Arab Countries in Transition: Support Inclusive Institutions

It is easy to be negative about recent developments in the Arab World, and to call on the international community to disengage. Except for Tunisia, all of the Arab countries in transition are facing serious challenges. Syria is in the midst of a civil war. Libya appears to be descending into anarchy. The revolution in Bahrain degenerated into a Shia-Sunni conflict and was put down by force. Yemen is locked in a fight against al-Qaeda as well as against separatist groups. Egypt is waging its own “war on terror” with worrying consequences for democracy and human rights. Morocco and Jordan remain a long way from developing into full-fledged constitutional monarchies. 

But it is probably a mistake to call on the international community to withdraw its support. It should come as no surprise that Arab transitions are turning out to be long and difficult. A book produced by a group of scholars at Brookings in early-2012 (when the whole world was still euphoric about the Arab Spring) said exactly that.[1] It recommended that the international community take a patient and long-term view of Arab transitions.

There is still hope for Arab democracy. For decades, and even centuries, Arab countries were stuck in autocratic political systems. The Arab World seemed to be a backwater untouched by the great political, social and economic developments taking place elsewhere in the world over the last three decades. It seemed destined to remain forever stuck in the mid-20^th century.  The Arab revolutions of 2010-11 changed all that. 

The old autocratic social contract (bread vs. freedom) has been broken. Arabs are demanding more bread and more freedom. The revolutions have opened a window of opportunity for Arab societies to join the 21^st century, to develop new social contracts that respect individual freedoms and human dignity, while also focusing on economic development and social justice.    

This window of opportunity will remain open over the medium-term because the revolutions have propelled youth groups to the center of the political scene. Arab youth (60 percent of the region’s population is less than 25 years old) are leading the fight against autocracy, and have reaffirmed their belief in the universal values of liberty, equality and dignity. They are demanding the reform of Arab governance systems, which they consider to be responsible for injustices, and corruption. Some governments are trying to repress the youth movement, but history indicates that this never works. 

The Arab Spring started in Tunisia, and it continues to lead the way. Tunisia’s new constitution enshrines the new values that Arab youth insist upon: liberty, equality, justice, dignity and citizenship.

The Arab Spring started in Tunisia, and it continues to lead the way. Tunisia’s new constitution enshrines the new values that Arab youth insist upon: liberty, equality, justice, dignity and citizenship. The Tunisian constitutional process was long and difficult, but in the end a compromise was reached, thanks to the intervention of strong civil society institutions, notably the labor unions.

Morocco’s experiment of gradual reform led by the palace could eventually also prove successful. Morocco has passed a new, and more democratic, constitution. It carried out free elections and the leader of the party that won a plurality in parliament is heading a coalition government.  However, the government remains weak, and there continues to be dissatisfaction with the formal political process. Therefore, it is likely that further democratic reforms will be needed in Morocco.

Egypt, the largest Arab country, has traditionally been the trend setter in the region. That is why the recent political turmoil and violence are serious causes for concern. But Egypt’s problems should not conceal the fact that there has been some progress toward democracy. A new constitution has been passed which, if applied properly, protects freedom, diversity and equality of all citizens. Presidential elections are scheduled for the last week of May. Most observers believe that the outcome of those elections is a foregone conclusion. Nevertheless, they have engendered a real public debate about the future of the country between two strong, and popular, presidential contenders.

Egypt has a long way to go. It will probably take years, even decades, to build the necessary democratic institutions, improve some key existing institutions like the judiciary and the police, and change the country’s autocratic political culture. The challenges are huge. Nevertheless, given the profound changes that have already taken place in Egyptian society, it appears likely that the country will continue on the road to democracy.

How can the international community help? It can prioritize support to inclusive and democratic institutions. Inclusive institutions are necessary for democracy as well as for economic growth and social justice. Libya’s problems today reflect the fact that there are no well-functioning institutions in the country. Egypt is facing challenges, because its only strong institution is the military. Morocco has been able to choose an evolutionary path towards full democracy, because the palace is a strong and credible institution that can lead the process. Tunisia has been more successful than its neighbors because it has strong civil society institutions.

Good governance, defined as the extent to which the institutions and processes of government provide decision makers an incentive to be responsive to citizens, is also important for economic growth and equity. The main explanation for different economic outcomes among countries is different institutions. Inclusive institutions lead to the creation of inclusive markets that support growth and equality of opportunity. Conversely, extractive institutions stifle entrepreneurship and creativity and thus lead to low growth and high inequality.[2]

Arab countries in transition are facing huge opportunities, but also huge challenges. The revolutions have broken a wall of fear, and have destroyed the old autocratic social contract.

The Arab lower middle class and the poor have had no voice in economic decision making. This could explain why their interests were not served by economic policies. Inclusive economic institutions that would give voice to ordinary citizens, including the poor, in economic policy making, and empower them to hold government officials accountable, would increase the probability that an agenda for achieving social justice is actually adopted and implemented.

In the short term, the focus could be on building inclusive economic institutions that are important for growth and equity as well as for democracy. This would include strengthening labor unions, farmer organizations (particularly those that group smallholders and family farmers), and other civil society organizations to ensure that workers, smallholder farmers and other marginalized stakeholders have a voice in economic and political debates. It would also include support to finance and planning ministries to change decision making processes so that they include broad-based consultations, as well as reforms of the civil service and government processes so that they are more responsive to citizen demands.

Some members of the international community are well equipped to provide support to better governance and institutional development. For example, the United Nations Development Program has a mandate in the area of governance that includes the principles of transparency, voice, and accountability.  The Food and Agriculture Organization of the United Nations has a great deal of experience in supporting farming organizations, while the International Labor Organization has traditionally worked with labor unions. UN agencies are viewed as politically neutral and therefore can provide needed support to NGOs, legislatures, and the free press without being accused of political meddling. The International Monetary Fund and the World Bank also have vast experience in supporting institutional development, particularly through reforms of public financial management and civil service reforms. The Japan International Cooperation Agency is already working with the Egyptian government to support inclusive planning. The objective is to enhance the transparency of economic policy-making, and provide greater voice to different stakeholders as they participate in the planning process.

Arab countries in transition are facing huge opportunities, but also huge challenges. The revolutions have broken a wall of fear, and have destroyed the old autocratic social contract.  Arab societies are adopting universal values of liberty, dignity, equality and justice. But the transitions are proving to be long and very difficult. The international community could play an important role. Supporting the emergence of new, inclusive economic institutions would be an important contribution to democratization as well as to social justice in the Arab World.

[1] Amin, M. and others (2012), After the Spring: Economic Transitions in the Arab World, Oxford University Press: Oxford.

[2] See Acemoglu, D. and J. Robinson (2012) Why Nations Fail: the Origins of Power, Prosperity and Poverty.  Crown Publishers: New York