Contemporary Intellectual Currents in the Context of Arab Development

The ACRPS has published Contemporary Intellectual Currents in the Context of Arab Development by Albert Dagher (138 pp.). The book sheds light on the intellectual trends that offer more logical solutions to the problem of Arab development, presenting the ideas of three contemporary currents that address the state’s role in development as an industrial transition: comparative institutionalism, post-Keynesianism, and new structuralism. It provides a review of the literature on the political economy of the Arab state, guided by alternative policies in the development field as suggested by the Asian experience: the sole case that has allowed the countries implementing it to emerge from backwardness and achieve “belated industrialisation”.

The book supplies a theoretical guide to alternative Arab development policies through these three schools of thought, as well as a practical guide via its suggestions in the fields of public administration and how to engage with international relations, higher education, and industrialisation.

Currents in economic thought and Arab development

Is there a need to expand the intellectual discussion of Arab development and the reasons why it has become impossible? Were the Arab uprisings since 2011 concurrent with a genuine debate over developmental alternatives? Do neoliberal approaches to development continue to dominate the discussion? Is there not a pressing need to examine intellectual currents that are peripheral yet offer more logical solutions to the development problem?

Dagher explores three contemporary currents that address the state’s role in development as an industrial transition and the role of the international system and its extensions in every developing country in obstructing such a transformation: the comparative institutional approach, new structuralism, and post-Keynesianism. The historical institutionalist current was defined most famously by Karl Polanyi, then elaborated in the 1980s and 1990s by institutionalists such as Peter Evans, and Theda Skocpol. Their works differentiated it from neo-Marxism and from the neo-utilitarians who provided the intellectual basis for neoliberalism in the 1980s.

Raymond Hinnebusch’s works were adopted in defining new structuralism and setting it apart from structuralism, which holds the international system responsible for the fate of third-world countries; by contrast, new structuralism accounts for the role of local elites in making subordination a fait accompli. Post-Keynesian scholars, especially Mario Seccareccia and Marc Lavoie, sought to define Keynes’ thought differently than the neo-classical school and to introduce “post-war Keynesianism”. Its most important components include the priority of investment demand over savings in achieving growth and the responsibility of the state to take the private sector’s place should the latter decline to invest; this happens when the members of this sector become financial rentiers, at which point Keynes argues that the state must “nationalise investment” and become the economy’s “leading investor”. All of these currents offer an answer to the problem of development. Comparative institutionalism gives evidence for the necessity of the state’s role in this process and sets conditions; post-Keynesianism elaborates the relevant state policies; and new structuralism identifies the obstacles arising from the nature of the international system that prevent the state from taking on this role.

Transformations of the Arab state

Dagher argues that the key problem of the Arab state becomes apparent through its public administration, which does not fulfil Weberian conditions for the rise of capitalism in the West. Such an administration would be merit-based, give workers job security, protect them from lobbying groups through guarantees, and allow them to become experts in their fields to stimulate development. International institutions have proposed a disastrous solution for the inflated bureaucracies of the Third World based on dismissing workers and “streamlining” them to create a “minimal state”. Because this has been impossible to implement, these employees have instead faced pay cuts and become unable to support themselves. More dangerously, this assessment of administrative reform by international institutions assumes that dismissing workers will allow them to find jobs in the private sector. The author holds that this is incorrect, and that the death of administrative reform (as these institutions see it) would be to rely on the market economy and private sector to absorb the labour force, and to absolve the state of responsibility.

Recent years have shown that no Arab state is willing to challenge the process of integration into the international system. These states instead exhibit a growing commitment to international agendas and directives, such as agreeing to “float” national currencies as an IMF condition for loans: as this entails a staggering drop in exchange rates, the price of imports increases, wages lose their purchasing power, and millions fall below the poverty line. This has coincided with greater international intervention in establishing ruling Arab elites, and the entrenchment of authoritarianism and clientelism.

At the level of industrialisation, Dagher mentions that scholars associated with international institutions admit that the states that achieved a true industrial transition in the 20th century (e.g., South Korea, Taiwan, and Japan) refused to rely on foreign direct investment, and instead began buying electronic devices, then learning to disassemble and reassemble them. Indeed, experiences with reliance on foreign investment have shown that its advantages are meagre, leading to the employment of a small segment of the labour force without contributing to the construction of a national technological base. Yet experts at these institutions still insist on suggesting technology transfer via foreign corporations as the only approach for developing countries. Instead, the author argues that the model that Arab states ought to follow is that of South Korea, Taiwan, Japan, and Iran, in terms of purchasing electronics internationally and learning to take them apart as a gateway to building a true local technological base and achieving autonomous development.

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