Modernization, Democracy, and Islam

By Shireen T. Hunter; Huma Malik | Go to book overview

10
The Political Geography of the Arab
Private Sector

Giacomo Luciani

The question of the relationship between the economic foundations of societies and states and the nature of their political systems, notably democracy and dictatorship, has long been debated. Also, a connection has often been made between economic and political liberalism, on the one hand, and direct state intervention in the economy and authoritarianism, on the other. However, historical experience has often contradicted such direct linkage, as several democratic states have pursued economically interventionist policies, while many authoritarian regimes have adopted economic liberalism.

A connection has also been established between the prevailing mode of production and the political order, ranging from Wittfogel's hydraulic societies to the role of latifundia or other land ownership patterns to the impact of information and communication technology (ICT).1 Following this tradition, some authors, using the concept of petro-states or petro-monarchies, have linked the nature of political order to the role of oil in the national economy.2

This chapter, however, will not focus on either of these linkages; rather, it will emphasize the fiscal foundations of the state, namely, who pays for the state and how, and how the state obtains the means to cover its budget. The hypothesis here is that the political order is closely connected to the relative size and structure of the state budget. In other words, the existence of a certain type of political order is a prerequisite for a certain budget size and structure. Similarly, the latter may validate and consolidate the political order with which it is most compatible. This connection is particularly clear in the case of the rentier states. Within this broad context, this chapter will address three additional points, namely, (1) the new political geography of the Arab private sector in parts of the Arab world; (2) emerging shifts in the equilibria that existed between the state and the private sector and supported authoritarianism; and (3) how these shifts

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