Business regime loyalties in the Arab world: Jordan and Morocco in comparative perspective.

Abstract

The thesis examines why business people from various economic sectors in the Middle East and North Africa have continued to support authoritarian regimes in spite of the fact that these regimes failed to satisfy several of business' fundamental interests. Studies of business regime loyalties in Latin America argue that ineffective management of the economy by authoritarian rulers, exclusion of business people from policy making, and a significant decline in the legitimacy of authoritarian rule generally encourage business people to withdraw their support for an authoritarian regime and call for its replacement with a democratic one more likely to satisfy business' fundamental interests. However when these three conditions existed in several Arab states during the 1980s, their business communities continued to support authoritarianism. In order to explain the behavior of Arab business communities the thesis emphasizes several points. First, as long as diverse elements within the private sector can profit from economic policies, business people are unlikely to mobilize against a regime even if this regime excludes business from policy-making and pursues statist economic policies. Second, in countries where the political regime proves incapable of managing the economy, the consistent inflow of rentier income (i.e., economic aid, tourism receipts, and workers' remittances) can help protect business from the negative effects of economic mismanagement. If rentier income largely counteracts the negative effects of poor economic management on business, then the private sector is less likely to mobilize against the political regime. Third, the perceptions that business people hold toward the political alternatives to authoritarian rule have a significant effect on business loyalty to authoritarian regimes. If entrepreneurs in various sectors do not see a viable alternative to authoritarian rule, then they will continue to support it as the most likely regime to ensure stability and continuity. Finally, the views that democratic opposition groups and the general populace hold towards market-based reforms significantly affect business loyalty to authoritarian regimes. If these groups strongly oppose such reforms entrepreneurs are more likely to support an authoritarian regime even if this regime faces strong challenges from the political opposition.