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"Fire in Cairo": Authoritarian-Redistributive Social Contracts, Structural Change, and the Arab Spring

Author

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  • Eric Rougier

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

Abstract
Around 2011, several Middle-East and North-African (MENA) previously stable regimes have been challenged, sometimes violently, by unprecedented waves of civil protests. The so-called "Arab Springs" have generally been motivated by the growing gap between young adults' aspirations to climb up the social ladder and the dearth of socioeconomic opportunities consecutive to the slow pace of structural change featured by the economies of the region. The present paper argues that this slow pace of structural change, measured by export sophistication and diversification, may well be the consequence of the authoritarian-redistributive social contracts that were established after the Independence and were subsequently only marginally reformed. MENA social contracts are generally described as political bargains by which socioeconomic security, based on high levels of redistribution and state control of the economy, were traded against the absence of political freedom. We show in this paper that although redistribution and political authoritarianism have an impact on structural change, by their own, their combination certainly explains the deficit of structural transformation of MENA economies. More specifically, we provide cross-sectional and dynamic-panel evidence that the positive impact of redistribution on structural change, measured by export diversification and sophistication, vanishes for the very high levels of authoritarianism characterizing the MENA region. Our results hold for different specifications of the estimated equations and of the social contract variable, as well as when endogeneity issues are addressed. The paper finally describes the political economy that sustained, over the last three decades, this combination of political authoritarianism and slow productive diversification and sophistication throughout the region, before explaining how these features could well have inhibited the political capacities and willingness of most MENA incumbent regimes to reform the social contract in a radical and timely manner.

Suggested Citation

  • Eric Rougier, 2016. ""Fire in Cairo": Authoritarian-Redistributive Social Contracts, Structural Change, and the Arab Spring," Post-Print hal-02486350, HAL.
    • Handle: RePEc:hal:journl:hal-02486350
    DOI: 10.1016/j.worlddev.2015.10.005
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    More about this item

    Keywords

    Political Economy; Socioeconomic Status; Economic Diversification; Export; Middle East And North Africa; Authoritarianism; Cairo [Egypt]; Egypt; Export Diversification; Middle East Political Economy Popular Protest; Redistribution; Reform Process; Regional Economy; Social Contract; Social Security; Structural Change;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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