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Economic Development and Political Reform: The Impact of External Capital on the Middle East

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As Patrick Clawson stated, "the partisans of engagement with problematic regimes argue that the more prosperous a society, the more open it will be. Glasser presents evidence to make exactly the opposite argument for the Middle East. Not only do Middle East states with more resources avoid political and economic reform but he argues that reform comes only as a result of crises induced by insufficient resources.

But Glasser's evidence is weak; it is by no means clear that external windfalls (oil and aid) explain why the Middle East lags behind much of the world in market-oriented reforms and democratization. For example, he contrasts the reforms in Turkey and Morocco with their absence in oil-rich Kuwait and aid-rich Egypt. But this is not accurate. Kuwait has implemented considerable political and economic reform; its parliament has real authority; and foreign firms are being invited into the oil industry. Even Egypt has finally undertaken economic reforms after years of promising to do so: the budget deficit is modest, subsidies are largely gone, several large public enterprises have been privatized, and government regulations are becoming more transparent and less restraining. Meanwhile, the reform process in Turkey has been slow and that in Morocco even slower.

The principal factors explaining which states implement economic reforms and democratization appear to be political, not economic-specifically, governments which reform are more concerned about the welfare of the ordinary citizen while governments that do not are more concerned about preserving the power of the present elite. That reality escapes Glasser, who accepts the leftist myths so common among his fellow university professors (he is at Brooklyn College). He argues that promoting the private sector and rolling back government intervention eviscerate "the power of the popular, working, or `disadvantaged' sectors." Contrary to his claim, it is in fact, the anti-market regimes, like those in the hard-line states cited above, where the poor and ordinary workers fare worst."

In his new book, Economic Development and Political Reform: The Impact of External Capital on the Middle East, Bradley Louis Glasser analyzes the impact of exogenous state revenues on political and economic liberalization in selected Middle Eastern polities. In essence, Glasser focuses on achieving a broader understanding of how and why political liberalization evolves differently in different countries and at different time periods. His study contends that economic conditions and policies often shape the scope of political-liberalization or democratization processes in the region, and that the impact of internal political dynamics or political elites in this process must be understood only through a broader economic perspective. Throughout his book, Glasser builds upon the modern "rentier state" hypothesis which argues that high levels of exogenous revenues (oil, pipeline, and canal revenue, foreign aid, etc.) have inhibited the liberalization of Middle Eastern states. He expands this notion to argue that states lacking exogenous revenues have experienced acute fiscal crises that have led to center-right and neoliberal electoral coalitions. On the other hand, he contends that regimes with greater exogenous resources have been able to weather economic crises successfully and hence have developed more heterodox, populist parliamentary majorities.
Glasser primarily cites political and historical evidence from Egypt, Morocco, Turkey, and Kuwait in his analysis, emphasizing that his analytical framework can apply equally well to each of the nations' varied regime types. Glasser interprets and analyzes various historical data, economic and political trends, and statistical revenue information to develop his hypothesis, placing each of his exemplar polities within a categorical framework based on the percentage exogenous revenues contribute to the states' total revenue.
Representing "minimally rentier" states, or those whose exogenous revenues comprise less than 20 percent of total GNP, are Turkey and Morocco. Both nations faced serious economic crises and resources gaps in the late 1970s and early 1980s, and were forced to embrace the neoliberal economic policies of international creditors and organizations. Subsequently, both regimes manufactured a system of popular representation that deliberately favored center-right bourgeois groups, enabling them to dominate parliament. The category of minimally rentier states can be broken down further into two sub categories. In Turkey, representative of the relatively democratic alternative, the military Junta engineered the parliamentary majority of orthodox, center-right bourgeois groups between 1982 and 1984. In Morocco, representative of an authoritarian alternative, the monarchy ensured that orthodox parties and groups dominated the parliament, pursuing policies of macroeconomic liberalism.
Egypt represents the second category of "semi-rentier" states in Glasser's framework. Exogenous revenues in Egypt were approximately 45 percent of total state revenues during the 1980s. The higher level of external revenue enabled an insecure regime to pursue populist policies and postpone liberal economic reforms. The critical 1984 elections in which the government managed to secure the dominance of populist, center-left groups were representative of this posture. Unlike minimally rentier states, Egypt was able to use exogenous rents to weather economic shocks, and forestall macroeconomic orthodoxy and the favoring of bourgeois groups, while preserving a center-left, populist parliamentary majority using similar electoral controls to those used in Morocco and Turkey (redistricting, etc.). However, Egypt still faced the dangers of economic stagnation and decline, and therefore was forced to incorporate center-right groups in an oppositional role within parliament to ensure their support and resources.
Glasser's third category, the "highly rentier" state, is represented by Kuwait. Such a state receives at least 75 percent, and often, as in the case of Kuwait, more than 90 percent, of their revenues from exogenous sources. These (typically Gulf) states often use the display of a parliamentary process to undermine the power of the bourgeois groups. These groups, whose resources are unimportant to the state, may threaten the political power of the regime, and hence the regime spends the state's abundant exogenous resources on populist measures that legitimize the regime in the eyes of the citizenry. Pursuing this strategy in Kuwait, the ruling Al Sabah regime was able to marginalize bourgeois groups in the parliament throughout the 1980s, since it did not require their participation in realizing economic development policy.
Although Glasser did an exceptional job of analyzing the applicability of his framework in Morocco, Turkey, Egypt, and Kuwait, the applicability of the concept to the region as a whole and the general organization of the work are at times vague and uncertain. Glasser anticipates this criticism, however, and provides the reader with several assumptions including that his interpretation is limited to the period of regional economic turbulence in the 80s and 90s, and to polities that to some degree have implemented strategies of electoral participation or empowerment during the period. With such a narrow regional, chronological, and political focus, Glasser's framework, to some degree, lacks sufficient generality to be applied to nations other than the four he directly studies. He briefly describes other states in which his framework is a useful analytical tool, but, in general, the scope of the paradigm is rather narrow. Also, the work tends to be a somewhat redundant in its analysis, and the organization of data could have been aided by a focus on one nation at a time without scattering similar, linked information throughout separate sections. These criticisms are somewhat minor, however, and the overall quality of Glasser's argument and evidence far outweighs them.
With Economic Development and Political Reform, Glasser breathes new life into rentier state literature. Throughout the 1990s, analysts have begun to focus pessimistically on Middle Eastern "exceptionalism," as 20th century global trends towards democratization and liberalization fail to emerge in the region. General rentier hypotheses were formulated, contending that exogenous revenues have inhibited liberalization in the Middle East, but little understanding exists on actually how and why political liberalization has evolved differently in the region as a direct result of economic conditions and policies. Glasser fills this void by convincingly expanding and reshaping rentier state concepts to explain how and why exogenous revenues shape electoral outcomes, regime economic policies, and political liberalization in general. In fact, the book might very well signal the beginning of a subtle shift in the entire direction of rentier state political analysis in the Middle East-a move towards incorporation of the region's process of liberalization into current literature on democratic transition, rather than exclusion and focus on Middle Eastern "exceptionalism."
Glasser's work is highly relevant to our time as the United States and other Western democracies grapple with the problem of how to approach the increasingly complex issue of political and economic reform in the Middle East. His analysis boldly elucidates the notion that imposing both political and economic reform in the Middle East may in fact be impossible. If exogenous Western financial donations to Middle Eastern states-intended to help reform the states economically-contributes to statist and populist regimes hostile to political liberalization (as Glasser's work suggests), then economic stability and democratization may in fact be mutually exclusive. This has potentially dramatic ramifications for international financial organizations such as the WTO and World Bank, which are only gradually beginning to form a complete understanding of the sociopolitical impact of economic policies in the region. In bringing these issues to light throughout his book, Glasser reveals his advocacy of a more flexible and heterodox Western conception of development and liberalization that would dramatically relieve policy dilemmas currently plaguing Middle Eastern states.