Arab Political Economy Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

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The Arab political economy revolves around three main axes: (1) economic growth and structural transformation (developments in different sectors of the economy), (2) state structures and economic policy, and (3) domestic socioeconomic actors. Beginning in the seventeenth century, the Arab world has been drawn into a global economy dominated by the European powers. The need of the Ottoman Empire (1299–1922) to raise revenues to support its administrative and military reforms resulted in the introduction of private property. As a result, over time local notables and tax collectors gained the rights to enough property to allow some to establish commercial estates equivalent to large commercially owned farms. These estates propelled agricultural export trade with Europe and the Arab world’s subsequent integration into the global economy.

A series of Ottoman reforms in the 1800s, which were practiced in other Arab countries such as Morocco, further entrenched the institution of private property in the empire.

Tax collection and administration were reformed so that more revenues could be absorbed by the central state, and these reform efforts had as a direct consequence the rise of a propertied elite that was shaped by agricultural export growth. Agriculture also attracted large sums of foreign investment into the empire, making this sector the most important in shaping the political-economic landscape of the Arab world during this period.

After the collapse of the Ottoman Empire, the colonial state was introduced into the Arab world, with repressive apparatuses strengthened by European support that allowed these states to enjoy relative autonomy in relation to society. These structures gave rise to further capitalist reforms throughout the Arab world. During colonialism, public education and public service were introduced into the Arab political-economic sphere. Owing to these reforms, in the 1930s a professional— but not propertied—middle class emerged. Thus the colonial state entrenched the interests of the landowning classes while introducing this new middle class.

The postcolonial state in the Arab world, emerging from independence movements in the 1950s and 1960s, featured dramatically altered political-economic patterns. A process of radical class restructuring occurred through which the historically marginalized groups—workers, farmers, and small landowners—were integrated into the postcolonial state’s economic policy planning, while the historically advantaged groups—large land-owning elites—faced economic discrimination. Varying policies of agrarian reform and import substitution industrialization (ISI) benefited the formerly marginalized groups and shored up the new middle class though mass education and bureaucratic expansion. The postcolonial state, underpinned by ISI policies, created and absorbed the major productive, commercial, and financial assets of the countries into the state structure.

The introduction of oil revenues throughout much of the Arab world further concentrated political and economic power into the state, allowing the state to foster a new elite that would be dependent on the distribution of oil revenues. This also introduced the “Dutch Disease,” the exploitation of natural resources at the expense of the development of a manufacturing sector. Taken together, these processes gave rise to the emergence of rentier states, states that derive a substantial amount of revenues from the rents of one resource, and this arrangement has shaped state-society relations since the 1960s.This form of corporatism has functioned to subordinate various socioeconomic groups to the state, precluding the potential for effective class-based political opposition. As a result, throughout the Arab world political and economic power remains concentrated in the hands of those actors that are embedded in the state’s corporatist mosaic.

The gradual transition away from state-led development toward market-led growth has seen the rise of economic actors that have directly benefited from economic liberalization policies enacted since the 1990s. Contemporary political-economy landscapes are shaped by these liberalization policies and also by a number of socioeconomic challenges. Demographically, the Arab world is one of the youngest regions in the world. As populations grow, urbanization rates are increasing rapidly. The collapse of state-led development and a growing, urbanized population has meant that unemployment is increasing throughout the region, particularly among youth. Additionally, the pressures of democratization are echoed both from within by domestic actors and from without by Western countries. Emerging sectors such as tourism and finance have begun to displace traditional export sectors in some countries, particularly the Gulf Arab countries. Finally, the challenges of regional and global integration will serve as the context in which future Arab political-economic landscapes will be shaped.

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