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A New Arab Social Contract? pp 35–90Cite as

Socio-economic Regulation in Core Arab Economies: Institutional Contexts for Economic Reform

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Abstract

The chapter introduces theories dealing with socio-economic regulation and consolidates them into an integrated regulation framework. Further, the chapter focuses the framework on the context found in core Arab economies with their specific structural economic challenges.

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Notes

  1. 1.

    The cross-country media scene in the Arab world can be seen, for instance, in the rise of satellite television channels such as Al Jazeera or Al Arabiyya (e.g., Lynch 2014: 378, 389), the popular casting show “Arab Idol,” or the transnational appeal of Egyptian or Lebanese-produced television series or music.

  2. 2.

    While the NIS approach has been adapted to subnational contexts by analyzing regional innovation systems (e.g., Bathelt and Glückler 2012: 421–423), a cross-national perspective on NIS and their elements (as might be interesting in the context of Arab countries) has not been figured yet prominently in the NIS literature.

  3. 3.

    Historically, Rivlin (2009: 290) suggests that a sense of shared identity across Arab populations may be, at least in part, based on the common history during the Arab and Islamic empires under the Umayyad and Abbasid dynasties.

  4. 4.

    The critique brought forward here can be applied to the regulation school, too, as far as the regulation school refers to “cultural” aspects of nationally bounded regulation. However, unlike the NIS approach with its explicit focus on national systems of innovation, the regulation school is conceptually open to integrating socio-institutional framework conditions defined in a cross-national context.

  5. 5.

    Such a type might presumably exhibit some common features with Arab economies, notable in the Maghreb (Benner 2015).

  6. 6.

    Globalization is a highly vague term that calls for a rigid definition of what precisely it encompasses. The term “neoliberalization” (Peck and Theodore 2007: 756) is particularly fuzzy and lacks a commonly accepted definition, despite it being widely used in the public discourse and media.

  7. 7.

    Hertog (2016: 4) briefly summarizes a few attempts to extend the VoC perspective to developing countries and applies the perspective to Arab economies. Apart from these attempts, the VoC school mostly focuses on industrialized countries.

  8. 8.

    The opposite case of institution-substituting rules is not considered here because of its unlikelihood and lack of empirical validity (Glückler and Lenz 2016: 268).

  9. 9.

    The designation of business improvement districts including the concomitant funding arrangements is a good example for institution-circumventing rules because they are meant to counter institutionally based trading-down processes in urban quarters. Public law tourism associations promoting or upgrading tourist destinations through obligatory membership fees (e.g., in Austria) follow a similar logic.

  10. 10.

    State interventionism was a widespread tendency over much of the MENA region, at least for some decades during the twentieth century. Richards and Waterbury (2008: 180–209) cite examples not only from Arab economies but also from Iran , Turkey , and Israel , with Lebanon apparently being the exception.

  11. 11.

    For instance, Amin et al. (2012: 87) state that in Egypt food subsidies account for 2% of GDP, while fuel and electricity subsidies account for 6% of GDP.

  12. 12.

    Lebanon is the major exception (Hertog 2016: 25).

  13. 13.

    Interestingly, the desire to attain government jobs increases with educational attainment in Tunisia, while it decreases significantly in Jordan (Hertog 2016: 25).

  14. 14.

    The following discussion offers a stylized characterization of socioeconomic regulation in core Arab economies without considering in detail the variation between core Arab economies. While variation can be extensive between countries, the discussion focuses on generally observable common features shared by most Arab economies (excluding special cases such as present-day Syria , Libya , or Yemen ). To account for specifics of regulation in a particular economy, a detailed refinement will be necessary, as is attempted here for the cases of Tunisia and Jordan in Chap. 4.

  15. 15.

    High youth unemployment does not only complicate the transition from education to work but also the transition to forming an own household since in Arab economies the prospects for marriage and founding an own family is related to employment (Amin et al. 2012: 57), underscoring the wider socio-institutional effects of a salient economic phenomenon such as unemployment and its wider implications for socioeconomic regulation. The common expectation for young people to be gainfully employed before marrying can well be understood as an institution.

  16. 16.

    When it comes to restrictive labor laws, one might expect a range of rule-circumventing institutions to deal with stringent regulations. One interesting example for a rule-circumventing institution on a highly regulated labor market is the one cited by the World Bank (2009: 32) quoting a Syrian businessman’s approach in countering legal constraints to dismissing workers by requiring employees to sign an undated resignation letter upon recruitment.

  17. 17.

    Rivlin (2009: 55–59) lists some exceptional cases featuring strong merchant middle classes in Arab economies, the most important being Lebanon .

  18. 18.

    Libya , Yemen , and Syria where initial revolutionary upheavals eventually turned into civil wars are not dealt with here.

  19. 19.

    There are examples for policies promoting entrepreneurship and knowledge transfer in the humanities (e.g., OECD 2015a).

  20. 20.

    For example, Felsenstein (1994: 107) finds evidence for the argument that “technical knowledge without business skill does not necessarily make for innovatively successful products or firms.”

  21. 21.

    Such a dual-study model was established at Al-Quds University in the West Bank and supported by German technical cooperation (Al-Quds University 2016). The author was involved in this project as a consultant. Another example for a scheme similar in its intention is the study model implemented by the German-Jordanian University that includes obligatory internships in Germany.

  22. 22.

    In Tunisia, for example, the practically oriented higher educational entities called ISET (Institut supérieur des études technologiques) (Ben Miled-M’rabet n.d.; Erdle 2011: 29) may offer suitable conditions for setting up dual-study programs.

  23. 23.

    Strictly speaking, entrepreneurial activity and knowledge or skills transfer by members of the diaspora would be part of the regime of accumulation and, if successful, strengthen innovative and entrepreneurial dynamism and thus Schumpeterian creative destruction.

  24. 24.

    Methodologically, in elaborating the new regulation regime proposed here, the approach was not to define a new regulation regime and then to claim its consistency and sustainability but to ask how elements of the regulation regime would have to look like to be consistent with each other and sustainable over the long term and then proposing elements of a new regulation regime and policy actions to facilitate the transition accordingly. This is why consistency and sustainability are the primary assumptions behind the new regulation regime suggested here. However, the proposed regulation regime is only a scenario, while other ones, too, are possible.

  25. 25.

    For example, politically set normative first principles can refer to the desirability of a rise in living standards, income, employment, or other indicators of economic or human development.

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Benner, M. (2020). Socio-economic Regulation in Core Arab Economies: Institutional Contexts for Economic Reform. In: A New Arab Social Contract?. Economic Geography. Springer, Cham. https://doi.org/10.1007/978-3-030-19270-9_3

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