Business-State Relations after Liberalization in Jordan

Abstract

In the mid-1980s Jordan began steps toward economic restructuring and reform. In 1989 the state formally introduced political liberalization by holding the first parliamentary elections in over 20 years. These events, and analogous ones in the developing world, generate expectations for changes in the way classes and groups deal with the state. For this chapter, the focus is on change in state-business relations. There are generally three expectations regarding this relationship and its potential impact on political liberalization/democratization. First, state disengagement from its dominant economic role allows greater policy involvement by the private sector and its associations. Private sector elites then utilize this access to block further political liberalization that would endanger (i.e. greater access for labor) their capital positions.² A second expectation suggests — whatever business’s political intentions — that the greater accountability won through increased private sector involvement can have “positive externalities” for other social groups.³ Accountability is, in other words, fungible. Third, state divestment leads to a closer and more amiable relationship between the state and the private sector. This new pact would lead to increased private sector influence over national economic policy, providing crucial support for the economic future of political liberalization.⁴