various forms and manifestations. The Handbook consists of two parts:  Part I provides a theoretical and thematic framework for the mutual influence between governance factors such as economics, trade, culture, social conditions, religion and the status of women.  Part II examines individual case studies in 19 countries and territories of the Middle East. Each case study is written by a leading regional expert and sheds light on the particular challenges to governance in the country in question. The chapters in this volume follow a variety of research methodologies, depending on the topic of each chapter and the contributor’s field of research. This volume offers the most comprehensive and timely reading in the field of MENA governance, and will be an invaluable resource for students, researchers and policy-makers, and for those with a general interest in the region. Abbas Kadhim is an Assistant Professor at the Naval Postgraduate School, Monterey, California, USA, who specializes in Islamic Studies and Middle East History. He is the author of Reclaiming Iraq: The 1920 Revolution and the Founding of the Modern State (University of Texas Press, 2012).

Governance in the Middle East and North Africa

A handbook

Editor: Abbas Kadhim

First edition published 2013 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2013 Routledge The right of Abbas Kadhim to be identified as editor of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Governance in the Middle East and North Africa: a handbook/ editor, Abbas Kadhim. – 1st ed. p. cm. ISBN 978-1-85743-584-9 (hardback : alk. paper) ISBN 978-0-203-85005-3 (ebook) 1. Middle East—Politics and government—1945–. 2. Africa, North—Politics and government—20th century. 3. Africa, North—Politics and government—21st century. I. Kadhim, Abbas K. JQ1758.A58G68 2012 320.956–dc23 2012002335 ISBN: 978-1-85743-584-9 (hbk) ISBN: 978-0-203-85005-3 (ebk) Typeset in Bembo by Taylor & Francis Books Europa Commissioning Editor: Cathy Hartley

Contents

List of illustrations Preface List of contributors List of abbreviations

viii x xii xxiii

PART I

Overview

1

1

3

Governance-constrained growth in the MENA region ROBERT E. LOONEY

2

Stuff is not enough: Resources and governance in the Middle East

33

MARY ANN TÉTREAULT

3

The Middle East political economy and the Arab Awakening: A difficult symbiosis?

50

CHARLES DUNBAR

4

Trade agreements in the MENA region: Contribution to better governance

63

CLAIRE BRUNEL AND GARY HUFBAUER

5

Illegitimate governance: The roots of Islamist radicalization in the MENA

85

MOHAMMED M. HAFEZ

6

Arab intellectuals and authority: A continuity of an implied system

99

HASSAN NADHEM

7

The prospects for democratization in the Middle East

112

HEATHER S. GREGG

8

The improvement of women’s rights in the Arab world: The importance of governing authorities

133

VICKIE LANGOHR AND AMANEY JAMAL

9

The Islamic veil in civil societies FAEGHEH SHIRAZI

155

vi Contents 10 Revolutions in the Middle East: Demands for political, social and economic changes and the states’ repressive response

173

AQEEL ABOOD

PART II

Country studies

185

11 Transition in progress: Governance in Iraq 2003–11

187

ABBAS KADHIM

12 Managing the Islamic Republic: Governance in post-revolutionary Iran

202

BABAK RAHIMI

13 Civilianizing Turkish policy: Civil society in decision-making and civil-military relations

218

EKREM EDDY GÜZELDERE

14 The Kingdom: Can the magic last?

236

DAVID DUNFORD

15 Qatar: Democratic reforms and global status

250

LOUAY BAHRY

16 Government in the United Arab Emirates: Progress and pathologies

275

CHRISTOPHER M. DAVIDSON

17 Political pluralism and governance challenges in Kuwait and Bahrain

292

LAURENCE LOUËR

18 Yemen on the precipice: Governing the ungovernable

306

J.E. PETERSON

19 The solitary sultan and the construction of the new Oman

319

J.E. PETERSON

20 Antimonies of economic governance in contemporary Syria

330

SAMER N. ABBOUD AND FRED H. LAWSON

21 Governance, reform and resurgent ethnic identity politics in Jordan

342

CURTIS R. RYAN

22 Palestinian governance: Against all odds

357

GHADA HASHEM TALHAMI

23 The evolution of governance in Israel JONATHAN FINE AND ITZHAK GALNOOR

382

Contents 24 Governance in Egypt

vii 399

ROBERT SPRINGBORG

25 Sudan: Governance in a divided country, 1956–2010

417

DAVID H. SHINN

26 Governance reforms in Morocco: Beyond electoral authoritarianism?

435

SYLVIA I. BERGH

27 Governance in Algeria: The protracted transition to democratic rule

451

YAHIA H. ZOUBIR

28 Governance in Libya

464

ROGER OWEN

Index

475

Illustrations

Figures 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16

GDP per capita GDP per capita growth rate Regional governance patterns, 1996–2008: voice and accountability MENA governance patterns, 1996–2008: voice and accountability Regional governance patterns, 1996–2008: political stability/absence of violence MENA governance patterns, 1996–2008: political stability/absence of violence Regional governance patterns, 1996–2008: government effectiveness MENA governance patterns, 1996–2008: government effectiveness Regional governance patterns, 1996–2008: regulatory quality MENA governance patterns, 1996–2008: regulatory quality Regional governance patterns, 1996–2008: rule of law MENA governance patterns, 1996–2008: rule of law Regional governance patterns, 1996–2008: control of corruption MENA governance: control of corruption Economic freedom summary score Trade freedom

5 6 9 10 11 12 13 14 15 16 17 18 19 20 22 23

Tables 1.1 1.2 2.1 2.2 2.3 2.4

4.1 4.2

Economic freedom in the MENA region, 2010 Predictions of the impact of increased defence expenditure on growth Oil reserves, production (selected Middle Eastern countries, selected years) Natural gas reserves, production (selected Middle Eastern countries, selected years) Social indicators for selected Middle Eastern and North African hydrocarbon exporters Trends in the value of arms exports to selected Middle Eastern hydrocarbon producers, 1973–2009. Total for the period (per-year average, calculated) in 1990, US$ Trade openness of the MENA countries MENA countries regional and global exports, 2000–2011

21 28 34 34 40

41 64 65

Illustrations 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 13.1

MENA countries regional and global imports, 2000–2011 Regional trade agreements in the MENA region Bilateral trade agreements and date of entry into force Governance indicators for MENA countries, 1996 and 2009 Applied MFN tariffs of MENA countries, 2009 Trade restrictiveness: non-tariff barriers and tariffs Ease of trading across borders ranking, 2010–11 Ease of doing business ranking, 2011 The increase of NGOs establishment in Turkey (1980–2011)

ix 66 67 70 72 73 73 74 77 222

Preface

When this book was commissioned, the Middle East and North Africa (MENA) was a safe place for brutal dictators and authoritarian monarchs. Regional regimes spent eight years and untold resources to prevent the spread of the Iraqi experience to their countries and seemed to have succeeded, at the end of 2010, in defeating any hopes for replicating the post-Saddam transition from static authoritarianism to democratization. The MENA region had no signs of political change to expect or to predict in a book like this one. The only event we had to worry about was the referendum to determine the fate of the southern part of Sudan, which was to be held after David Shinn was going to provide his chapter. In the first days of 2011 I was doing my typical book editor’s job of nagging the few contributors whose to-do lists had other projects competing with their contribution to this book, and I was very satisfied with their assurances to send me the chapters ‘very soon’, so I had no doubt about meeting the deadline I had set for myself and the team. That was when everything in the MENA turned upside down and so did this book’s timeline. In a matter of weeks, many chapters needed serious revision before the manuscript was ready to be sent to the publisher. The most memorable example was Roger Owen’s chapter on Libya. He submitted his chapter one evening and the very next morning I found an e-mail message from him telling me that he needed to revise his chapter: while we slept, Libya’s dictator was captured and killed and Roger Owen’s chapter was no longer up to date. While this book’s manuscript was prepared, many countries witnessed great political change: Tunisia, Egypt, Libya, Yemen, Bahrain, Saudi Arabia and Syria have all seen different levels of popular protest against decades of oppression. Some of these countries experienced regime change, others are still struggling to resolve their internal struggle, while some countries have managed to continue their iron fist rule because they have strong alliances with Western powers or they are ‘too big to fail’, as in the case of Saudi Arabia, the share in the world’s oil exports of which is large enough to force ‘the free world’ to look the other way. This book is timely because it sets the stage for many future studies that will focus on governance in the MENA. Part I consists of 10 chapters focusing on theoretical and thematic issues that relate to governance: economic performance, trade agreements, political economy, religious radicalization, state-intellectual relations, women’s status, and the role of social movements in the latest events. Part II includes 18 case studies that examine governance in 19 countries in the MENA region. Writing on unfolding revolutionary events always comes with many risks, because it is impossible to know the outcome of such events. Therefore, the authors of the following

Preface xi chapters deserve special credit for agreeing to take these risks and to write about governance in countries facing an historic revolutionary wave not seen since the fall of authoritarianism in Eastern Europe. As I present this well-timed volume to the readers, I would like to thank all of the contributors for their diligence and scholarly efforts, which made this book possible. Also, many thanks to Cathy Hartley, Europa Commissioning Editor, for her foresight in recognizing the importance of this book and her patience throughout the past two years. Roya Tobin and Alison Neale have worked tirelessly on the preparation of the final version of the book and deserve very special thanks. Finally, I would like to thank my family for their continued love and support. Abbas Kadhim

Contributors

Samer N. Abboud is Assistant Professor of International Studies at Arcadia University. He received his doctorate in Arab and Islamic Studies at the University of Exeter, where he completed a dissertation entitled ‘The Political Economy of Marketization in Syria’. In addition to having published journal articles and book chapters related to economic policy in Lebanon, Iraq, Syria and the Gulf Cooperation Council, he is currently working on a manuscript entitled Neoliberalism, Privatization, and Political Change in the Arab World. Aqeel Abood is an independent scholar. He earned his BA in philosophy from the University of Baghdad. Following his participation in the 1991 uprising in Iraq, he spent 18 months in the Iraqi refugee camp in Saudi Arabia before resettling in the USA in 1992. He earned his MA in political science from the San Francisco State University for his thesis, ‘The Sadrist Movement: Success in Mobilizing People in Iraq’. He is currently working on a book manuscript on social movements in post-Saddam Iraq. Louay Yunis Bahry is currently an Adjunct Professor of Political Science at the University of Tennessee. Between 2004 and 2008 he was an Adjunct Scholar at the Middle East Institute, Washington, DC. Between 2001 and 2004 he was Chairman, Department of Public Administration at the University of Qatar, in Doha. He is a political scientist who specializes in the Middle East and the Persian Gulf, and has written and lectured extensively on the subject. Born in Baghdad, Iraq, he received a degree in law from the University of Baghdad and a doctorate in political science from the University of Montpellier, France. Dr Bahry taught political science at the University of Baghdad in 1962–77. He has also taught in several other universities, including King Abdul Aziz University in Jeddah, Saudi Arabia, the University of Algiers, Algeria, and Ohio State University in Columbus, Ohio, USA, and has spent a year as a Research Fellow at the University of Cologne, in Germany. He is also an Adjunct Professor of Political Science at the University of Tennessee, Knoxville, USA. Since 2002 he has acted as a consultant to the US government. Dr Bahry has published extensively on Iraq, the Persian Gulf and the Middle East. He wrote a major study on the Baghdad Railway Question, published in Baghdad, 1967. His recent publications include two articles on the opposition in Bahrain, one in the Mediterranean Quarterly, Summer, 2000, and one in Middle East Policy, May 1997; articles on elections in Qatar and on Qatar’s Al Jazeera, in Middle East Policy, 1999 and 2001; and two articles on Qatar and on railroads in the Middle East in Middle East

Contributors xiii Insight in 2001. In 2002 he co-authored, with Phebe Marr, an article on Qatari women published in Middle East Policy, 2005. Dr Bahry has been a contributor to the Encyclopedia Britannica for the past 13 years, contributing articles on Bahrain, Kuwait, Qatar and Iraq. In 2007–08, he contributed articles on Qatar, Iraq and the Gulf to the Middle East Institute website. As an expert on Iraq, the Gulf and the Middle East, Dr Bahry has given numerous interviews to major newspapers, such as The New York Times, the Wall Street Journal and Izvestia, and appeared on major TV networks, including CNN, the BBC, Al Jazeera and Iraqi TV stations. Sylvia I. Bergh is a Swedish national and an academic active in Morocco’s democratic decentralization, good governance and local government themes since 2002. Her PhD thesis (in Development Studies, University of Oxford, 2008) was on decentralization and participatory approaches to rural development in Morocco. She has taught, presented and published widely on decentralization (including fiscal issues), participatory approaches to rural development, local governance, civil society-state interactions, capacity building and institutional sustainability, water governance, donor policies and aid harmonization, theory-based evaluation as well as migration issues. Since 2007 Bergh has been working as a (senior) lecturer in development management and governance at the International Institute of Social Studies in The Hague (part of Erasmus University Rotterdam), and a member of the teaching teams responsible for the MA specializations in Public Policy & Management, and Governance & Democracy. Her work experience includes two years at the World Bank in both the President’s Office and the Morocco Country Office, as well as consultancy assignments for UNIFEM (UN Entity for Gender Equality and the Empowerment of Women—now UN Women) (evaluating the gender responsive budgeting programme in Morocco) and Dutch non-governmental organizations (NGOs) (on democracy assistance in Morocco). She also has hands-on experience in training local government staff and local politicians in Uganda. Her language skills include fluent English, French, German and Swedish, as well as intermediate Arabic, having earned an MA degree (First Class Honours) in Arabic and International Relations from the University of St Andrews in Scotland in 1999. She also holds an MPhil degree in Modern Middle Eastern Studies (with Turkish language) from the University of Oxford (2001). Claire Brunel was a research assistant at the Peterson Institute for International Economics 2007–9, and a trade policy attaché at the French Embassy. While at the Institute, Brunel focused on trade issues, particularly regarding North Africa, North America and the European Union (EU). Before joining the Institute, she worked at the European Commission in the Economics and Financial Affairs Directorate General, for BNP Paribas in macroeconomic studies, and for Schroeder Salomon Smith Barney in mergers and acquisitions. She obtained a BSc in mathematics and economics from Georgetown University and an MPhil in economics from the University of Oxford. She is coeditor of Capitalizing on the Morocco-US Free Trade Agreement: A Road Map for Success (2009), and Maghreb Regional and Global Integration: A Dream to Be Fulfilled (2008). Christopher M. Davidson is a reader in Government and International Affairs at Durham University. He was formerly an assistant professor at Zayed University in the United Arab Emirates and a visiting associate professor at Kyoto University in Japan. He is a listed expert with the UN’s Alliance of Civilisations, has been consulted by the

xiv

Contributors

UN’s Special Rapporteur on Human Rights, and his work has been cited by the UNHCR (the UN Refugee Agency). He is the author of four books: The United Arab Emirates: A Study in Survival; Dubai: The Vulnerability of Success; Abu Dhabi: Oil and Beyond; and The Persian Gulf and Pacific Asia: From Indifference to Interdependence. He has delivered public lectures at a number of leading universities, including Stanford, Yale and Oxford. He has written articles for The Guardian, The Daily Telegraph, New Statesman, Foreign Policy, Al-Akhbar and OpenDemocracy. He has appeared on most mainstream current affairs television and radio shows, including BBC 2’s Newsnight, BBC Radio 4’s PM and Today shows, Sky’s Jeff Randall Show, CNN’s Connect the World, and NPR’s All Things Considered. He can be followed at twitter.com/dr_davidson. Charles Dunbar has practised, written about and taught international relations for 50 years. In 2011, having been professor of international relations at Boston University for seven years, he resigned his full-time position and now teaches two courses a year. From 1962 to 1993 Ambassador Dunbar was a career State Department foreign service officer and was ambassador to Qatar (1983–5) and to Yemen (1988–91). He was chargé d’affaires at the US Embassy in Kabul, Afghanistan (1981–3) and later developed and helped carry out a strategy for strengthening the political dimension of the Afghan resistance to the Soviet occupation of Afghanistan. Earlier in his career, he served in Iran, Afghanistan, Morocco, Algeria and Mauritania. In 1998 he was UN Secretary-General Kofi Annan’s Special Representative in Western Sahara, seeking to organize a referendum to determine whether the territory would become independent or a part of Morocco, which has occupied it since 1975. After leaving the State Department, Ambassador Dunbar was President of the Cleveland Council on World Affairs for eight years. During that time he taught at Case Western Reserve University, Cleveland State University and Hiram College. For three years prior to joining the faculty at Boston University, he was the Warburg Professor in International Relations at Simmons College. Ambassador Dunbar has published journal articles and chapters in edited volumes on American foreign policy, the Western Sahara, Yemen and Afghanistan. His ‘op-ed’ articles have appeared in The Boston Globe, The Cleveland Plain Dealer and other newspapers. He also comments regularly on foreign affairs on local, national and international radio and television. David Dunford spent 29 years in the US Foreign Service, including three years as US Ambassador to Oman and four years as Deputy Ambassador to Saudi Arabia during the 1990–1 Gulf War. He worked for General Garner and Ambassador Bremer in Iraq in 2003 as the senior official in charge of reorganizing Iraq’s Ministry of Foreign Affairs. His other assignments have included Economic Minister-Counselor in Cairo, Director of Egyptian Affairs in Washington, Deputy Assistant US Trade Representative in the Executive Office of the President, and Coordinator of the multinational team tasked with setting up MENABank, a proposed regional multilateral development bank in Cairo. Ambassador Dunford teaches courses on the Arab-Israeli Conflict and the Middle East Business Environment at the University of Arizona, and consults for government and the private sector on Middle East issues. He is former Chairman and active board member of the Association for International Practical Training (AIPT), a non-profit organization specializing in international exchanges.

Contributors xv Jonathan Fine is the undergraduate adviser of the international programme in government, diplomacy and strategy at both the Raphael Recanati International School and the Lauder Government School at the interdisciplinary centre (IDC, Herzlyia, Israel), and a fellow researcher at the International Institute for Counter-Terrorism (ICT). Recently, he was appointed as the academic adviser of the joint programme between the IDC and the Maxwell Government School at the University of Syracuse. He is a member of the International Counter-Terrorism Academic Community (ICTAC) and the International Center for Study of Radicalization and Political Violence (ICSR) at King’s College London. Dr Fine received his PhD from the Hebrew University of Jerusalem, and is a graduate of the Executive Course in Counter-Terrorism at the ICT and the special programme in Intelligence Services and International Security sponsored by the University of Cartagena, Spain. He has a wide background in history, comparative religion, political science and international relations, and specializes in comparative politics with emphasis on the transition from secular agenda political violence to religious agenda political violence, focusing on global and regional perspectives, with emphasis on monotheism and its concept of holy war. He is also an expert on the Middle East and Israeli Studies, with special interest in government structures, arms control and conflict resolution. Dr Fine has been published in numerous academic journals, such as the Middle East Quarterly in Washington and Middle Eastern Studies in London, and has several chapters in books, both in Israel and abroad. Forthcoming books in the USA are: Holy War in Judaism, Christianity, and Islam—a Comparative Analysis: Past & Present (University of Texas Press, Austin), and The Israeli Governmental System: The Establishment of a Sovereign State 1947–1951 (The State University of New York: SUNY Press). Itzhak Galnoor is Herbert Samuel Professor of Political Science (emeritus) at Hebrew University of Jerusalem. He served on the Executive Committee of the International Political Science Association, and edited Advances in Political Science, Cambridge University Press and IPSA book series. In 1994–6 he was the Head of the Civil Service Commission. Professor Galnoor has served on Israel Science Foundation’s Executive Committee and on the Governing Board of Hebrew University of Jerusalem. In 2007–8 he served as the Deputy Chair of the Israeli Council of Higher Education. He is currently the head of a research project at the Van Leer Institute on ‘the responsibility of the state and the boundaries of privatization’. His research interests are comparative politics, the Israeli political system, humour and politics. He has written several books and many articles. His new book with Dana Blander, The Israeli Political System, will be published in Hebrew and English in 2012. Heather S. Gregg is an assistant professor at the Naval Postgraduate School’s (NPS) Department of Defense Analysis. Prior to joining the faculty at NPS, she was an associate political scientist at the RAND Corporation. Dr Gregg earned her PhD in Political Science in 2003 from the Massachusetts Institute of Technology, where she focused on international relations and security studies. Dr Gregg also holds a master’s degree from Harvard Divinity School, with a concentration in Islam, and a BA in Cultural Anthropology from the University of California, Santa Cruz. Dr Gregg has published articles and books on issues relating to security in the Middle East, including ‘Setting a Place at the Table: Ending Insurgencies Through the Democratic Process’ (in Small Wars and Insurgencies, 2011); ‘US Relations with Al Qaeda’ (in The Middle

xvi

Contributors

East and the United States, fifth edition, edited by David W. Lesch and Mark L. Haas, Wiley-Blackwell, 2011); and ‘US Relations with Islamic Organizations in the Middle East’ (in Middle East Handbook, edited by Robert E. Looney, Routledge, 2009). She was also an editor and contributor to The Three Circles of War: Understanding the Dynamics of Modern War in Iraq (Potomac, 2010). Ekrem Eddy Güzeldere is a political analyst with the European Stability Initiative (ESI), a think tank working on political and social change in Turkey. He is based in ESI’s Istanbul office. His fields of interest are the Kurdish question, minorities, Turkey’s ‘deep state’, its changing foreign policy, civil-military relations, as well as the debate in Germany about integration and Turkey-EU relations. Besides his work for ESI he is the Turkey tour expert of political tours, an agency organizing group tours and tailormade itineraries on politics and current affairs. He is also the host of a weekly radio programme about current domestic and international affairs on Acik Radyo, in English. Prior to working with ESI he worked for the German political foundation Heinrich Böll in Istanbul, where he was responsible for projects on human rights and energy issues. Previously Güzeldere worked in the European Parliament in Brussels and the communication agency Walueurope in Rome. He holds a master’s degree in political science from the Free University of Berlin (2000), a postgraduate ‘Euromasters’ degree obtained in universities in Bath, Paris and Madrid (2001), and a master’s degree in Peace Studies from Hagen University (2008). Mohammed M. Hafez earned his PhD from the London School of Economics and Political Science. He is now an Associate Professor in the Department of National Security Affairs at the Naval Postgraduate School in Monterey, California. Previously, he served as Visiting Professor of Political Science at the University of Missouri, Kansas City. A specialist in Islamic movements and political violence, his books include Why Muslims Rebel: Repression and Resistance in the Islamic World (2003); Manufacturing Human Bombs: The Making of Palestinian Suicide Bombers (2006); and Suicide Bombers in Iraq: The Strategy and Ideology of Martyrdom (2007). Dr Hafez is also the author of numerous book chapters and journal articles on Islamic movements, political radicalization and jihadist ideologies. He regularly briefs government and military analysts on issues related to terrorism, war of ideas and countering radicalization. Dr Hafez has made several appearances on NewsHour with Jim Lehrer, NPR, C-SPAN, and other national and international media outlets. Gary Clyde Hufbauer has been a Reginald Jones Senior Fellow since 1992, was formerly the Maurice Greenberg Chair and Director of Studies at the Council on Foreign Relations (1996–8), the Marcus Wallenberg Professor of International Finance Diplomacy at Georgetown University (1985–92), senior fellow at the Institute (1981–5), deputy director of the International Law Institute at Georgetown University (1979–81); deputy assistant secretary for international trade and investment policy of the US Treasury (1977–9); and director of the international tax staff at the Treasury (1974–6). He has written extensively on international trade, investment and tax issues. He is coauthor of Figuring Out the Doha Round (2010), Global Warming and the World Trading System (2009), Economic Sanctions Reconsidered (third edition, 2007), US Taxation of Foreign Income (2007), Toward a US-Indonesia Free Trade Agreement (2007), US-China Trade Disputes: Rising Tide, Rising Stakes (2006), The Shape of a Swiss-US Free Trade

Contributors xvii Agreement (2006), NAFTA Revisited: Achievements and Challenges (2005), Reforming the US Corporate Tax (2005), Awakening Monster: The Alien Tort Statute of 1789 (2003), The Benefits of Price Convergence (2002), and World Capital Markets (2001); and coeditor of Capitalizing on the Morocco-US Free Trade Agreement: A Road Map for Success (2009), Maghreb Regional and Global Integration: A Dream to Be Fulfilled (2008), The Ex-Im Bank in the 21st Century (2001), Unfinished Business: Telecommunications after the Uruguay Round (1997), and Flying High: Liberalizing Civil Aviation in the Asia Pacific (1996). He is author of Fundamental Tax Reform and Border Tax Adjustments (1996) and US Taxation of International Income (1992), and coauthor of Western Hemisphere Economic Integration (1994), Measuring the Costs of Protection in the United States (1994), NAFTA: An Assessment (revised edition, 1993), North American Free Trade (1992), Economic Sanctions Reconsidered (second edition, 1990), Trade Policy for Troubled Industries (1986), and Subsidies in International Trade (1984). Amaney Jamal is Associate Professor of Politics at Princeton University, and she currently directs the Workshop on Arab Political Development. Jamal’s current research focuses on democratization and the politics of civic engagement in the Arab world. She extends her research to the study of Muslim and Arab Americans, examining the pathways that structure their patterns of civic engagement in the USA. Jamal has written four books. Her first book, Barriers to Democracy, which won the Best Book Award in Comparative Democratization at the American Political Science Association (2008), explores the role of civic associations in promoting democratic effects in the Arab world. Her second book, an edited volume with Nadine Naber (University of Michigan), looks at the patterns and influences of Arab-American racialization processes. She is revising a third book on patterns of citizenship in the Arab world, tentatively entitled Of Empires and Citizens: Authoritarian Durability in the Arab World (under contract with Princeton University Press). Jamal is also a co-author on the book, Citizenship and Crisis: Arab Detroit after 9-11. Finally, Jamal is working on a new single-authored book project entitled Living Poverty: The Urban and Rural Poor in Comparative Development. Jamal is a principal investigator of the ‘Arab Barometer Project’, winner of the Best Dataset in the field of Comparative Politics: Lijphart/Przeworski/Verba Dataset Award (2010); co-PI of the ‘Detroit Arab American Study’, a sister survey to the Detroit Area Study; and Senior Advisor on the Pew Research Center Projects focusing on Islam in America (2006) and Global Islam (2010). In 2005 Jamal was named a Carnegie Scholar. Abbas Kadhim is Assistant Professor of National Security Affairs at the Naval Postgraduate School, Monterey, California. He has also held a Visiting Scholar status at Stanford University since 2005. He earned his PhD from the University of California, Berkeley, in 2006. His recent publications include: Reclaiming Iraq: the 1920 Revolution and the Founding of the Modern State (Austin: The University of Texas Press, forthcoming 2012); ‘Re-building the Iraqi Military: Democratic Civilian Control, Effectiveness and Efficiency’ (in Handbook on Civil-Military Relations, edited by Thomas Bruneau and Cristiana Matei, London: Routledge 2012); ‘Beyond the Oil Curse: Iraq’s Wealthy State and Poor Society’ (in Handbook of Oil Politics, edited by Robert Looney, London: Routledge 2012); ‘Efforts at Cross-Ethic Cooperation: the 1920 Revolution and Iraqi Sectarian Identities’ (International Journal of Contemporary Iraq Studies vol. 4, issue 3, 2010); ‘Forging a Third Way: Sistani’s Marja’iyya between

xviii Contributors Quietism and Wila-yat al-Faqı-h’ (in Iraq, Democracy and the Future of the Muslim World, edited by Ali Paya and John Esposito, Routledge, July 2010); ‘Widows’ Doomsday: Women and War in the Poetry of Hassan al-Nassar’ (in Women and War in Muslim Countries, edited by Faegheh Shirazi, Austin: The University of Texas Press, June 2010); ‘Opting for the Lesser Evil: US Foreign Policy Toward Iraq, 1958–2008’ (in Handbook of US Middle East Relations, edited by Bob Looney, London: Routledge, 2009); and ’Shi’i Perceptions of the Iraq Study Group’ (Strategic Insights vol. VI, issue 2, March 2007). His book translations include Shi‘a Sects (Firaq al-Shi‘a): A Translation with an Introduction and Notes (London: Islamic College for Advanced Studies Press, 2007); Wahhabism: A Critical Essay, by Hamid Algar (Arabic translation, Köln, Germany: Dar al-Jamal, 2006); and Runaway World: How Globalization is Reshaping our Lives, by Anthony Giddens (Arabic translation, with Dr Hassan Nadhem, Beirut, 2003). Vickie Langohr is associate professor of political science at the College of the Holy Cross, where she also serves as the director of the Peace and Conflict Studies program. She earned her PhD in political science at Columbia University and has published articles in Comparative Politics, Comparative Studies of Society and History, the International Journal of Middle East Studies, the Journal of Democracy, and Comparative Studies of South Asia, Africa, and the Middle East, as well as at Foreign Affairs.com and Foreign Policy.com. Fred H. Lawson is Lynn T. White, Jr. Professor of Government at Mills College. In 2009/10 he was Senior Visiting Fellow at the Georgetown University School of Foreign Service in Qatar. His publications include Constructing International Relations in the Arab World (Stanford University Press, 2006), Why Syria Goes to War (Cornell University Press, 1996), The Social Origins of Egyptian Expansionism during the Muhammad ‘Ali Period (Columbia University Press, 1992), and Bahrain: The Modernization of Autocracy (Westview Press, 1989). He edited Demystifying Syria (London: Saqi Books, 2009), and Comparative Regionalism (Aldershot: Ashgate, 2010). From 2009 to 2011 he was president of the Syrian Studies Association, and spent the 1992/93 academic year as Fulbright Lecturer in International Relations at the University of Aleppo. Robert E. Looney is a Distinguished Professor at the Naval Postgraduate School, Monterey, California. He received his PhD in Economics from the University of California, Davis. He specializes in issues relating to economic development in the Middle East, East Asia, South Asia and Latin America. He has published 22 books, including: The Pakistani Economy: Economic Growth and Structural Reform (Praeger Publishers, 1997); and Iraq’s Informal Economy: Reflections of War, Sanctions and Policy Failure (Abu Dhabi: The Emirates Center for Strategic Studies and Research 2007); and as editor, Handbook of US-Middle East Relations (London: Routledge, 2009), and Handbook of Oil Politics (London: Routledge 2012). He is currently editing the Handbook of Emerging Economies for Routledge. Dr Looney is on the board of editors of the International Journal on World Peace and Journal of Third World Studies. In addition, he has had over 250 articles appearing in numerous professional journals, including: World Economics, Journal of Development Economics, Middle East Policy, Middle Eastern Studies, Orient, OPEC Review, Middle East Journal, Economic Development and Cultural Change, Journal of Energy and Development, Development Policy Review, American-Arab Affairs, Iranian Studies, Challenge, World Development, Pakistan Development Review, Modern African

Contributors xix Studies, Asian Survey, International Organization, Mediterranean Quarterly, South Asia, Economia Internationale, Journal of Economic Development, Journal of South Asian and Middle Eastern Studies, The National Interest, and Contemporary South Asia. As an international consultant, Dr Looney has provided advice and assistance to the governments of Iran, Saudi Arabia, Japan, Mexico, Panama and Jamaica, as well as the World Bank, International Labor Office, Inter-American Development Bank, Stanford Research Institute, RAND Corporation, and the International Monetary Fund. Laurence Louër is a research fellow at Sciences Po, the Centre for International Studies and Research (CERI), National Centre for Scientific Research (CNRS) in Paris. She is the editor of the French peer-reviewed, quarterly journal Critique Internationale. She served as a permanent consultant for the Direction of Prospective (DP) of the French Ministry of Foreign Affairs between 2004 and 2009. Her research focuses on identity politics in the Middle East and social and employment policies in the Gulf monarchies. She is the author of To Be an Arab in Israel (London: Hurst/New York: Columbia University Press, 2007), Transnational Shia Politics. Religious and Political Networks in the Gulf (London: Hurst/New York: Columbia University Press, 2008), and Shiism and Politics in the Middle East. Iran, Iraq, Lebanon, Gulf monarchies (London: Hurst/New York: Columbia University Press, forthcoming 2012). Hassan Nadhem is a Research Director at BAE Systems Corporation. He received his doctorate in modern Arabic literature at the University of Mustansiriyah, Baghdad, in 1995. Dr Nadhem has taught in several Arab universities and institutions of higher education. He wrote a module on the Quranic and Hadith Sciences at the Islamic College for Advanced Studies (ICAS), validated by Middlesex University at London. Since 2009 he has been working as a module teacher responsible for the MA specializations in the Quran and Hadith Studies. His work experience includes more than 10 years of teaching, as well as five years as a research director. Dr Nadhem has published 17 original and translated books in Arabic. His current research activities mainly involve cross-cultural studies, critical theory, linguistics and modern Arabic literature. His most recent research approached the great poet Fuzuli between two countries (Iraq and Azerbaijan). He has been a contributor to various Arabic magazines and newspapers, such as al-Aadaab (Beirut), al-Ittihad (UAE), Nawafidh (Saudi Arabia), al-Gasrah (Qatar), al-Ayam (Bahrain), Azzaman (London), al-Rai (Jordan), al-Sabah and al-Mada (Iraq), and Alaalem (Iraq). Roger Owen is currently the A.J. Meyer Professor of Middle East History at Harvard University and a former director of the Center for Middle Eastern Studies there. He previously taught Middle East political and economic history at the University of Oxford, where he was also many times the Director of St Antony’s College Middle East Centre. His books include Cotton and the Egyptian Economy, The Middle East in the World Economy: 1800–1914, and State, Power and Politics in the Making of the Modern Middle East (third revised edition, 2004), and a biography of Evelyn Baring, the first Lord Cromer, Lord Cromer: Victorian Imperialist, Edwardian Proconsul (Oxford University Press, 2004). He is also the co-author (with Sevket Pamuk) of A History of the Middle East Economies in the Twentieth Century. His most recent publication is The Rise and Fall of Arab Presidents for Life (Harvard University Press, 2012). He has written a regular column for the Arabic newspaper Al-Hayat since the late 1980s.

xx

Contributors

J.E. Peterson is an historian and political analyst specializing in the Arabian Peninsula and Gulf. He has taught at various universities in the USA and has been associated with a number of leading research institutes in the USA and abroad. Until 1999, he served in the Office of the Deputy Prime Minister for Security and Defence in Muscat, Sultanate of Oman. He is the author or editor of a dozen books, the most recent of which are Defense and Regional Security in the Arabian Peninsula and Gulf, 1973–2004: An Annotated Bibliography (Gulf Research Center, 2006); Historical Muscat: An Illustrated Guide and Gazetteer (Brill, 2007); and Oman’s Insurgencies: The Sultanate’s Struggle for Supremacy (Saqi, 2007). He has also published some 40 scholarly articles in such journals and annuals as American Historical Review, Arab-American Affairs, Arabian Studies, Asian Affairs, Encyclopædia Britannica, Hoover Institution Yearbook on International Communist Affairs, Mediterranean Quarterly, Middle East Journal, Middle East Policy, Orbis, RUSI/Brassey’s Defence Yearbook, Survival and Washington Quarterly, as well as over 20 contributions to edited works. He is presently working on a book on Oman since 1970, an historical biography of Saudi Arabia, and a modern history of Arabia. Babak Rahimi is an Associate Professor of Communication, Culture and Religion at the Department of Literature, University of California, San Diego, Rahimi received a Ph.D. from the European University Institute, Florence, Italy, in October 2004. Rahimi has also studied at the University of Nottingham, where he obtained a MA in Ancient and Medieval Philosophy, and the London School of Economics and Political Science, where he was a Visiting Fellow at the Department of Anthropology, 2000–1. Rahimi has written numerous articles on culture, religion and politics and regularly writes on contemporary Iraqi and Iranian politics. He has also made several appearances on BBC (Persia), CNN, NewsHour with Jim Lehrer, NPR and other national and international media outlets. His book, Theater-State and Formation of the Early Modern Public Sphere in Iran: Studies on Safavid Miuharram Rituals, 1590–1641 CE, studies the relationship between ritual, social space and state power in the early modern Iranian history. He has been a visiting scholar at the Internet Institute, University of Oxford and the Annenberg School for Communication at the University of Pennsylvania. He has been also the recipient of fellowships from the National Endowment for the Humanities and Jean Monnet Fellowship at the European University Institute, and was a Senior Fellow at the United States Institute of Peace, Washington DC, 2005–6. Rahimi’s current research project is on the relationship between digital culture, politics and religion. Curtis R. Ryan specializes in international relations and comparative politics, with particular interests in Middle East politics, Islam and politics, and international terrorism. Dr Ryan holds a PhD from the University of North Carolina at Chapel Hill. He is also a Fulbright Scholar to the Hashemite Kingdom of Jordan and the author of Jordan in Transition: From Hussein to Abdullah, and Inter-Arab Alliances: Regime Security and Jordanian Foreign Policy. David H. Shinn has been an adjunct professor in the Elliott School of International Affairs at George Washington University since 2001. He served for 37 years in the US Foreign Service, with assignments at embassies in Lebanon, Kenya and Tanzania. He served as the deputy chief of mission at embassies in Mauritania, Cameroon and

Contributors xxi Sudan, and as ambassador to Burkina Faso and Ethiopia. His State Department positions included assistant desk officer for Ethiopia, desk officer for Somalia, Djibouti, Uganda and Tanzania in the late 1960s and early 1970s. He was the State Department co-ordinator for Somalia during the international intervention in the early 1990s, and director for East and Horn of Africa affairs in the mid-1990s. He has written extensively on the Horn of Africa and serves on several NGO boards dealing with the region. He lectures around the world and is co-author of a book on China-Africa relations published by the University of Pennsylvania press in June. Ambassador Shinn continues to visit the region. He has a PhD in political science from George Washington University. He blogs at davidshinn.blogspot.com. Faegheh Shirazi is professor in the Department of Middle Eastern Studies at the University of Texas at Austin. Her research interests and specializations are Islamic veiling, popular religious rituals and their influence on gender identity and discourse in Muslim societies, and the Islamic material culture, textiles and clothing. In addition to her numerous published articles, she is the author of Velvet Jihad: Muslim Women’s Quiet Resistance to Islamic Fundamentalism (Gainesville: University Press of Florida, 2009), The Veil Unveiled: Hijab in Modern Culture (Gainesville: University Press of Florida, 2001), and as editor, Muslim Women in War and Crisis: From Reality to Representation (Austin: The University of Texas Press, 2010). Currently she is working on a new manuscript, Marketing Piety: Islamic Commodity. Robert Springborg is a Professor in the Department of National Security Affairs of the Naval Postgraduate School, and Program Manager for the Middle East for the Center for Civil-Military Relations. Until August 2008, he held the MBI Al Jaber Chair in Middle East Studies at the School of Oriental and African Studies (SOAS), in London, where he also served as Director of the London Middle East Institute. Before taking up that Chair he was Director of the American Research Center in Egypt. From 1973 until 1999 he taught in Australia, where he was University Professor of Middle East Politics at Macquarie University. He has also taught at the University of California, Berkeley, the University of Pennsylvania, and elsewhere. His publications include Mubarak’s Egypt: Fragmentation of the Political Order; Family Power and Politics in Egypt; Legislative Politics in the Arab World (co-authored with Abdo Baaklini and Guilain Denoeux); Globalization and the Politics of Development in the Middle East (co-authored with Clement M. Henry); Oil and Democracy in Iraq; Development Models in Muslim Contexts: Chinese, ‘Islamic’ and Neo-Liberal Alternatives, and several editions of Politics in the Middle East (co-authored with James A. Bill). He has worked as a consultant on Middle East governance and politics for the US Agency for International Development, the US State Department, the UN Development Programme, and various UK government departments, including the Foreign and Commonwealth Office, the Ministry of Defence and the Department for International Development. Ghada Hashem Talhami is D.K. Pearsons Professor of Politics emerita, Lake Forest College, Illinois. She was born in Amman, Jordan, to Palestinian parents and grew up mostly in Jerusalem and Amman. She has taught at various universities such as Damascus University as a senior Fulbright scholar, the University of Illinois-Chicago, California Polytechnic State University at San Luis Obispo, and University of Tunisia at al-Manar. She serves on the boards of Arab Studies Quarterly and Muslim World. She

xxii Contributors has authored several books, among which are: Palestinian Refugees: Pawns to Political Actors; Syria and the Palestinians: The Clash of Nationalisms; The Mobilization of Muslim Women in Egypt; Palestine and the Egyptian National Identity; Massawa and Suakin under Egyptian Rule; Palestine in the Egyptian Press: From al-Ahram to al-Ahali. She is also the author of several articles on the Jerusalem issue and a shorter study on the education of women in the Arab Gulf region. She is currently working on an historical dictionary of women in the Middle East and North Africa. Mary Ann Tétreault is the Una Chapman Cox Distinguished Professor of International Affairs at Trinity University. Her publications include books and articles about social movements, gender, oil markets, war crimes, international political economy, world politics, and American foreign policy. Her regional specialization is the Middle East, especially Kuwait and the Persian Gulf. Yahia H. Zoubir is Professor of International Relations and International Management, and Director of Research in Geopolitics at Euromed Management, Marseille School of Management. Prior to joining Euromed in September 2005, he was Managing and Academic Director of Thunderbird Europe, French-Geneva Centre in Archamps, France. He was full, tenured Professor of Global Business and International Studies at The American Graduate School of International Management, Glendale, Arizona, USA. He was Editor-in-Chief of the refereed Thunderbird International Business Review (1996–2007). From May 2006 to May 2009 he was Co-Editor-in-Chief of Global Business and Organizational Excellence—A Review of Research and Best Practices, published by Wiley in the USA. Dr Zoubir is co-author of Doing Business in Emerging Europe (UK: Palgrave, 2003); co-editor of North Africa: Politics, Region, and the Limits of Transformation (Routledge, 2008); editor of and main contributor to North Africa in Transition—State, Society & Economic Transformation in the 1990s (University Press of Florida, 1999); co-editor of L’Islamisme Politique dans les Rapports entre l’Europe et le Maghreb (Lisbon: Friedrich Ebert Stiftung, 1996); and co-editor of and main contributor to International Dimensions of the Western Sahara Conflict (Praeger Publishers, 1993). His publications have appeared in major US, Canadian and European scholarly journals, and as chapters in edited volumes. He has also contributed to various encyclopaedias.

Abbreviations

AA ACC ACM ADIA AEC AMU APRM AQAP ARAMCO ASCM ATU AU AWACS BAPCO BIT BRIC CDLR CEDAW CEN CEN-SAD CIA COM COMESA CPA DOP DUP EC EDB EFTA EIU ENP EU FBI FDI FNC

association agreement Arab Cooperation Council Arab Common Market Abu Dhabi Investments Authority African Economic Community Arab Maghreb Union African Peer Review Mechanism al-Qa’ida in the Arabian Peninsula Arabian-American Oil Company Agreement on Subsidies and Countervailing Measures Agadir Technical Unit African Union air warning and control systems Bahrain Petroleum Company bilateral investment treaties Brazil, Russia, India, China Committee for the Defence of Legal Rights Convention on the Elimination of Discrimination Against Women European Committee for Standardization Community of Sahel Saharan States Central Intelligence Agency (USA) Council of Ministers (UAE) Common Market for Eastern and Southern Africa Comprehensive Peace Agreement (Sudan) Declaration of Principles Democratic Unionist Party Executive Committee Economic Development Board (Bahrain) European Free Trade Association Economist Intelligence Unit European Neighbourhood Policy European Union Federal Bureau of Investigation (USA) foreign direct investment Federal National Council (UAE)

xxiv Abbreviations FTA GAFTA GATS GCC GDP GLP GNP GNU GPA GSO HDI IAF ICC ICI IDF IDP IEA IGC ILO IMF IMP IPR JECOR JSCC KHDA KUFPEC LMI LNG MB MENA MGRP MODA MP NATO NCC NCP NGO NIE NIF NTB OECD OHCHR OIC OPEC ORHA PFLP

free trade agreement Greater Arab Free Trade Area General Agreement on Trade in Services Gulf Cooperation Council (or Cooperation Council for the Arab States of the Gulf) gross domestic product Golden List Program gross national product Government of National Unity (Sudan) Government Procurement Agreement Gulf Standards Organization Human Development Index Islamic Action Front (Jordan) International Criminal Court Islamic Supreme Council of Iraq Israeli Defence Forces Irrigation and Drainage Project International Energy Agency Iraq Governing Council International Labour Organization International Monetary Fund industry modernization programme intellectual property rights Joint Commission on Economic Cooperation Joint Security Cooperation Commission Knowledge and Human Development Authority (Dubai) Kuwait Foreign Petroleum Exploration Company low-to-medium income liquefied natural gas Muslim Brotherhood Middle East and North Africa Manpower and Government Restructuring Programme (Kuwait) Ministry of Defence and Civil Aviation (Saudi Arabia) member of parliament North Atlantic Treaty Organization National Consultative Council (Abu Dhabi) National Congress Party (Sudan) non-governmental organization new institutional economics National Islamic Front (Sudan) non-tariff barrier Organisation for Economic Co-operation and Development Office of the UN High Commissioner for Human Rights Organization of Islamic Conference Organization of the Petroleum Exporting Countries Office of Reconstruction and Humanitarian Assistance Popular Front for the Liberation of Palestine

Abbreviations PLC PLO PNA PNC PNF PCP PSL QIZ RCAS RCC RFFG ROY RWB SANG SAP SCR SMEs SOCAL SPFS SPLA SPLM SPS SSLA SWFs TAL TBT TFP TRIMs TRIPS UAE UN UNCAT UNDP UNEF UN ESCAP UNESCO UNHCR UNRWA US(A) USAID USMTM VAT WGI WML WTO

Palestine Legislative Council Palestinian Liberation Organization Palestine National Authority Palestine National Council Palestine National Fund Popular Congress Party (Sudan) personal status law qualified industrial zone regional conformity assessment scheme Revolutionary Command Council Reserve Fund for Future Generations Republic of Yemen Reporters Without Borders Saudi Arabian National Guard structural adjustment packages Supreme Council of Rulers (UAE) small and medium-sized enterprises Standard Oil of California Special Programme for Food Security Sudan People’s Liberation Army Sudan People’s Liberation Movement Sanitary and Phytosanitary Standards Southern Sudan Legislative Assembly Sovereign Wealth Funds Transitional Administrative Law Technical Barrier to Trade total factor productivity Trade-Related Investment Measures Trade-Related Aspects of Intellectual Property Rights United Arab Emirates United Nations UN Committee Against Torture UN Development Programme UN Emergency Forces United Nations Economic and Social Commission for Asia and the Pacific UN Educational, Scientific and Cultural Organization UN Refugee Agency UN Relief and Works Agency United States (of America) United States Agency for International Development US Military Training Mission value-added tax Worldwide Governance Indicator World Muslim League World Trade Organization

xxv

Part I

Overview

Chapter 1

Governance-constrained growth in the MENA region Robert E. Looney

I would suggest that the rate at which countries grow is substantially determined by three things: their ability to integrate with the global economy through trade and investment; their capacity to maintain sustainable government finances and sound money; and their ability to put in place an institutional environment in which contracts can be enforced and property rights can be established. I would challenge anyone to identify a country that has done all three of these things and has not grown at a substantial rate.1 The importance of institutions to a country’s economic growth and development has become almost axiomatic. Indeed you would be hard-pressed to find a recent research paper on economic growth and development which does not spotlight institutions—the set of rules that govern the relationships between actors in the economy—as fundamental for economic performance, through their influence on the incentives for saving, investment, production and trade.2 when the ambition of regimes tends to be overwhelmingly the perpetuation of the current system of government, longer-term exigencies are often relegated to a secondary order of importance. As we found under any totalitarian system, these tendencies eventually lead to broad underperformance in the [MENA] region’s economies with real incomes failing to grow at anything comparable to the experience of other emerging markets.3

Introduction The acknowledged importance of good governance and institutions in supporting growth and development around the world is beginning to have a marked impact on economic thinking across the Middle East and North Africa (MENA) region. While their intrinsic value as ends of development in their own right is now universally accepted, it has been only recently that improved governance, together with sound institutions, have been seen by the region’s policy-makers as having a central role to the process of economic growth and development. Still, there are many gaps in understanding the growth and development process. Despite the new focus on governance and institutions as a means to better growth performance, it is not entirely clear how this prescription translates into short- to medium-term policy priorities and actions, especially for the MENA region’s institutionally weaker and low-income countries. Is the MENA region unique in its pattern of governance? If so, do these differences together with the region’s high levels of defence expenditure and violence alter many of the governance growth patterns found elsewhere?

4 Robert E. Looney The objective of this chapter is to partially fill this gap in the literature by examining the governance-growth relationship in the MENA region. It begins with a brief overview of MENA’s recent growth experience relative to other parts of the world. As a prelude to our examination of the role played by governance in affecting these growth patterns, the next section provides a brief review of the theoretical literature linking governance to economic growth and deployment. This is followed by an examination of the region’s progress made to date in improved governance. After a discussion of the existing empirical literature on the governance-growth linkages in the MENA region, a framework is developed for identifying governance constraints. A final section sums up the role of governance reform as a means of possibly sustaining the region’s growth and development.

Economic growth in the MENA region In assessing the linkages between governance and growth performance in the MENA region, it is important to note first that the countries in this part of the world share a number of common features. These include the effects of the Arab-Israeli conflicts, the Iran-Iraq War, the Gulf War, the post-Saddam conflict in Iraq, oil price volatility, the rise of Islamist fundamentalism, and Islamic-based institutions setting rules for a wide variety of practices.4 However, the region’s countries also differ in a number of important respects, all of which will affect individual country growth patterns irrespective of the level of governance. Key differences include: geographic size; population density; amount of cultivable land; extent of globalization; extent of reserves of oil and other natural resources; income and wealth; ethnic, religious and linguistic diversity; and vulnerability to civil and international wars and other conflicts.5 MENA countries also vary tremendously in their scores on numeral institutional indexes. For example, in the World Economic Forum’s competitiveness reports,6 countries are ranked with respect to technological infrastructure, the quality of public institutions and the macroeconomic environment, all of which affect the environment for business competitiveness and economic growth. Significantly, MENA countries score relatively low in these critical areas. In particular, the larger MENA countries all score below the average of the 102 countries listed in the index. In the last several decades these sets of forces have combined to produce sub-optimal patterns of economic growth.7 Despite MENA’s generous endowment of natural resources, the area as a whole has experienced the weakest real per capita growth performance of all regions in the world, with the possible exception of sub-Saharan Africa. Not only has growth been disappointing, given the region’s potential, but it has also contained an element of instability due in part to the high volatility of oil and commodity prices. Still, there are encouraging signs. Real per capita gross domestic product (GDP) growth rates (see Figure 1.1 and Figure 1.2) have picked up over the past decade. However, in the period since 1998, emerging market economies in Asia and in Central and Eastern Europe have continued to perform significantly better, while sub-Saharan Africa has achieved an even more impressive acceleration in real per capita GDP growth.8 As the sections below attempt to demonstrate, many of these differences in the regional patterns of growth are linked to the relative progress made in improved governance.

Governance-constrained growth in the MENA 6

5

1978-1987 1988-1997 1998-2007

5

4

3

2

1

0

-1

MENA

Latin America

Central & Eastern Europe

Asia

SubSaharan Africa

Figure 1.1 GDP per capita (%) Source: World Bank, World Development Indicators database

Governance and the deep determinants of growth The increased interest in the economics literature over the role of governance and institutions can be viewed as part of an ongoing search for the ‘deep determinants’ of economic growth and development. To a large extent, this can be traced to a growing dissatisfaction beginning in the late 1980s with what was until then the preeminent ‘neoclassical’ paradigm introduced independently in the 1950s by Robert Solow9 and Trevor Swan.10 This model assumes that growth is caused by capital accumulation and exogenous rates of change in population and technological progress. These factors alone are assumed to account for the observed patterns of long-run national economic growth.11 A unique feature of the neoclassical model is that it predicts all market-based economies will eventually reach the same constant growth rate if they have the same rate of technological progress and population. Most importantly, in the current context, the model assumes that the long-run growth rate is out of the reach of policy-makers. The main limitation of the neoclassical model is its inability to account for a large share of observed growth—the residual. This difficulty led to a reconsideration of the concept of the ‘factors of production’ to include human capital,12 and in the late 1980s and early 1990s the

6 Robert E. Looney 5

1978-1987 1988-1997 1998-2007

4 3 2 1 0 -1 -2 -3

ALG

EGY

PAK

JOR

LBN

MAR

SYR

TUN WBG

Figure 1.2 GDP per capita growth rate (%) Note: ALG = Algeria, EGY = Egypt, PAK = Pakistan, JOR = Jordan, LBN = Lebanon, MAR = Morocco, SYR = Syria, TUN = Tunisia, WBG = West Bank and Gaza. Source: World Bank Development Indicators database

development of endogenous growth models to incorporate the level of technology and the rate of innovation.13 The proliferation of endogenous growth models began with the work of Romer.14 Romer observed that the neo-classical growth models failed to reconcile its predictions of convergence (lower per capita income