Why “underdevelopment” in the Middle East? The strengths and limitations of oil, Islam, corruption and other hypotheses Prof. M. Cammett POLS1270 April 5, 2012

From Ottoman-Era Glory to Relative Decline in the Middle East

Proximate Causes Weak integration in the global economy Low private investment Lack of technological development Industrial non-competitiveness High costs of doing business Poor educational systems, underdeveloped human capital

Deeper Causes: Competing Explanations Oil and the “Resource Curse” Islam, Islamic institutions Colonialism Corruption and Crony Capitalism Authoritarianism

Oil and the “Resource Curse” Resource wealth  poor economic outcomes – “Dutch Disease” – Rentier states and non- productive economies

The Resource Curse: Critiques Variation in oil-rich countries (Norway v. UAE v. Indonesia v. Algeria) Timing of institution building vis-à-vis influx of windfall profits Hertog: Populism and state autonomy Is oil wealth convincing?

Islam v. Islamic Institutions Islam as a religion Islamic institutions (not Islam per se) Islamic waqfs, corporate forms, inheritance laws  disperse wealth  inhibit investment

Do Islamic institutions explain underdevelopment in the MENA? Direction of causation? De factp choice/flexibility in corporate forms Ottoman policies, not Islamic institutions? Colonial and post-colonial policies Variable trajectories within the Islamic world Trajectories in the Middle East v. non-Muslim regions of the Global South?

Colonialism

Colonial Governance in the MENA Capitulations Colonial domination of productive, lucrative activities Minimal investment in public welfare & infrastructure Limited indigenous control over economy, policies Legacies for state-building Limitations of “blaming” colonial rulers?

Corruption & Crony Capitalism The logic of the argument: Why corruption is bad for development Is the MENA especially corrupt? Is corruption bad for development?

Corruption and Other Aspects of Governance in Cross-National Perspective (2008)

Authoritarianism and Underdevelopment in the MENA MENA exceptionalism: “Voice & Accountability” Logic : How might authoritarianism hinder development? Campaign posters for Gamal Mubarak Egypt, Sept. 2010

Authoritarianism & Underdevelopment? Mixed Evidence: – East Asia – Latin America – Russia, etc. Regime type v. governance

Towards an Explanation... Historical legacies + Post-independence policies