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Historical Roots

While this chapter cannot engage with the historical roots of Arab distributional systems in any detail, some preliminary remarks are in order: First, the historical protagonists of mass employment and subsidisation arguably were the Arab nationalist republics, whose populist-authoritarian leaders aspired to the creation of a new middle class and the removal of old bourgeois elites, and

Pre-tax energy subsidies as % of gdp in 2011 SOURCE

figure 5.4 Pre-tax energy subsidies as % of gdp in 2011 SOURCE: IMF, 2013B.

who tried to leverage the state apparatus as the main driver of economic development (Henry and Springborg, 2010; Heydemann, 1999; Richards and Wa- terbury, 2007). The heavy statist legacy of these republics remains visible in the aforementioned employment and subsidy statistics but also in the heavy and cumbersome bureaucratic penetration of the lives of citizens and businesses, as evidenced by international statistics on government effectiveness and ease of doing business.

The stronger commitment to food subsidies among republics in particular reflects an agenda of redistribution. It is noteworthy that while Tunisia started to shed its socialist ambitions from the 1960s on and has gone further in liberalising than its former nationalist republican peers, it too retains large food subsidies as a core ‘socialist’ legacy.

It is likely that the populist-distributional policies of the nationalist republics put pressure on other countries in the region to play catch-up. The ideological competition between Arab nationalism and conservative monarchism from the 1950s on (Kerr, 1965) forced monarchies to step up their own distributional efforts—a decision visible in the GCC countries’ employment and subsidy policies, but also in similar policies in much poorer Jordan, which was positioned at the fulcrum of regional ideological competition for much of post-second Wold War Arab history. Morocco, as a more peripheral monarchy with deeper historical roots, appears to have been under less pressure to play catch-up.

The one republic that never quite embarked on a path of nationalist statebuilding is Lebanon (Henry and Springborg, 2010). Despite considerable energy subsidies, it is also the country with the smallest distributional footprint in the region. Its unusually weak statehood however contributed to its descent into a civil war in the 1970s that itself was shaped by the ideological and power rivalries of the region. At least in the classical period of ideological rivalry in the region from the 1950s to the 1970s, distributional state-building may have been a condition of regime survival.

The availability of both natural resource and strategic rents in the region did of course help states to engage in over-employment and, especially, provision of cheap energy. As the experience of other regions shows, however, rents do not automatically generate such structures: sub-Saharan African or South East Asian oil states for example have much lower levels of energy subsidies and tend to have smaller state apparatuses.

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