Columbia International Affairs Online
CIAO DATE: 8/5/2007
The Challenge of Economic Reform in the Arab World: Toward More Productive Economies
2007 May
Carnegie Endowment for International Peace
Abstract
The issue of economic reform in the Arab world is surrounded by many key questions. How do we define meaningful economic reform and what does it entail? To what extent has such economic reform advanced in the region? What is needed to accelerate the process? Are ruling elites motivated to undertake real economic reform and are they capable of doing so? Are state institutions able to implement economic reform and handle its consequences? Is it possible to have economic transformation without political reform? Furthermore, in individual countries, what can we say about the timing of reform-has it been planned out and phased in or pushed through quickly in response to crises? Who have been the winners and losers? What has been the interplay between economic and political reform-have they proceeded independently or can we detect a direct connection? What has been the role of external rents-whether oil revenues, remittances, or bilateral aid-in the speed or slowness, the depth or shallowness, of the process?
Providing in-depth answers to all or even most of these questions is beyond the scope of this paper, especially given that the motivation and factors shaping reforms and determining their outcomes are not uniform across the region. In addition, the structures of national economies differ, as does the nature of the social contract. However, this paper, an outgrowth of the Carnegie Endowment's interest in economic reform in the Middle East, provides a conceptual outline for assessing the changes up to this point. It aims to provide a framework for assessing economic reforms in terms of the motivation behind them, their nature and extent, and the success and/or effects of their implementation. This framework is intended to pave the way for a set of country case studies that will examine these issues in depth in each country and answer some of the questions raised above. It is only through case studies that an adequate understanding of the key drivers and obstacles to economic reform can be understood. Nevertheless, one can identify broad trends in the region and explore the basic concepts and categories involved in each.
