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Crony Capitalism and Corruption in the Middle East and North Africa

Year 2023, Issue: 68, 9 - 19, 20.12.2023
https://doi.org/10.26650/JECS2023-1210965

Abstract

This paper provides a perspective on the political economy of crony capitalism and corruption in Egypt, Libya, Tunisia, Syria, and Yemen, severely affected by the Arab Spring, to propose that these factors triggered the uprisings. The crony capitalism in Egypt shows military dominance and its conglomerates in various sectors. Tunisian capitalism was around President Ben Ali and his wife, Leïla Ben Ali, who controlled about 30-40% of the economy. In Syria, President Assad and his cousin Makhloufi’s families controlled 60% of the country’s GDP, whereas the Qaddafi family controlled the economic paradigm in Libya. Lastly, in Yemen, certain tribes, families, and acquittances of Saleh dominated the Yemeni economy. After the Arab protests, all of these countries changed their regimes except Syria, where the demonstrations ignited a civil war. However, the pre-existing powers continued their dominance, heavily in Egypt and partially in Libya and Yemen. The so-called successful example is Tunisia, which struggled with the democratic transition that hindered its systematic economic development. The analysis elucidates dominant state-class relations pre- and post-Arab Spring and stipulates the channels through which crony capitalism and corruption may be eliminated.

References

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  • Diwan, I. (2012). Liberals, Islamists, and the Role of the Middle Class in the Demise of the Arab Autocracies. Harvard Journal of Middle Eastern Politics and Policy, 31-54. google scholar
  • Diwan, I. (2019). Tunisia’s Upcoming Challenge: Fixing the Economy Before It’s Too Late. Arab Reform Initiative. google scholar
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  • Diwan, I., Keefer, P., & Schiffbauer, M. (2015). The mechanics, growth and political economy of crony capitalism in Egypt. In A Malik & I. Atiyas (Eds.), Crony capitalism in the Middle East: Business and politics from liberalization to the Arab Spring (pp. 67-89). Oxford University Press. google scholar
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  • Malik, Adeel. (2015). The Political Economy of Arab Uprisings. In Palgrave Macmillan (Ed.), The New Palgrave Dictionary of Economics (pp. 1-9). London: Palgrave Macmillan UK. https://doi.org/10.1057/978-1-349-95121-5_3014-1 google scholar
  • Matta, S., Appleton, S., & Bleaney, M. (2019). The Impact of the Arab Spring on the Tunisian Economy. The World Bank Economic Review, 33(1), 231-258. https://doi.org/10.1093/wber/lhw059 google scholar
  • Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics, 110(3), 681-712. https://doi.org/10.2307/2946696 google scholar
  • Mironov, M. (2005). Bad Corruption, Good Corruption and Growth. 40. google scholar
  • Mnawar, A. (2015). Corruption and the “Arab Spring.” Polish Journal of Political Science, (3), 36-49. google scholar
  • Noha, E., & Jhonsa, E. (2014). Governance and economic growth: The case of Middle Eastern and North African countries. Munich Personal RePEc Archive - MPRA, 1-8. google scholar
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  • Pappa, E., Sajedi, R., & Vella, E. (2015). Fiscal consolidation with tax evasion and corruption. Journal of International Economics, 96, S56-S75. https://doi.org/10.1016/j.jinteco.2014.12.004 google scholar
  • Peachey, P. (2022). Libya’s rotting London mansion and the mystery of the missing Qaddafi billions. Retrieved from https://www.thenationalnews.com/world/uk-news/2022/02/01/libyas-rotting-mansion-and-the-mystery-of-the-60bn-qaddafi-fortune/ google scholar
  • Peleg, I., & Mendilow, J. (2014). Corruption in the contemporary world—Theory, practice, and hotspots. Lanham, MD: Lexington Books. google scholar
  • Podobnik, B., Shao, J., Njavro, D., Ivanov, P. Ch., & Stanley, H. E. (2008). Influence of corruption on economic growth rate and foreign investment. The European Physical Journal B, 63(4), 547-550. https://doi.org/10.1140/epjb/e2008-00210-2 google scholar
  • Rijkers, B., Freund, C., & Nucifora, A. (2017). All in the family: State capture in Tunisia. Journal of Development Economics, 124, 41-59. https://doi.org/10.1016/j.jdeveco.2016.08.002 google scholar
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  • Sika, N. (2012). The Political Economy of Arab Uprisings. European Institute of the Mediterranean. Retrieved from European Institute of the Mediterranean website: https://www.files.ethz.ch/isn/165555/10.%20PapersEuromesco10_Sika.pdf google scholar
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Year 2023, Issue: 68, 9 - 19, 20.12.2023
https://doi.org/10.26650/JECS2023-1210965

Abstract

References

  • Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty (1. ed). New York: Crown Business. google scholar
  • Ahmad, E., Ullah, M. A., & Arfeen, M. I. (2012). Does corruption affect economic growth? Latin American Journal of Economics, 49(2), 277-305. https://doi.Org/10.7764/LAJE.49.2.277 google scholar
  • Aligica, P. D., & Tarko, V. (2014). Crony Capitalism: Rent Seeking, Institutions and Ideology: Crony Capitalism. Kyklos, 67(2), 156-176. https://doi.org/10.1111/kykl.12048 google scholar
  • Alvi, H. (2019). The political economy and Islam of the Middle East: The case of Tunisia. Cham: Palgrave Macmillan. google scholar
  • Assaad, R. (2014). Making sense of Arab labour markets: The enduring legacy of dualism. IZA Journal of Labour and Development, 3(6). Retrieved from doi:10.1186/2193-9020-3-6 google scholar
  • Beck, M., & Hüser, S. (2012). Political Change in the Middle East: An Attempt to Analyze the “Arab Spring.” German Institute for Global and Area Studies (GIGA). google scholar
  • Beck, M., & Hüser, S. (2012). Political Change in the Middle East: An Attempt to Analyze the “Arab Spring.” German Institute for Global and Area Studies (GIGA). google scholar
  • Borshchevskaya, A. (2010). Sponsored Corruption and Neglected Reform in Syria. Middle East Quarterly, 41-50. google scholar
  • Cammett, M., & Diwan, I. (2016). The Roll-Back of the State and the Rise of Crony Capitalism. In I. Diwan & A. Galal (Eds.), The Middle East Economies in Times of Transition. Palgrave Macmillan. google scholar
  • Center for Constitutional Transitions - International Institute for Democracy and Electoral Assistance - The United Nations Development Project. (2014). Combating Corruption: Constitutional Frameworks for the Middle East and North Africa. google scholar
  • Chekir, H., & Diwan, I. (2014). Crony Capitalism in Egypt. Journal of Globalization and Development, 5(2). https://doi.org/10.1515/jgd-2014-0025 google scholar
  • de Vaal, A., & Ebben, W. (2011). Institutions and the Relation between Corruption and Economic Growth: Institutions, Corruption, and Economic Growth. Review of Development Economics, 15(1), 108-123. https://doi.org/10.1111/j.1467-9361.2010.00596.x google scholar
  • Dimant, E., Krieger, T., & Meierrieks, D. (2013). The effect of corruption on migration,1985-2000. Applied Economics Letters, 20(13), 1270-1274. https://doi.org/10.1080/13504851.2013.806776 google scholar
  • Diwan, I. (2012). Liberals, Islamists, and the Role of the Middle Class in the Demise of the Arab Autocracies. Harvard Journal of Middle Eastern Politics and Policy, 31-54. google scholar
  • Diwan, I. (2019). Tunisia’s Upcoming Challenge: Fixing the Economy Before It’s Too Late. Arab Reform Initiative. google scholar
  • Diwan, I., & Akin, T. (2015). Fifty years of fiscal policy in the Arab region. Economic Research Forum - Working Paper No: 914. google scholar
  • Diwan, I., Keefer, P., & Schiffbauer, M. (2013). The Effect of Cronyism on Private Sector Growth in Egypt. Retrieved from http://cega.berkeley.edu/assets/miscellaneous_files/55-ABCA_-Cronyism_and_Private_Sector_Growth_in_Egypt.pdf google scholar
  • Diwan, I., Keefer, P., & Schiffbauer, M. (2015). The mechanics, growth and political economy of crony capitalism in Egypt. In A Malik & I. Atiyas (Eds.), Crony capitalism in the Middle East: Business and politics from liberalization to the Arab Spring (pp. 67-89). Oxford University Press. google scholar
  • Feldman, N. (2020). The Arab Winter: A Tragedy. Princeton, New Jersey: Princeton University Press. google scholar
  • Glaeser, E., Scheinkman, J., & Shleifer, A. (2003). The injustice of inequality. Journal of Monetary Economics, 50(1), 199-222. https://doi.org/10.1016/S0304-3932(02)00204-0 google scholar
  • Haber, S. H. (Ed.). (2002). Crony capitalism and economic growth in Latin America: Theory and evidence. Stanford, Calif: Hoover Institution Press. google scholar
  • Hanieh, A. (2018). Money, markets, and monarchies: The Gulf Cooperation Council and the political economy of the contemporary Middle East. Cambridge, United Kingdom; New York: Cambridge University Press. google scholar
  • Hanieh, A. (2021). Authoritarianism, economic liberalization, and the roots of the 2011 uprisings. The Netherlands: The Transnational Institute. Retrieved from The Transnational Institute website: https://longreads.tni.org/authoritarianism-economic-liberalization-and-the-roots-of-the-2011-uprisings google scholar
  • Kandil, M. (2009). Determinants of institutional quality and their impact on economic growth in the MENA region. International Journal of Development Issues, 8(2), 134-167. https://doi.org/10.1108/14468950910997693 google scholar
  • Khan, M. (2014). The Economic Consequences of the Arab Spring. Atlantic Council - Rafik Hariri Center for The Middle East. Retrieved from Atlantic Council - Rafik Hariri Center for The Middle East website: https://www.files.ethz.ch/isn/177370/The_Economic_Consequences_of_the_Arab_Spring.pdf. google scholar
  • Krueger, Anne O. (2002). Why Crony Capitalism Is Bad For Growth. pp. 1- 23 in Crony Capitalism and Economic Growth in Latin America, edited by Stephen Haber. Hoover Press. google scholar
  • Lewis, A. (2011). Tracking down the Ben Ali and Trabelsi fortune. Retrieved from https://www.bbc.com/news/world-africa-12302659 google scholar
  • Malik, Adeel. (2015). The Political Economy of Arab Uprisings. In Palgrave Macmillan (Ed.), The New Palgrave Dictionary of Economics (pp. 1-9). London: Palgrave Macmillan UK. https://doi.org/10.1057/978-1-349-95121-5_3014-1 google scholar
  • Matta, S., Appleton, S., & Bleaney, M. (2019). The Impact of the Arab Spring on the Tunisian Economy. The World Bank Economic Review, 33(1), 231-258. https://doi.org/10.1093/wber/lhw059 google scholar
  • Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics, 110(3), 681-712. https://doi.org/10.2307/2946696 google scholar
  • Mironov, M. (2005). Bad Corruption, Good Corruption and Growth. 40. google scholar
  • Mnawar, A. (2015). Corruption and the “Arab Spring.” Polish Journal of Political Science, (3), 36-49. google scholar
  • Noha, E., & Jhonsa, E. (2014). Governance and economic growth: The case of Middle Eastern and North African countries. Munich Personal RePEc Archive - MPRA, 1-8. google scholar
  • Owen, R. (2012). The rise and fall of Arab presidents for life. Cambridge, Mass: Harvard University Press. google scholar
  • Pappa, E., Sajedi, R., & Vella, E. (2015). Fiscal consolidation with tax evasion and corruption. Journal of International Economics, 96, S56-S75. https://doi.org/10.1016/j.jinteco.2014.12.004 google scholar
  • Peachey, P. (2022). Libya’s rotting London mansion and the mystery of the missing Qaddafi billions. Retrieved from https://www.thenationalnews.com/world/uk-news/2022/02/01/libyas-rotting-mansion-and-the-mystery-of-the-60bn-qaddafi-fortune/ google scholar
  • Peleg, I., & Mendilow, J. (2014). Corruption in the contemporary world—Theory, practice, and hotspots. Lanham, MD: Lexington Books. google scholar
  • Podobnik, B., Shao, J., Njavro, D., Ivanov, P. Ch., & Stanley, H. E. (2008). Influence of corruption on economic growth rate and foreign investment. The European Physical Journal B, 63(4), 547-550. https://doi.org/10.1140/epjb/e2008-00210-2 google scholar
  • Rijkers, B., Freund, C., & Nucifora, A. (2017). All in the family: State capture in Tunisia. Journal of Development Economics, 124, 41-59. https://doi.org/10.1016/j.jdeveco.2016.08.002 google scholar
  • Rothstein, B., & Uslaner, E. M. (2005). All for All: Equality, Corruption, and Social Trust. World Politics, 58(1), 41-72. https://doi.org/10.1353/wp.2006.0022 google scholar
  • Sika, N. (2012). The Political Economy of Arab Uprisings. European Institute of the Mediterranean. Retrieved from European Institute of the Mediterranean website: https://www.files.ethz.ch/isn/165555/10.%20PapersEuromesco10_Sika.pdf google scholar
  • Springborg, R. (2020). Political economies of the Middle East and North Africa. Cambridge, UK; Medford, MA: Polity Press. google scholar
  • United Nations - Beirut. (2018). Social Development Report—2: Inequality, Autonomy and Change in the Arab Region. google scholar
  • United Nations Development Programme. (2011). Arab Development Challenges Report 2011 Towards the Developmental State in the Arab Region (No. diw). google scholar
  • Wahab, B. (2019). Seven Pillars—What Will It Take to Repair Middle Eastern Economies? In M. Rubin & B. Katulis (Eds.), What Really Causes Instability in the Middle East? (pp. 125-152). google scholar
  • Warf, B. (2015). Corruption in the Middle East and North Africa: A Geographic Perspective. The Arab World Geographer, 18(1-2), 18. google scholar
  • Warf, B. (2018). Global corruption from a geographic perspective. New York, NY: Springer Berlin Heidelberg. google scholar
There are 47 citations in total.

Details

Primary Language English
Subjects Economics, Sociology
Journal Section Research Articles
Authors

Fatih Kırşanlı 0000-0003-3934-3601

Publication Date December 20, 2023
Submission Date November 28, 2022
Published in Issue Year 2023 Issue: 68

Cite

APA Kırşanlı, F. (2023). Crony Capitalism and Corruption in the Middle East and North Africa. Journal of Economy Culture and Society(68), 9-19. https://doi.org/10.26650/JECS2023-1210965
AMA Kırşanlı F. Crony Capitalism and Corruption in the Middle East and North Africa. Journal of Economy Culture and Society. December 2023;(68):9-19. doi:10.26650/JECS2023-1210965
Chicago Kırşanlı, Fatih. “Crony Capitalism and Corruption in the Middle East and North Africa”. Journal of Economy Culture and Society, no. 68 (December 2023): 9-19. https://doi.org/10.26650/JECS2023-1210965.
EndNote Kırşanlı F (December 1, 2023) Crony Capitalism and Corruption in the Middle East and North Africa. Journal of Economy Culture and Society 68 9–19.
IEEE F. Kırşanlı, “Crony Capitalism and Corruption in the Middle East and North Africa”, Journal of Economy Culture and Society, no. 68, pp. 9–19, December 2023, doi: 10.26650/JECS2023-1210965.
ISNAD Kırşanlı, Fatih. “Crony Capitalism and Corruption in the Middle East and North Africa”. Journal of Economy Culture and Society 68 (December 2023), 9-19. https://doi.org/10.26650/JECS2023-1210965.
JAMA Kırşanlı F. Crony Capitalism and Corruption in the Middle East and North Africa. Journal of Economy Culture and Society. 2023;:9–19.
MLA Kırşanlı, Fatih. “Crony Capitalism and Corruption in the Middle East and North Africa”. Journal of Economy Culture and Society, no. 68, 2023, pp. 9-19, doi:10.26650/JECS2023-1210965.
Vancouver Kırşanlı F. Crony Capitalism and Corruption in the Middle East and North Africa. Journal of Economy Culture and Society. 2023(68):9-19.