A New Arab Social Contract?: Institutional Perspectives For Economic Reform In Arab Countries (economic Geography)

This monograph offers a unique conceptual bridge between economic geography and Middle Eastern political economy. Arab economies are confronted with enormous structural difficulties such as high rates of youth unemployment in a challenging demographic context, exacerbated by intense spatial disparities. These structural problems demonstrate the breakdown of the "Arab social contract", a social arrangement centered on a strong role of the state in welfare and employment provision, for which regimes demanded acquiescence to authoritarian rule. The book argues that the Arab social contract can be understood in terms of regulation theories known in economic geography and sociology. It uses the approaches such as the regulation school, national systems of innovation, social systems of production, and varieties of capitalism to analyze the structural difficulties of Arab economies and current reform efforts. The basic assumption is that Arab economies are currently faced with a structural crisis. After the breakdown of the Arab social contract, there is a mismatch between the economic and institutional spheres of society. The challenge is for Arab societies to develop new forms of socio-institutional regulation. The book proposes ways towards such new modes of regulation by developing a framework for regulation specifically targeted towards Arab societies, and by applying it to the cases of Tunisia and Jordan. Dedication 6 Preface 7 References 8 Contents 9 Abbreviations 11 Chapter 1: Middle Eastern and North African Economies After the “Arab Spring” 15 References 21 Chapter 2: Economic Challenges in Arab Economies 22 2.1 Structural Growth Problems in Arab Economies 23 2.2 The Collapse of the Arab Social Contract 26 2.2.1 The Arab Social Contract and the Authoritarian Bargain 28 2.2.2 Economic Inefficiencies of the State-Driven Growth of the Arab Social Contract 31 2.2.3 Demographic Change: The “Youth Bulge” and Aging Societies 36 2.2.4 Youth and Women’s Unemployment in MENA Countries 37 2.2.5 The Labor Market Mismatch: Education and Youth Unemployment 41 2.2.6 The Territorial Dimension: Spatial Economic Disparities 42 2.3 Private-Sector Growth and Entrepreneurship: Towards a Socio-economic Perspective of Economic Reform 43 References 45 Chapter 3: Socio-economic Regulation in Core Arab Economies: Institutional Contexts for Economic Reform 48 3.1 Theoretical Approaches of Regulation 50 3.1.1 Regulation School 50 3.1.2 Social Systems of Production 53 3.1.3 National Systems of Innovation 55 3.1.4 Varieties of Capitalism 58 3.1.5 Inclusive and Extractive Institutions 61 3.2 Towards a Synthesis of Regulation Approaches 63 3.3 Socio-economic Regulation in Core Arab Economies 68 3.3.1 The Arab Social Contract as a Mode of Regulation 69 3.3.2 Regulation in Arab Economies: What Role for Creative Destruction? 80 3.4 Alternatives for Socio-economic Regulation: Pathways Towards a New Arab Social Contract 83 3.5 Regulation in Core Arab Economies: From Theory to Empirics 97 References 99 Chapter 4: Case Studies 104 4.1 Tunisia 106 4.1.1 Tunisia’s Economic Challenges 106 4.1.2 Tunisia’s Economic Policies: Past and Present 110 4.1.2.1 Industrial Policy 111 4.1.2.2 Science, Technology, and Innovation Policy 115 4.1.2.3 Regional Structural Policy 120 4.1.2.4 Tourism Policy 122 4.1.3 Regulation in the Tunisian Economy 124 4.1.4 Entrepreneurship and Creative Destruction in the Tunisian Institutional Context 131 4.1.5 After the Revolution: A New Mode of Regulation? 134 4.2 Jordan 139 4.2.1 Jordan’s Economic Challenges 139 4.2.2 Jordan’s Economic Policies: Past and Present 141 4.2.2.1 Industrial Policy 143 4.2.2.2 Science, Technology, and Innovation Policy 146 4.2.2.3 Regional Structural Policy 150 4.2.2.4 Tourism Policy 153 4.2.3 Regulation in the Jordanian Economy 154 4.2.4 Entrepreneurship and Creative Destruction in the Jordanian Institutional Context 164 4.2.5 Perspectives for Regulation in Jordan: Continuity or Change? 166 4.3 Learning from the Tunisian and Jordanian Cases 169 References 172 Chapter 5: Towards Integrated Strategies to Promote Private-Sector Growth 179 5.1 From Old to New Modes of Socioeconomic Regulation in Core Arab Economies 179 5.2 A New Arab Social Contract? 182 References 187 References 190 Index 199 Front Matter ....Pages i-xiv Middle Eastern and North African Economies After the “Arab Spring” (Maximilian Benner)....Pages 1-7 Economic Challenges in Arab Economies (Maximilian Benner)....Pages 9-34 Socio-economic Regulation in Core Arab Economies: Institutional Contexts for Economic Reform (Maximilian Benner)....Pages 35-90 Case Studies (Maximilian Benner)....Pages 91-165 Towards Integrated Strategies to Promote Private-Sector Growth (Maximilian Benner)....Pages 167-177 Back Matter ....Pages 179-192