Segmented market economies in the Arab world: the political economy of insider–outsider divisions

2020 ◽  
Author(s):  
Steffen Hertog
Keyword(s):  
Political Economy ◽  
Developing Countries ◽  
Labor Markets ◽  
Market Economy ◽  
Arab World ◽  
Relative Size ◽  
State Intervention ◽  
The Political ◽  
Relative Importance ◽  
Segmented Market

Abstract This article argues that the low dynamism of low- to mid-income Arab economies is explained with a set of interconnected factors that constitute a particular variety of capitalism which we call ‘segmented market economy’. These include an over-committed and interventionist state; deep insider–outsider divides in private sectors and labor markets that result from and reinforce lopsided state intervention; and an equilibrium of low skills and low productivity that results from and reinforces insider–outsider divides. These mutually reinforcing features undermine encompassing cooperation between state, business and labor. While some of these features are generic to developing countries, others are regionally specific, including the relative importance and historical ambition of the state in the economy and, closely related, the relative size and rigidity of the insider coalitions created through government intervention. Insiders and outsiders exist everywhere, but the divisions are particularly stark, immovable and consequential in the Arab world.

Book Reviews

2012 ◽  
Vol 50 (4) ◽  
pp. 1132-1135
Keyword(s):  
Political Economy ◽  
Developing Countries ◽  
Latin America ◽  
Industrial Policy ◽  
Industrial Development ◽  
State Intervention ◽  
The Political ◽  
Industrial Policies ◽  
Catch Up ◽  
The Caribbean

Ann Harrison of Wharton School, University of Pennsylvania reviews, “Industrial Policy and Development: The Political Economy of Capabilities Accumulation” by Mario Cimoli, Giovanni Dosi and Joseph E. Stiglitz. The EconLit Abstract of this book begins: “ Nineteen papers explore state intervention in industry and markets, focusing on successful industrial policies and interventions. Papers discuss institutions and policies shaping industrial development—an introductory note; technological learning, policy regimes, and growth—the long-term patterns and some specificities of a “"globalized'' economy; emulation versus comparative advantage—competing and complementary principles in the history of economic policy; industrial policies in developing countries—history and perspectives; industrial tariffs, international trade, and development; the (slow) return of industrial policies in Latin America and the Caribbean; the different capabilities of east Asia and Latin America to “"demand-adapt'' and “"supply-upgrade'' their export productive capacity; microeconomic evolution in high uncertainty contexts—the manufacturing sector in Argentina; the impact of public policies in Brazil along the path from semistagnation to growth in a Sino-centric market; the past, present, and future of industrial policy in India—adapting to the changing domestic and international environment; growth and development in China and India—the role of industrial and innovation policy in rapid catch-up; the political economy of industrial policy in Asia and Latin America; the roles of research at universities and public labs in economic catch-up; nationality of firm ownership in developing countries—who “"crowds out'' whom in imperfect markets; a question of trust—historical lessons for current development; competition policy and industrial development; latecomer entrepreneurship—a policy perspective; intellectual property and industrial development—a critical assessment; and the future of industrial policies in the new millennium—toward a knowledge-centered development agenda. Cimoli is with the United Nations Economic Commission for Latin America and the Caribbean and the Department of Economics at the University of Venice (Ca Foscari). Dosi is Professor of Economics at the Sant'Anna School of Advanced Studies, Pisa. Stiglitz is University Professor at Columbia University and Co-President of the Initiative for Policy Dialogue. Index.

Burning Somalia’s Future

2018 ◽  
pp. 121-148
Author(s):  
Ilya Gridneff
Keyword(s):  
Political Economy ◽  
Natural Resource ◽  
Arab World ◽  
Gulf Cooperation Council ◽  
The Political ◽  
Horn Of Africa ◽  
Commercial Activity ◽  
Access To Finance ◽  
Domestic Use ◽  
Emerging Powers

This chapter argues that the charcoal trade exposes Somalia’s political economy as a driver of persistent conflict fueled by competing local, regional, and international interests. Of particular note is the tendency of Gulf Cooperation Council (GCC) states to buy Somalia’s charcoal, whether licit or illicit, for domestic use: such commercial activity contributes to the country’s regressive imbalances. At the same time, GCC states jockeying for geopolitical influence across the Horn of Africa increases the uneven spread of resources and access to finance for Somalia’s leaders. This process has fed the political elite’s insatiable appetite for personal patronage and has produced a nexus of competing rivalries that further destabilizes Somalia and the broader Red Sea region. This chapter studies the use of one natural resource, charcoal, and its trans-boundary trade as a vehicle to illustrate how Somalia’s ties to the GCC states—and the broader Islamic or Arab world—are being strengthened. The chapter concludes that this growing proximity is both offering beneficial forms of assistance and support, as well as proving to be a factor for destabilization at a time when Somalia is becoming of increasing strategic concern for Western and emerging powers.

Re-Thinking the Role of Institutions in Neoliberalism From New Institutional Economics Perspective

2020 ◽  
pp. 25-40
Author(s):  
Ilke Civelekoglu ◽  
Basak Ozoral
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Developing Countries ◽  
Property Rights ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
The Political ◽  
Formal Institutions ◽  
Fertile Ground

In an attempt to discuss neoliberalism with a reference to new institutional economics, this chapter problematizes the role of formal institutions in the neoliberal age by focusing on a specific type of formal institution, namely property rights in developing countries. New institutional economics (NIE) argues that secure property rights are important as they guarantee investments and thus, promote economic growth. This chapter discusses why the protection of property rights is weak and ineffective in certain developing countries despite their endorsement of neoliberalism by shedding light on the link between the institutional structure of the state and neoliberalism in the developing world. With the political economy perspective, the chapter aims to build a bridge between NIE and political economy, and thereby providing fertile ground for the advancement of NIE.

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