Authoritarian Regimes in the Middle East and Their Effect on Economic Development
The Middle East is a region that has faced numerous challenges to modernisation and liberalisation efforts. While reformist movements have been extremely prevalent throughout the region, such as the Arab Spring, which took place a decade ago, the momentum from these movements has often failed to garner meaningful and lasting change. One of the key challenges that the region faces is its economic development. Liberalisation efforts have taken place in the past, but have ultimately failed to bring about economic prosperity to the region’s population, and have seen much of the wealth generated in oil and gas-rich countries being primarily controlled by the state. The Middle East is a region that faces various economic challenges, and if major change is going to take place, these problems need to be addressed. Rather than viewing rentierism, unemployment, or private sector weakness as isolated problems, this essay will argue that it is authoritarian governance that binds and perpetuates them, thus making authoritarianism the greatest economic challenge to the Middle East. This essay will first explore how authoritarian regimes use rentierism to amplify clientelism, then examine how these practices stifle private sector development and economic reform.
Rentierism and Clientelism as a Tool of Authoritarian Regimes
A key characteristic of many Middle Eastern states is rentierism, an economic system in which a significant portion, if not most, of a country’s revenue is derived from the exportation of resources (Beblawi, 2015, pp. 385-386). For the Middle East, these resources are oil and gas, which are often in high demand globally, bringing in significant revenue to the state, allowing the state to fund itself without the need for taxation. This lack of taxation results in a lower demand for democratic reform, thus promoting authoritarian regimes. As a result, rentierism is often seen as a causal variable of authoritarian regimes and explains how they can persist in regions like the Middle East (Ross, 2011, pp. 344). However, this essay will not focus on the effects of rentierism as the greatest economic challenge, but will instead examine rentierism as a tool of authoritarian regimes to limit economic development and promote clientelism within a society. While others may argue that rentierism itself poses the greatest economic challenge to the Middle East, I argue that the economic challenges that come with rentierism are expanded upon by authoritarian regimes and can only be effectively addressed by regime change.
One of the key ways in which authoritarian regimes in the Middle East maintain their rule is through clientelism, a strategy which distributes resources based on connection with and loyalty to the state. In rentier states, this building of loyalty to the state through clientelism is significantly easier for authoritarian governments. As Hazem Beblawi (2015, pp. 386-387) writes in his article titled “The Rentier State in the Arab World”, “the conventional role of the state as provider of public goods through coercion - mainly taxation - is now blurred in the Arab oil states by its role as a provider of private favors through the ruler's benevolence.” When taxation is non-existent and wealth is controlled by a small group of elites, coercion through access to state funding becomes a key characteristic of these states, with very few checks and balances afforded to the general public. Ellen Lust (2023, pp. 327) talks about the effects that this has created throughout the region, writing in her book The Middle East, “across the MENA region, well-connected elites monopolized economic opportunities as governments ‘liberalized’ their economies.”
Clientelism has negatively impacted economic development throughout the region, specifically in rentier states, but this problem of state loyalty and networks extends beyond just rentier states. Before President Sisi came to power in Egypt, “crony capitalism,” as Lust (2023, pp. 330) discusses, was a major component of Egypt’s economy, with a select few gaining economic advantages through connections or direct government positions. In Egypt, President Sisi has relied on the military and public sector to facilitate economic stability, with the private sector continuing to struggle with development and growth (Lust, 2023, pp. 337). In Lebanon, sectarian divides throughout society have also created a system in which benefits are distributed through well-connected networks, as political groups like Hezbollah distribute resources on a loyalty basis to build public support (Blaydes, 2020, pp. 474-475). In both rentier and non-rentier states, the dominance of clientelism builds monopolistic markets and suppresses entrepreneurship, systemically undermining Middle Eastern economic development to reinforce authoritarian rule.
Authoritarian Regimes and Youth Unemployment
Authoritarian regimes have also played a key role in perpetuating the youth unemployment problem in the Middle East through state-dominated economies, misallocation of public resources, and suppression of reform movements. In the early 1990s, reform movements which gained significant international backing swept the Middle East, leading towards attempts at economic reform, switching from state-led development towards market-driven approaches with the goal of economic liberalisation (Lust, 2023, pp. 309). However, this goal did not truly come to fruition, as many authoritarian regimes oversaw market reforms and, as discussed previously, used this opportunity to create monopolistic industries run by regime-loyalists (Lust, 2023, 327). As Ellen Lust (2023) writes, "Moreover, unemployment, especially among educated youth, remained high, as the few good jobs created went to the ‘connected.’” Youth unemployment persisted during this period, not due to the principles of liberalisation, but because authoritarian regimes undermined reforms to protect their clientelist networks and economic dominance.
Since the 1990s, youth unemployment has continued to persist in the Middle East and is one of the most significant economic challenges to the region. This persistence can be attributed to authoritarian regimes and their stifling of both economic and social reform. When the state controls a significant portion of the spending and distributes it based on loyalty, social services like education and public infrastructure are often underfunded (Blaydes, 2020, pp. 474). Continued underinvestment in these civil services and state-dominated job markets has deprived youth in the Middle East of the opportunities to compete in modern labour markets, leading to a weakened private sector and civil society, which has in-turn also led to a lack of foreign investment into the region’s markets (Diamond, 2010, pp. 98). This cycle persists throughout the region and is why youth unemployment continues to be a major struggle for the Middle East.
Conclusion
While some may choose to examine the economic challenges of the Middle East on a more microscopic level, examining rentierism, clientelism, or youth unemployment individually, authoritarianism remains the central obstacle to meaningful market reform. Other cases, like post-Soviet Russia in the Yeltsin era, highlight how, without institutional reform, economic liberalisation cannot effectively take place (Huygen, 2012, pp. 66-70). Economic stagnation in the Middle East is not simply a result of resource dependence or some inherent inability to develop liberalised markets, but is a result of political systems which prioritise survival through loyalty over meaningful economic development. Addressing the region’s economic challenges requires more than examining individual challenges; it demands political systems that invest in the general public, promote entrepreneurship, and build economies through the promotion of skill rather than loyalty or connections. Without these reforms, the region’s youth will continue to bear the cost of regimes which value control over progress.
Works Cited
Beblawi, H. (2015). The rentier state in the Arab world. In The Arab State (pp. 85-98). Routledge.
Blaydes, L. (2020). Distributive Politics in The Middle East. In: L. Sadiki (ed.), Routledge Handbook of Middle East Politics (pp. 471-479). Oxford: Routledge.
Diamond, L. (2010). Democracy's Past and Future: Why are there no Arab democracies? Journal of Democracy, 21(1): 93-104.
Huygen, C. (2012). One Step Forward, Two Steps Back: Boris Yeltsin and the Failure of Shock Therapy. Constellations 3 (1). https://doi.org/10.29173/cons16287.
Lust, Ellen (2023). The Middle East, Sixteenth Edition, (Thousand Oaks, CA: CQ Press): pp. 301-343. [Lust].
Ross, M. (2011). Does oil hinder democracy, World Politics 53(3): 325-361.
