Governance and Economic Growth in the Arab Region

Introduction

The current political systems in the Arab world were affected by the revolutionary movement which emerged after independence in the 1950s and 1960s as result of either military coups or anti-colonial resistance, which tried to apply- at least at their earlier stages- some socialist ideology (Dabrowski, 2012). During the 1980s and 90s decades with some external factors, mainly, the demise of the Soviet Union, some of the Arab autocracies endeavored to apply minor official political reforms to promote modern citizenship concept through mechanisms of mass mobilization (political parties, trade unions, or civic associations). However, these reforms have been more in the spirit of “political liberalisation” and not genuine “democratisation”, through enforcing restrictions on political and civil rights to ensure they do not expand to levels that would allow the citizenry to exercise great collective control over public policy (Brynen et al., 1995). While some other states have remained full autocracies over the last 50 years such as Iraq, Libya, Saudi Arabia, Syria, and Sudan.

Therefore, many of these nations have built their modern political authority on patronage rather than on formal institutions, their external rents, and moral legitimacy providing authorities with efficient tools to subordinate and coerce the rest of the society (The Carrot and Stick Approach) (Izquierdo Brichs, 2012). The Arab countries sank into a trough in terms of the capacity of institutions due to not only the repression, dictatorships and absence of ‘state of law’, but also the autocratic regimes were associated with a high level of corruption. The ruling elites who control both the polity and key sectors of the economy exemplify an extraordinary level of corruption. They abuse formal and informal institutions to control the accumulation and distribution of resources and jobs to extend their power and amass illicit wealth.

According to Schlumberger (2004), political reforms are required and essential for all Arab countries and should be accompanied by economic reform programs. Although economic underdevelopment was one of the causes of the Arab uprising in 2011, state corruption and mismanagement, or both were the real reasons behind this underdevelopment. For instance, when Arab states have attempted to engage in the liberalisation and privatisation of their economies through structural reform programs, this liberalisation processes did not drive to create a sustainable development or even stable economic growth that could serve as the new beginning of legitimacy for the regime. Alternatively, poorly designed and inadequately implemented market reforms led to increasing the incidence of corruption and socioeconomic inequality, including creating a new class of super-wealthy entrepreneurs, many of them affiliated with government leaders’ families. Those political elites usually tend to prefer personal interest above the common good through accumulating financial wealth through monopolistic structures, which has become a major weapon to hinder or distort reforms.

Regardless of the different approaches used by institutional and commercial agencies, they all conclude that ACs are generally poor in all these indicators including the governance aspects in general and especially in democracy (Kaufmann et al., 2010; Marshall et al., 2012; PRS Group, 2011). According to the Freedom House (2015), the region as a whole had the worst civil liberties scores of any region, and most of its countries classified as partly free or not free. Arab nations are among the worst performers in estimates of global corruption perceptions index (CPI) (Transparency International, 2011). They also observed that corruption is the main challenge in the region, with three of the bottoms ten countries CPIs in 2014 coming from the region.