The demise of the authoritarian bargain in the Arab Middle East.

• Author: Dilek, Oguz

Introduction

Often, what is called 'old' implies uselessness. The cognitive templates it possesses can no longer make sense of the present, or 'new, social reality. One simple way to establish something is now old, or out of use, is to investigate whether, or not, there is a certain degree of mismatch between the presently encountered social, economic or political phenomena and the available stock of knowledge. The Middle East, this paper argues, is certainly not a new place to the extent that the political theater of the region is still the playing field of an unrepresentative elite whose fortune disagrees with the well-being of the larger population.

The communal waves tried, but failed, to alter this resilient status quo--that is true. Nevertheless, they showed to us two things. One is that peoples of this region, especially younger generations, no longer fear pushing strong men from their posts--such as Mubarak or Ben Ali. For once, it seems, Arabs broke free from their predicaments. The other is, as this paper argues, that the post-Arab Spring Middle East is already near to a threshold of change. It will most assuredly pass the threshold once those economic conditions needed for further changes in the political order, come in to force. The only alternative to this is a protracted crisis of authoritarian political economy.

The foremost condition for various Arab countries to overcome this status of limbo is to reconcile economic development with a meaningful degree of cohesion and stability within society. For them to be able to create organic relationships between economy and society, this paper propounds that they first need to divorce from the free market economy sanctified by the IMF or the World Bank. In the last three decades, the myth of self-regulating markets delivered the greatest harm to the Arab societies. Structural adjustment policies, rather than generating optimal allocation of resources, yielded catastrophic market failures, disturbed social equality, and only served the interests of the few in the commanding heights of state and society. Authoritarian elites' false promise of rapid modernization of economies through austerity agendas only created an inapt private enterprise with no ability whatsoever to substitute for the withdrawal of state from areas of social provision. The resurgent authoritarianism in Egypt, for instance, may only hope to contain the associated social grievances, but they are far from diffusing these social tensions.

This article unfolds along the following three sections. The first section deals with authoritarian bargaining. It conceptualizes it as a social contract that previous to the era of market-oriented reforms underpinned the relationship between the repressive elites and their Arab subjects. According to that, the latter was to overlook ongoing political repression so long as material aid flows from the former in the form of subsidies, cheap credits, favors and employment. (1) The second section delves into the historical circumstances that rendered the authoritarian bargain an obsolete accumulation regime. There emerged three reasons that in interaction spelled its ruin. First, the authoritarian bargain for all its popularity among the masses became unsustainable as far as that it completely subordinated the idea of efficiency to a pseudo-socialist welfare agenda. Second is immediately related to the first factor as that escalating growth of population generated an ever-enlarging demand for state-paid employment, subsidies or credits. Finally, these two factors became a pretext for business circles and a second generation of authoritarian elites--i.e. Ben Ali, Assad, Sadat and Mubarak--to enthusiastically join in the waves of the neoliberalism--as did the rest of the World.

This same section will detail out some of the underlying reasons that set the tone towards the Arab Spring. First, the authoritarian bargain did not completely go extinct. It rather (d)evolved into a new form from the 1980s onwards, one that retained the repressive character of politics, albeit debunking its state-led welfare agenda in favor of deregulation, fiscal austerity and privatization. (2) Such coexistence of authoritarianism and marketization was a huge dent on the fabric of this hybrid authoritarian mode of bargain. To the extent that the rulers had to push for structural adjustment reforms without creating a democratic buffer to absorb social grievances with those reforms. The second source of fragility emanated from the fact that post-1980s Arab economies proved even less capable than their statist predecessors in dealing with demographic imbalances. The dismantling of the state-owned large industrial sector in line with neoliberal transformations caused what D. Rodrick called "premature de-industrialization." (3) Concisely, the elites' strict adherence to neoliberal reform moved them into putting state on the sideline before replacing it with a private sector capable of absorbing the jobless youth.

The third and the final sections of this article aim to relay all these observations onto the specific cases of Egypt, Syria and Tunisia together with the historical trajectories each state has gone through, from the rise of the authoritarian bargain up to the present.

The Main Contours of the Authoritarian Bargain and Its Birth in the Arab World

To stay in power regimes need domestic legitimacy which comes in many different forms. Extending the realm of political liberties is one way of doing so, but obviously it is not the strongest suit of those political orders that take on the main contours of authoritarianism. In order to invoke loyalty in their subjects, they have to therefore create and deploy mechanisms for redistributing the aggregate national wealth. (4) This way of ordering a country's political economy is called an authoritarian bargain, some sort of a social contract between the elites and the citizens whereby the former promises substantial public spending in exchange for citizen' absence from seeking political influence. (5) It is therefore safe to assume that public financing of citizens' needs is both the rationale behind the persistence of this bargain and constitutes a substitute for liberal political alternatives.

As part of this vassal-suzerain pattern of relationships, leading elites make a series of strategic transfers to those who can entrench their control over the military, local and national bureaucracy, business community and the ruling party. (6) Incumbents have in their repertoire also those specific types of policy instruments that benefit middle as well as lower echelons of society. Trade regulations and various forms of protection, for example, stand against entry of global capital into the market, accruing income to small-scale domestic industry. (7) They also assert a benefit from supporting authoritarian rulers if provided with subsidies, transfers and cheap credit. Workers benefit from this implicit agreement between the rulers and the masses through the provision of labor regulations and welfare programs. Further into the authoritarian model, its political economy is based around rebuilding the property order through land reforms or nationalization of private assets, which are imperative for securing peasantry's backing of the incumbent dictator. (8) Finally this type of non-democratic regime, also reliant on the loyalty of the educated middle classes, has to ensure an ever-enlarging administrative structure with employment opportunities. (9) Authoritarian bargain comes down to altering the social structure, establishing a new domestic order in its place, and then turning scarce economic opportunities into assets that one cannot afford before surrendering to authoritarian political courses.

In broad strokes, authoritarian regimes of the region evolved from the elites' pursuit of furthering their nation-making process as of the late 1970s. (10) The post-colonial Arab states had two enduring sets of troubles for the newly established elites to overcome at the same time. On the one hand, they had to instigate a long period of economic growth in order to be able to generate material security. (11) However, neither the economic institutions, nor the maturity of the industrial basis that they inherited from their colonial masters, were enough for them to quickly achieve this. On the other hand, they had no recourse to mobilizing masses through representative democracy. For many the reason was that newly founded states' official identities, such as Syrian or Jordanian, were far away from competing against historically better established supra-state (e.g. Pan-Arabism) and sub-state (e.g. tribal networks) identities. (12)

What then came to their aid was the predominant policy paradigm of capitalist wealth accumulation: import-substitution model. This accumulation regime, as the contemporary understanding of the Cold War era, became the cognitive template of how to go about organizing the state's role in relation to the economic field. The gist of it was to forge extensive public sectors to compensate for the absence of private employment and market-driven demand. (13) A third world variant of Keynesianism, import substitution scored great success in mustering a domestic-induced industrialization and commercialization of agricultural sectors. (14) The state's new role as the principal pacemaker with decisive control over growth, prices, employment opportunities, and credit soon represented new political opportunities for the leading elites. They thereby turned this opportunity into a recurring pattern of political economy--called the authoritarian bargain. It is on this basis that, as late as the 1970s, Arab statehood already had its roots deep inside the domestic sphere as a magnet that no individual could fail to draw/stay close to without risking economic survival. (15) Resultantly, the authoritarian bargain is emergent from an...