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Why “underdevelopment” in the Middle East?The strengths and limitations of oil, Islam, corruption and other
hypotheses
Prof. M. CammettPOLS1270
April 5, 2012
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?
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)
Control o
f Corru
ption
Govt. Effecti
veness
Rule of Law
Voice &
Accountab
ility
0102030405060708090
100
Middle EastEast AsiaLatin AmericaSouth AsiaSub-Saharan AfricaOECD
Authoritarianism and Underdevelopment in the MENA
MENA exceptionalism: “Voice & Accountability”
Logic : How might authoritarianism hinder development?
Campaign posters for Gamal MubarakEgypt, Sept. 2010
Authoritarianism & Underdevelopment?
• Mixed Evidence: – East Asia– Latin America– Russia, etc.
• Regime type v. governance