Wednesday, February 17, 2010

Jared Diamond on why democracy doesn't exist in the Arab world (pdf):
If the problem is not economic level, maybe it is economic structure. Of the sixteen Arab countries, eleven are “rentier” states in the sense that they depend heavily on oil and gas rents (in essence, unearned in- come) to keep their states afloat. These eleven states derive more than 70 percent (in some cases more than 90 percent) of their export earn- ings from oil and gas. Most are so awash in cash that they do not need to tax their own citizens. And that is part of the problem—they fail to develop the organic expectations of accountability that emerge when states make citizens pay taxes...

Oil states are not merely big—they are heavily centralized too, since oil wealth accrues to the central state. They are usually also intensely policed, since there is plenty of money to lavish on a huge and active state-security apparatus. They are profoundly corrupt, because the money pours into central-state coffers as rents, and it is really “no- body’s money” (certainly no one’s tax money), so it is—in a warped normative sense—“free” for the taking. In these systems, the state is large, centralized, and repressive. It may support any number of bloated bureaucracies as de facto jobs programs meant to buy political peace with government paychecks. Civil society is weak and coopted. And what passes for the market economy is severely distorted. Real entre- preneurship is scarcely evident, since most people in “business” service the state or its oil sector, or otherwise feed off government contracts or represent foreign companies.

A very tempting analysis, but how does it explain those Arab countries which have no oil wealth, yet still remain highly autocratic (Egypt, Jordan or Morocco)?
Since 1975, U.S. “development” assistance to Egypt has totaled more than $28 billion, not including the nearly $50 billion that has flowed to that country in uncondi- tional military aid since the 1978 Camp David Peace Accords. Less well known is the huge flow of U.S. economic and military aid to the much less populous state of Jordan, which has taken in an average of $650 million per year since 2001. “Western aid makes possible the regime’s key politi- cal strategy of spending massively on public jobs without imposing steep taxes. From 2001 through 2006, the foreign assistance that Jordan raked in accounted for 27 percent of all domestic revenues.”21
Copyright © Swing Right Rudie
A notebook to myself