Association Lecture—The Economic Roots of Political Underdevelopment in the Middle East: A Historical Perspective

[Author Affiliation]Timur Kuran, , , , t.kuran@duke.edu1. IntroductionTimur Kuran, Professor of Economics and Political Science and Gorter Family Professor of Islamic Studies, Duke University, 2011 Association Lecture (Figure omitted. See article image.)The year 2011 will go down in history for two sets of events. One involves the financial problems of the Euro zone and the other the Arab uprisings. In several Arab countries, crowds accomplished what seemed impossible a year ago. Cumulatively, the toppled leaders Zinedine El Ben Ali, Hosni Mubarak, and Muammar Gaddafi had been in office 96 years. In several Arab countries work is underway to rewrite the constitution.What makes the Arab Spring especially newsworthy is that the 21-member Arab League has lacked a single democracy. In the Muslim-majority countries of the wider region known as the Middle East and North Africa, which I shall call the "Middle East" as a shorthand, there exists a single democracy, in Turkey, and only recently has Turkey qualified as a full electoral democracy by ending, through a referendum, the "political watchdog" role of its huge military.Democracy is an admired form of government because it supports social characteristics associated with the good life: rule of law, transparency in government, and civil liberties. Various global indices measure these characteristics individually. In practically all these indices the Middle East appears as a poor performer (see Table 1). Relative to the OECD, the club of economically advanced democracies, corruption is quite prevalent according to Transparency International. The Middle East also scores poorly in the World Bank's Rule of Law Index and in the Civil Liberties Index of Freedom House. There are variations within the Middle East, which is consistent with the argument that will follow. Although the entire region has been modernizing, Turkey started the process one to three generations before Arab countries, and over the past two centuries it has come the farthest in restructuring its social order. The differences in timing and pace are reflected in such indices.Table 1 Comparative Indicators of Political Performance (2008-2009) (Table omitted. See article image.)A commonality of the Arab World, Iran, and Turkey lies in the dominant religion. A widespread view among interpreters is that Islam accounts for the political deficiencies captured by Table 1. There are reasons, of course, for skepticism. The governance problems observed in the Middle East are replicated in places where Islam is not a factor; Latin America offers an example. Also, Islam has been associated with diverse traditions regarding the state's role. It has been associated with social repression but also with shallow governance. Nevertheless, there are reasons to take the alleged link seriously. Islam gave the region a common economic legacy through Islamic laws that were enforced widely until recently, and these laws contributed to holding the region back economically (Kuran 2011). If Islam influenced economic patterns, perhaps it affected political patterns as well.Economic opportunities shape political possibilities through various mechanisms. Here is a pertinent example. Under a wide range of situations, the enrichment of private merchants will strengthen civil society by increasing the resources available to non-state organizations; in turn, a stronger civil society will make it harder for the state to trample on property rights. For another relevant example, a globally competitive economy that provides broad employment opportunities will enhance, in the eyes of the citizenry, the legitimacy of the incumbent political system. People with a happy future are unlikely to revolt.Focusing on economic outcomes that had political consequences, I'm going to consider the evolution of three economic institutions that played important roles in Middle Eastern economic history. …