06.06.2023

Departmental Seminar: Locked Out of Development: Insiders and Outsiders in Arab Capitalism

Steffen Hertog (London School of Economics and Political Science) at Wednesday, 7 June 2023, 16-18 h c.t., Institut für Politikwissenschaft, Room 124 or via Zoom

Locked Out of Development: Insiders and Outsiders in Arab Capitalism (Cambridge UP)
    This contribution argues against the received wisdom that neo-liberal reforms are the main culprit explaining slow growth, corruption and inequality across low- to mid-income Arab countries. It instead proposes that it is the uneven presence of the state – over-protecting some while neglecting others – that accounts for the region’s lopsided development and creates deep insider-outsider divides. These run between protected public sector workers vs. precarious workers in the informal private sector; among firms, they run between crony insider companies and small, unconnected firms in the informal economy. Uneven state intervention and insider-outsider divisions reinforce each other and together contribute to an equilibrium of weak productivity and skill formation, which in turn deepens insider-outsider divides.
    While some of these features are generic to developing countries, others are regionally specific, including the relative importance of the state in the economy and, closely related, the relative size and rigidity of the insider coalitions created through government intervention. Insiders and outsiders exist everywhere, but the divisions are particularly stark and immovable in the Arab world’s “segmented market economies” where they undermine the negotiation of a more equitable social contracts.

Professor Dr Steffen Hertog is Associate Professor in Comparative Politics at the London School of Economics and Political Science. He joined the Government Department in 2010 and was previously the Kuwait Professor at Sciences Po Paris, lecturer in political economy at the University of Durham, and post-doctoral research fellow at Princeton University. He holds an MA from the University of Bonn, an MSc from the School of Oriental and African Studies (SOAS, London), and a D.Phil. from the University of Oxford.