All Arab political economies are rightly termed Limited Access Orders. They are sharply bifurcated into insiders and outsiders, the former much smaller group capturing rents generated by their grip on political power, while the far more numerous outsiders suffer neglect. Sharp bifurcation of Arab economies, polities, and even societies typically retard their development by concentrating resources in the hands of privileged elites, who naturally resist reforms that would encroach on their political power, material resources and societal preeminence.[1]

The partial exception to this general rule is found in the micro-states of the Gulf Cooperation Council. Their ample resources provide reasonable wealth even to outsiders, while rendering insider elites super rich. This material gap is further ameliorated by the small size of these political economies coupled with tribal and other social solidarities. But the very characteristics that make them a special, comparatively successful case of Limited Access Orders (LAOs), further reinforced by virtually unconditional western support, render them inappropriate as models to be emulated by other Arab political economies. Paradoxically, however, this has not prevented insiders in some of these LAOs from attempting to do so at least in form if not content. President Sisi’s grandiose projects ranging from his New Administrative Capital to sprawling beach resorts, in which Gulf investors are major, typically dominant shareholders, are cases in point. While glitzy capitals and opulent resorts are not grossly out of place in wealthy Gulf micro-states, they stand as indictments of the callousness and selfishness of LAO insiders in lower middle-income countries such as Egypt, where poverty rates approach 40% of the entire population.

Different as these two subtypes of LAOs appear on the surface—with one being wealthy, the other far less so—their underlying political economies are similar. Neither have openly competitive economies or polities, as both are controlled by insiders and the states they command. Who those insiders are, however, differs. In the wealthy GCC monarchies they are ruling families enmeshed in tribal and associated patronage networks, to which states, including their coercive agencies, are subordinate. In the non-oil, non-GCC monarchies of Jordan and Morocco, ruling families do not preside over extensive tribal networks, so LAO insiders in them tend to be more diverse, including state-based elites, such as those in the military and security services. In Algeria, Egypt and Tunisia–the republics that have not given way to militianization that has devoured the states of Lebanon, Syria, Iraq, Libya, Sudan, Yemen and Palestine—LAO insiders are either from or entirely beholden to the miliary or, in the case of Tunisia, also to the security services. In those militianized settings states have been hollowed out or entirely destroyed. To the extent they have LAOs their insiders are militia chieftains whose sway extends over sectors, not the entirety of the state, and typically over part but not all of the country.

But while Arab LAO insiders vary from being shaykhs of venerable tribes to former goatherds turned warlords, they all reject the very notion of equal citizenship and indeed, citizenship in any form. What they seek to substitute for extending citizenship to outsiders is a mix of material rewards, soft power, and subordination through intimidation. Each of these substitutes for citizenship and the rights it entails can take different forms. Material rewards were presented as an informal economic right in social contracts adopted in most post-colonial Arab nation states as the key substitute for meaningful political participation and real power sharing. While most GCC states can still afford them, other Arab states cannot. They have thus reneged on their contractual obligations by dramatic reductions of material rewards, which now they typically deliver through mechanisms that reinforce the status and power of insiders. One form is using a powerful institution, usually the military but sometimes an organization labeled a political party (but commonly a front for an intelligence service), to distribute foodstuffs or other handouts to needy populations. Where such institutions are lacking because of militianization of the state, it is the warlords in charge of militias who dispense patronage to their members, typically in proportion to standing within the militia. Social contracts have thus been vitiated outside the GCC, replaced by selective handouts by coercive agents who in so doing reinforce their roles similar to mafiosi.

Soft power—a term normally restricted to deployment by states of means of persuasion of external actors—is more appropriately applied to Arab LAOs than the usual term “legitimation.” Outsiders in LAOs are not truly citizens to whom regimes are accountable and consequentially rendered legitimate. Instead, outsiders are functionally equivalent to foreigners who need to be persuaded that the providing regime is at least acceptable, if not meritorious, so passively accept it. Efforts at deploying soft power domestically have thus intensified in tandem with the decline of social contracts, as reflected in regime sponsored ideologies which typically elide the difference between state and regime, so patriotism equates to loyalty to the regime, coupled with greater exploitation of cultural heritage to kindle pride in the nation and reinforce that loyalty. But soft power and the largely tacit acceptance it might generate does not provide a stable public political foundation equivalent to legitimacy generated by either actual regime performance, such as increasing the living standards of most citizens or admirably projecting national power into neighboring regions, or by accountability through free and fair elections embedded within a system of human and political rights. Because it provides insufficient footing, a regime that relies on soft power rather than true legitimacy to secure the political order must bolster soft with hard power.

Stagnation of GDP per capita coupled with increasing inequality in Arab economies thus leads inexorably to intensified repression, whether by the state or by militias that have usurped state power. Ever greater reliance on repression of outsiders necessarily enhances the power among insiders of their deep state, the core of which is comprised of the key coercive institutions–the military, security services, and legal/judicial system. That in turn provides those institutions and their leaders with the capacity and the justification to extract an ever greater share of national wealth, thereby further impeding macro-economic performance. In sum, interaction of political and economic factors reinforces the relative downward economic slide of Arab LAOs, which in virtually all cases are underperforming non-Arab comparators.

Prospects for Reform of Arab LAOs

Middle classes are typically the champions of reform of authoritarian political economies. Uprisings in 2011 and 2019 appear to have confirmed that observation applies to the Arab world. That they failed also suggests the magnitude of the reform task at hand. Those in 2011 came in the wake of more than a decade of economic and political liberalization which also saw the expansion of relevant Arab middle classes. Those in 2019 in Algeria and Iraq followed almost five years of depressed oil prices which squeezed those countries’ middle classes who like their class compatriots in most 2011 uprisings were enthusiastic participants in demonstrations.

Times, however, have changed. The comparatively liberal political atmosphere of these earlier periods has been replaced by a much tougher authoritarianism, meted out by regimes in Arab republics and non-GCC Arab monarchies with the backing of one or more of the emerging regional powers, including the UAE, Saudi Arabia, Qatar, Turkey, and Israel, all of which are dead set against renewed uprisings. All global actors with significant influence in the region, whether North American, European, Russian or Chinese, stand behind this two tiered regional authoritarian structure. With the dramatic constriction of political space in which middle classes can speak and act, their organizational capacities have withered.

But it is not just unbridled repression that confronts potential middle class reform movements. Their numbers and solidarity are also under attack. Economic stagnation has retarded and, in some countries, reversed the rate of growth of middle classes. Their bottom ranks are eroded into semi- or even outright poverty as public and formal private sectors shrink while the economic cancer of informality spreads throughout the system. The middle class is grimly hanging on, not prospering. While its lower strata are slipping ever further down the social order, its upper strata are desperately reaching for whatever they can cling on to. Since these economies have been colonized by the insider individuals and organizations of LAOs, they provide middle class perches only for those willing to play by their rules. In Egypt, for example, this requires recruits into numerous middle class vocations, ranging from teachers to professors to judges to diplomats, to undergo indoctrination in military institutions and pass military administered exams, including loyalty tests. Given how bleak the alternatives are, selling one’s soul to LAO insiders is understandable, even forgivable, at least at an individual level.

This approach by today’s hardened authoritarian Arab states to subordinating potentially volatile, reformist middle classes is reinforced by regime propagated ideology less reminiscent of the ideology of forerunner hybrid authoritarianism than it is of fascism or communism. Its key doctrines are frailties of the nation state are due to the personal weaknesses of citizens who must be toughened up; the welfare of the state takes precedence over that of individuals; the regime is identical with the state; criticism of the state is disloyal and treasonous; and encirclement of and potential attack on the nation state by unnamed foreign enemies poses a constant threat for which the nation and its inhabitants must be prepared. This is an ideology of fear rather than hope, of subordination of the individual to the collective will embodied in the state, and of denial of any notion of citizen rights or even autonomy. Drummed into citizens at every opportunity and through as many sources as possible, it justifies to its adherents their rejection of independent, critical thinking, in favor of blind loyalty, coupled with demonization of the non-compliant. The middle class, being the prime target and consumer of regime sponsored ideology, is thus under assault materially, intellectually, and behaviorally in the sense that all collective action not approved by the state is considered off limits. In the face of this onslaught it would be surprising were Arab middle classes capable of mobilizing sufficiently to force reforms upon recalcitrant regimes.

This leaves those above or below the middle class as the remaining possible champions of reform. Paradoxically, it is the former rather than the latter who are more likely to play that role. The lower classes lack the skills and resources to formulate and advocate reform strategies and demands. Their politics are either those of clientage and submission, or rebellion, but overwhelmingly the former, not the latter. While it is possible that some spark might ignite their deprivation, marginalization, and despair into political conflagration, given their socio-political isolation and the coercive forces deployed against them, that possibility is remote. While they have little or nothing to lose except their freedom or lives, rebellion has so far been limited to specific, generally small, isolated communities, or mobilized through ethnic, linguistic, kin, or religious solidarities, which are generally irrelevant in relatively homogenous Arab settings, such as those in much of the maghrib.

As for those above the middle class, either within or directly bordering the LAO, they have a lot to lose, so they are inherently more interested in at least partial reforms to preserve their powers and rewards. They have reason to save the system, as the Egyptian military demonstrated in 2011-13, when it jettisoned Mubarak and then overthrew Mursi; or as the Tunisian military/security elite have done by backing Kais Said in Tunisia; and as members of the Moroccan makhzen, coupled with security/intelligence elites, may be preparing to do in Morocco as King Muhammed VI grows ever more frail. But these examples raise the pertinent question of whether reforms from the inside should really be labeled such, rather than just cosmetic changes intended to preserve rather than reform the system. That may be so, but it does not rule out the possibility that more serious reforms might be pushed by insiders if and when the pressure upon the LAO becomes unsustainable even with cosmetic changes.

In conclusion, reform of Arab existing LAOs faces greater obstacles than did previous, failed efforts to reform regimes in their hybrid, rather than hard authoritarian state. That does not mean, however, that these LAOs are stable or impervious to change. Their inherent instability is reflected by their vigorous coup proofing, overall security measures, and allocation of resources for patronage purposes, coupled with their didactic ideologies and somewhat pathetic efforts at thought control. Change can come through mobilized, marginal populations assaulting centers of power, but such populations have invariably in the Arab world relied not upon class identities or even shared outrage at one or another regime transgression, but on social formations to provide their solidarities and organizational frameworks, primarily through militias. But where such formations are weak or lacking, LAOs face a lesser threat to their persistence. And lest one think that rebellious social formations that form militias deliver the goods to their peoples by challenging status quos, one need only reflect on the abuses of militias and their total disdain for any idea of citizenship to be disabused of that notion.

Real reform, in sum, requires and reflects a reasonably sophisticated polity, not one pulverized by authoritarianism or riven by militias. This is why it is so rare in the Arab world.

[1] On Limited Access Orders, see Douglass C. North, John Joseph Wallis, and Barry R. Weingast, “A Conceptual Framework for Interpreting Recorded Human History,” Cambridge: National Bureau of Economic Research (NBER), Working Paper 12795, December 2006. For an elaboration of the argument, see by the same authors Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History (Cambridge: Cambridge University Press, 2009).