middle east
Locked Out of Development: Insiders and Outsiders in Arab Capitalism – review
In Locked Out of Development: Insiders and Outsiders in Arab Capitalism, Steffen Hertog critiques mainstream development models in the Middle East, focusing on state intervention and segmented market economies. Although Yusuf Murteza suggests the book under-examines neoliberalism’s prevalence, he finds its analysis on the state’s role in establishing the insider-outsider division in the economy nuanced and valuable.
Clusters of economic and political theorists have long been discussing how different actors prioritise and frame their understanding of “development”. Post-development and degrowth scholars such as Arturo Escobar, Gustavo Escobar, Wolfgang Sachs, and Jason Hickel announced the death of the mainstream development model as a project. They argued “the project of development” may not be equally beneficial to all societies, since the project carries ethnocentric and universalist dimensions which contribute to the hegemony of the West.
The ‘one size fits all’ idea of neoliberal development, which utilises finance and corporate capital, has gradually been replaced by alternative forms of development
The “one size fits all” idea of neoliberal development, which utilises finance and corporate capital, has gradually been replaced by alternative forms of development. Growing disillusionment with the Anglo-Saxon economic model increased the importance of examining alternative political and economic configurations both inside and beyond developed Western states. Varieties of Capitalism (VoC) theory’s significance can be grasped with its emphasis on existing similarities and differences within the institutions of developed economies. Recently, scholars have taken these insights seriously and benefited from the VoC framework to explain the reasons why political and economic institutions differ across societies. Discourse on the MENA region in terms of democracy and development may suffer from orientalist explanations that directly link religion and culture to the region’s political and economic stagnation. Steffen Hertog’s Locked Out of Development takes issue with what mainstream development scholars consider the political and economic inability of societies in the Middle East to take the Western route and realise neoliberal reforms in order to ensure economic development, productivity and innovation.
Neoliberal narratives suffer from a partial outlook. They trace the failures of development attempts by focusing on policymakers’ level of adherence to marketisation and privatisation.
Hertog’s main arguments throughout the book are threefold. First, neoliberal narratives suffer from a partial outlook. They trace the failures of development attempts by focusing on policymakers’ level of adherence to marketisation and privatisation. They consider ensuring faith in the market mechanisms of production and distribution systems as paramount. However, non-economic, country-specific problems matter. In the case of the Arab world, the deep dividing line of insider-outsider segmentation across societies has more explanatory power than classical narratives of having too much or too little market (81). Second, Hertog believes a comparative perspective situated within a global context carries crucial insights. The selected countries cannot be examined solely by focusing on within-region differences but should be considered within the global development trajectory and compared with developed countries (7). Third, the role of the state has a somewhat ambiguous position in development theory. The concept of a “developmental state” has added a further twist. The characteristics of the state and its symbiotic relationship with labour and the private sector need to be addressed when explaining factors contributing to the persistence of the Arab world’s development problem (8).
The role of the state has a somewhat ambiguous position in development theory
Hertog begins with a detailed examination of academic literature on the political economy of the Middle East, the varieties of capitalism approaches, and his conceptualisation of segmented market economies (SEME). The second chapter adopts a historical perspective and presents the case selected countries’ political and economic transformations after World War II. In the third chapter, Hertog reveals his argumentation of the SEME framework by bringing the state, labour market, business sector and skill composition to light. Detailed analysis of the country case studies follows, accompanied by SEME and future research directions. Lastly, Hertog sums up the reasons for the political and economic inability of the region to take the Western route.
Hertog argues that the VoC approach, with its emphasis on the heterogeneity of existing capitalisms, is useful to explain the unique characteristics of Arab capitalism. Different compositions of firms, the finance sector, networks, and the skill system create ideal-type interactions (those which typify certain characteristics of a phenomena) and lead to diversification within capitalism. The original VoC approach analysed several OECD countries from the developed world. In time, scholars used the explanatory power of VoC to explain the development performances of non-Western countries with specific modifications. Taking insights from recent accounts of VoC literature, Hertog believes the approach fits the Arab world well (8).
In broad terms, the state [in the Arab world] functions as the voice of insiders’ interests to quash any outsider’s attempt to reconfigure access to key resources.
There are two key dynamics in the region. As the second chapter discusses, the state has been a key actor in structuring the playing field between different interests to operate in the region (9). The interventionist and distributive characteristics of the state go hand in hand with the other dynamic, namely the persistence of insider-outsider division in the economy. In broad terms, the state functions as the voice of insiders’ interests to quash any outsider’s attempt to reconfigure access to key resources. Hertog warns that the nuanced structure of the SEME model applies only to the core members of the region, such as Algeria, Egypt, Jordan, Morocco, Tunisia, Syria, and Yemen. The key filter behind this selection of countries is their state-building projects between 1950 and 1970 (4-5).
Strategies of keeping public sector employment high with military jobs, large redistribution policies, food subsidies, and price controls are still prevalent in the region, demonstrating its nationalist and statist legacy.
Hertog finds the roots of his SEME model in Arab nationalism in the post-independence era. The state-building projects of the selected countries fused with nationalist and statist ideologies at the time. Discussion on the region’s long history brings up the question of path-dependence, which is used to describe the limiting power of past decisions over later trajectories. Hertog avoids engaging with these long-term theories, believing them unsuitable for a short book, and the key characteristics of the SEME model originated recently. Nationalisation policies and active intervention in the economy were characteristics of Arab nationalism (15). In state-building projects, Egypt and Syria set the parameters, which were later copied by other states. Strategies of keeping public sector employment high with military jobs, large redistribution policies, food subsidies, and price controls are still prevalent in the region, demonstrating its nationalist and statist legacy (28).
The detailed empirical discussion of the SEME is at the heart of the book. The framework is constituted by the state, labour market, business sector and skill system (9). The distributive character of a state can be located by examining the share of public employment, which remains high from a global perspective. Also, the state extensively regulates labour markets, holding key strongholds to access land and credit (29-30). Hertog argues these factors lead to segmented labour and private sectors, while keeping the skill level low. The presence of the state in the labour market ensures insider-outside division. Since there is little mobility, insiders rarely lose their position. Outsiders cannot reach to the welfare protection schemes by the state. This leads to social exclusion and an unproductive environment (32-48).
Hertog claims state intervention in the private sector creates unique opportunities for crony networks, whereby politically connected companies benefit from credits and licences.
Similar dynamics take place in the business sector, where large firms and clusters of small firms coexist (55). Hertog claims state intervention in the private sector creates unique opportunities for crony networks, whereby politically connected companies benefit from credits and licences. Business actors with outsider status engage in unproductive small-scale activities (58-60). The skill system needs to be thought of in relation to the segmented labour and business sectors. Low skill levels prevent mobility and limit innovation and technological development (69).
Overall, Hertog argues that state intervention in the region establishes the insider-outsider division in the economy. Hertog’s emphasis on bringing the state back into the analysis is beneficial. In the field of comparative politics, the idea of the state as an autonomous actor remained on the margins until the 1980s. The book’s limitations come in two forms. First, it doesn’t mention how global capitalist relations fit into the SEME. Hertog’s defence with the limitation of economic globalisation in the region may not offer a solution, since the dynamics of global capitalist accumulation depend on drawing materials from peripheral countries without contributing to them. Second, Hertog’s claim of neoliberalism’s low presence in the Arab world is dubious. Several scholars (Jason Hickel, Philip Mirowski) argue that states with strong capacity can implement the necessary reforms for deregulation and privatisation. Thus, the presence of neoliberalism and strong state capacity is not mutually exclusive. In the Middle East, we see a unique mixture of neoliberal policy reforms with strong state capacity. Even though Hertog constructs his own case, adapting earlier approaches to VoC and development topics and to explain the MENA region, policymakers, development specialists, and academics will find dry economic analysis alone is not enough. More nuanced analyses that consider the symbiotic interactions between the state, the business sector, and labour force are necessary. Only by doing this is it possible to acknowledge how politics mingle with economics, and to design alternative development programmes in response.
This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.
Image Credit: AlexAnton on Shutterstock.
Novara interview on almost everything (e.g. Crisis, Democracy, Syria, Israel-Palestine, Journalism at gunpoint)
Ash speaks to Yanis Varoufakis and film director Raoul Martinez about their new film Eye Of The Storm: The Political Odyssey of Yanis Varoufakis, what the left got wrong after 2008 and the West’s complicity in the genocide happening in Gaza.
You can buy ‘In The Eye of the Storm: The Political Odyssey of Yanis Varoufakis’ at http://www.eyeofthestorm.info 00:00
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Introduction 00:30
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Eye Of The Storm 04:40
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The Financial Crisis 07:16
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Why Wasn’t Democracy Enough?09:12
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Syria and Optimism 12:38
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Should we Confront State? 16:50
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But What About Don’t Pay? 20:20
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Israel Is Killing Journalists 22:55
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Palestinian Resistance Is Unacceptable To The West 28:17
The Polycrisis Novara Live broadcasts every weekday from 6PM on YouTube and Twitch. Episodes of Downstream are released Sundays at 6PM on YouTube. Support our journalism by buying Novara Media merch: https://shop.novaramedia.com
The post Novara interview on almost everything (e.g. Crisis, Democracy, Syria, Israel-Palestine, Journalism at gunpoint) appeared first on Yanis Varoufakis.
PoliticsJOE interview on capitalism, technofeudalism, the Labour Party, Western Hegemony and Gaza
Sat down to discuss the downfall of capitalism and Western hegemony, the Labour Party’s shunt to the right, and the ongoing humanitarian crisis in Gaza. Also, we discussed Raoul Martinez’s documentary In The Eye of the Storm: The Political Odyssey of Yanis Varoufakis
The post PoliticsJOE interview on capitalism, technofeudalism, the Labour Party, Western Hegemony and Gaza appeared first on Yanis Varoufakis.
Bookies slash Galloway Rochdale odds to 2/1
Reaction against Labour candidate and warm welcome for Workers’ Party GB hopeful cuts odds from 16/1
Betting companies have slashed their odds against George Galloway winning the Rochdale by-election from 16/1 to 2/1 after the campaign saw the Workers’ Party GB candidate’s warm welcome contrast starkly with the hostile reception given to the Starmerite candidate, especially by local Muslims.
The phenomenon aligns with the catastrophic national fall in Labour Westminster voting intention among Muslims voters who voted Labour in 2019 – from 86% then to half that now – because of their outraged at Keir Starmer’s appalling support for Israel’s genocide and other war crimes in Gaza.
Not the Andrew Marr Show presenter Crispin Flintoff, who has been in Rochdale covering Galloway’s campaign, said:
I am still buzzing over what I saw around George Galloway’s campaign. There were hundreds of people at the launch and his campaign is extremely well organised. At the same time, other parties and candidates seem to be in disarray.
Starmer’s advisers have anonymously admitted that they fear the the impact of their enthusiasm for apartheid Israel, despite the ICJ’s findings against Israel for genocide, on the vote among Muslims and others horrified by the mass slaughter of Palestinians civilians in Gaza, mostly women – as well as the more general issue of the Labour right’s rampant Islamophobia and racism – and have already been proven correct in London boroughs and other areas after catastrophic local election results.
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Wars of De-Civilization
Syria, Ukraine, Nagorno-Karabakh and now Gaza: connecting all recent wars is disregard for national sovereignty as recognised by international law....
Fresh audio product: why did SA bring case against Israel, organizing amidst sprawl, the widening war in the Middle East
Just added to my radio archive (click on date for link):
February 1, 2024 Sean Jacobs explores why South Africa brought the genocide case against Israel • Eric Blanc (Substack post here) on organizing in a scattered and atomized society • Hassan El-Tayyab on the widening war in the Middle East
Afghanistan: Long War, Forgotten Peace – review
In Afghanistan: Long War, Forgotten Peace, Michael Cox brings together scholars to analyse the failure of Afghan state-building, the Taliban’s resurgence and the country’s future. Anil Kaan Yildirim finds the book a valuable resource for understanding challenges the country faces, including women’s rights, the drugs economies and human trafficking and exploitation. However, he objects to the inclusion of a chapter which makes a geographically deterministic appraisal of Afghanistan’s governance.
Afghanistan: Long War, Forgotten Peace. Michael Cox (ed.). LSE Press. 2022.
This book is available Open Access here.
In Afghanistan: Long War, Forgotten Peace, Michael Cox gathers scholars, policymakers, and public intellectuals to shed light on the factors contributing to the failure of Afghan state-building, the successful takeover by the Taliban, and to share some insights on the country’s future. The chapters in the collection impart valuable insights on international law, human trafficking, women’s rights, NATO, and the international drug trade, with the exception of one essay that uses a problematic framework in its analysis of Afghan statehood and seems out of place within the book.
One of the main tasks of any state-building process is to create a political sphere that includes all parties to decide on policies and strategies shaping the future of the country.
One of the main tasks of any state-building process is to create a political sphere that includes all parties to decide on policies and strategies shaping the future of the country. However, in the case of Afghanistan, as argued by Michael Callen and Shahim Kabuli in Chapter Three, the de facto power structure did not align with the de jure systems of institutions. Excluding the Taliban from political discussions, adopting a fundamentally flawed and exclusionary electoral system, and employing a centralised presidential system which did not correspond to Afghan “diversity and reality” have been the “three sins” of the Afghanistan project. Along with these mistakes, the authors also identify the issues that created a “dysfunctional” state-building, including the lack of complete Afghan sovereignty within regional power dynamics, the diversion of the US’s focus to Iraq, and other foreign influences such as Russia and China that tried to attract the power-holders of the country. This powerful essay points out the three sins in the creation of the structure and other dynamics that destabilised the country. Thus, the state-building project collapsed not because Afghanistan was unsuited to democracy, but because of a combination of many different mistakes.
The authors also identify the issues that created a “dysfunctional” state-building, including the lack of complete Afghan sovereignty within regional power dynamics, the diversion of the US’s focus to Iraq, and other foreign influences such as Russia and China
The role of women in the Afghan state-building effort is highly contested among different power holders, the international community, and the Taliban. Writing in this context in Chapter Six, Nargis Nehan explores the issue of women’s rights in Afghanistan before and after 9/11, positioning the matter within the spectrum of extremists, fundamentalists, and modernists. The highly masculinised country following many years of different wars created a challenging political and social area for women. Therefore, all changes in the political sphere resulted in a change in the lives of women.
Nargis Nehan explores the issue of women’s rights in Afghanistan before and after 9/11, positioning the matter within the spectrum of extremists, fundamentalists, and modernists.
As an internationalised state-building project, Afghanistan has challenged international institutions and norms. Devika Hovell and Michelle Hughes examine the US and its allies’ interpretation and application of international law in military intervention in Afghanistan. With discussion of several steps and actors of the intervention, they demonstrate how this operation stretched the definitions of self-defence, credibility, legal justification, and authority within international realm.
The book explores several other key problems in the country. These include Thi Hoang’s chapter on human trafficking problems such as forced labour, organ trafficking and sexual exploitation; John Collins, Shehryar Fazli and Ian Tennant’s chapter on the past and future of the international drug trade in Afghanistan; Leslie Vinjamuri on the future of the US’s global politics after its withdrawal from the state; and Feng Zhang on the Chinese government’s policy on Afghanistan.
The essays mentioned above demonstrate what happened, what could have been evaded and what the future holds for Afghanistan. However, the essay, “Afghanistan: Learning from History?” by Rodric Braithwaite is a questionable inclusion in the volume. By emphasising geographical determinism, this piece a problematic perspective on Afghanistan. The essay argues that the failure of the West’s state-building project was down to the “wild” character of Afghan governance historically, which he deems “… a combination of bribery, ruthlessness towards the weak, compromise with the powerful, keeping the key factions in balance and leaving well alone … (17)” or “… nepotism, compromise, bribery, and occasional threat” (26-27). This perspective paints a false image of how Afghan history is characterised by unethical, even brutal methods of governance. Also in this essay are many problematic cultural claims such as “… Afghans are good at dying for their country … (18).”
The limitation of the entire Afghan agency, history and political culture to a ruthless character and geography that always produces “terrible results” for state-building is a false narrative
The limitation of the entire Afghan agency, history and political culture to a ruthless character and geography that always produces “terrible results” for state-building is a false narrative, which is reflected in and supported by the postcolonial term for Afghanistan: the “graveyard of empires”. While many different tribes, states, and empires have successfully existed in the country, Western colonial armies’ defeats and recent state-building failures should not misrepresent the country as a savage place in need of taming. Rather, as the other essays in the book argue, research on these failures should examine the West’s role in precipitating them.
Not only does this piece disrespect the scholarship (including other authors of the book) by asserting the ontological ungovernability of the country, but its deterministic stance also disregards the thousands of lives lost in the struggle to contribute to Afghan life those who believed that the future is not destined by the past but can be built today. Additionally, using only three references (with one being the author’s own book), referring to the US as “America”, random usage of different terms and not providing the source of a quotation are all quite problematic for a lessons-learned-from-history essay.
Beyond the limitations of the essay in terms of how it frames the past, what is more damaging is the creation of a false image of Afghanistan for future researchers and policymakers. For the points mentioned above, including the false narrative of ‘graveyard of empires’, Nivi Manchanda’s Imagining Afghanistan: The History and Politics of Imperial Knowledge (2020) is worth consulting for in-depth insight into the colonial knowledge production system and its problematic portrayal of Afghanistan.
Braithwaite’s essay excepted, this book, exploring different political and historical issues from various perspectives, provides significant insights into what happened in Afghanistan and what the future holds for the nation
Braithwaite’s essay excepted, this book, exploring different political and historical issues from various perspectives, provides significant insights into what happened in Afghanistan and what the future holds for the nation. For practitioners, policymakers, and scholars seeking a broad perspective on state-building problems, policy limitations and relevant research areas in Afghanistan, this collection is a useful resource.
This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science. The LSE RB blog may receive a small commission if you choose to make a purchase through the above Amazon affiliate link. This is entirely independent of the coverage of the book on LSE Review of Books.
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Fresh audio product: Houthis, Hezbollah
Just added to my radio archive (click on date for link):
January 25, 2024 Shireen Al-Adeimi of Michigan State and the Quincy Institute, on the Houthis • political scientist Aurélie Daher with another view of Hezbollah
Parliament to reconvene to approve UK airstrikes on Yemen
As world unites in horror at Israel’s genocide, UK Establishment reaction is to protect Israel and billionaires by attacking country taking action for Palestinians
UDPATE: The UK is bombing Yemen tonight, without bothering to have Parliament approve it – and will recall MPs tomorrow to rubber stamp it. The UK is not at war with Yemen but is acting as a rogue state to protect Israel from the economic impact of the shipping interceptions.
The government is reconvening Parliament to push through a vote to approve airstrikes against Yemen, because of Yemen’s success in intercepting Israel-bound shipping to put pressure on Israel to end its genocide. The disruption to seaborne trade is said to be having a significant impact on the Israeli economy.
Commons Speaker Lindsay Hoyle has been taken to a Whitehall briefing tonight and is expected to recall MPs from their usual Friday activities away from Westminster to vote through the attacks – of course, ‘opposition’ leader and ‘Zionist without qualification’ Keir Starmer is fully expected to vote with the Tories.
With most of the world united in horror at the ICJ evidence of Israel’s genocide and war crimes against Palestinian civilians in Gaza, the UK Establishment reaction, always ready to side with the oppressor against the oppressed, is to protect Israel and billionaires by attacking a country to help Palestinians, regardless of the likely consequences of igniting a regional war.
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Israel planning to transfer Palestinians to Congo
Ethnic cleansing plans outed further but still ignored by western ‘mainstream’ media
Image: ActionAid
Israel is negotiating with Congo – it is unclear from reports which of the two neighbouring Congos – and other African nations to transfer the Palestinian people, according to reports in the Times of Israel and its sister site Zman Israel.
Both the Republic of Congo and the Democratic Republic of Congo (DRC) regularly see serious human rights violations, including massacres. A 2022 US Department of State report on human rights in the Republic, which is commonly known as Congo Brazzaville after its capital city to distinguish it from its neighbour – states that:
Significant human rights issues included credible reports of: unlawful or arbitrary killings, including extrajudicial killings; torture or cruel, inhuman, or degrading treatment or punishment by the government; harsh and life-threatening prison conditions; arbitrary arrest or detention; political prisoners or detainees; serious problems with the independence of the judiciary; arbitrary or unlawful interference
and more.
In the DRC, human rights groups have noted massacres and other human rights violations. Amnesty International said in 2022 that the DRC:
continued to experience serious human rights violations, including mass killings in the context of armed conflict and inter-communal violence, a crackdown on dissent and ill-treatment of detainees. People from regions affected by armed conflict, including eastern DRC, were particularly affected amid mass displacement and a deepening humanitarian crisis. The authorities continued to show a lack of political will to hold the perpetrators of human rights violations to account. The right to education was violated.
The Times quoted a ‘senior’ security cabinet source and comments by Israeli minister Gila Gamliel:
Israeli officials have held clandestine talks with the African nation of Congo and several others for the potential acceptance of Gaza emigrants.
“Congo will be willing to take in migrants, and we’re in talks with others,” a senior source in the security cabinet tells [journalist] Shalom Yerushalmi.
Yerushalmi quotes Intelligence Minister Gila Gamliel saying at the Knesset yesterday: “At the end of the war Hamas rule will collapse, there are no municipal authorities, the civilian population will be entirely dependent on humanitarian aid. There will be no work, and 60% of Gaza’s agricultural land will become security buffer zones.”
The UK government has disgraced itself by continued attempts to transfer desperate refugees to Rwanda, attempts continually blocked by the courts – but the Israeli regime was the first to do it, sending around 4,000 Black refugees fleeing war in Eritrea and Sudan to Rwanda between 2013 and 2018 before discontinuing what it called ‘voluntary’ departure – similar to the ‘voluntary emigration’ euphemism it uses for its ethnic cleansing plan, alongside ‘humanitarian migration’.
Israel has an appalling record toward Black people, even Black Jews – and last year threatened to deport them, too. The SAGE Race & Class Journal notes that:
Ethiopian Jews who have been brought into Israel in several mass transfer operations, have found themselves relegated to an underclass. They are not only racially discriminated against in housing, employment, education, the army and even in the practice of their religion, but have also been unwittingly used to bolster illegal settlements.
Now, as well as the already-outed plan to force huge numbers of Palestinians out of Gaza into the Egyptian desert, Israel is actively working on plans to force more out of the Middle East altogether and into Africa. The Israeli regime’s war crimes continue to pile up.
Despite the similarities with the UK’s racist government, at the time of writing the UK’s so-called ‘mainstream’ media have not reported Israel’s plan – as has been the case with much of Israel’s racism and criminality.
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