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Locked Out of Development

Insiders and Outsiders in Arab Capitalism

Published online by Cambridge University Press:  22 December 2022

Steffen Hertog
Affiliation:
London School of Economics and Political Science

Summary

This Element argues that the low dynamism of low- to mid-income Arab economies is explained with a set of inter-connected factors constituting a 'segmented market economy'. These include an over-committed and interventionist state with limited fiscal and institutional resources; deep insider-outsider divides among firms and workers that result from and reinforce wide-ranging state intervention; and an equilibrium of low skills and low productivity that results from and reinforces insider-outsider divides. These mutually reinforcing features undermine encompassing cooperation between state, business and labor. While some of these features are generic to developing countries, others are regionally specific, including the relative importance and historical ambition 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, immovable and consequential in the Arab world.
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Locked Out of Development
  • Steffen Hertog, London School of Economics and Political Science
  • Online ISBN: 9781009042444
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Locked Out of Development
  • Steffen Hertog, London School of Economics and Political Science
  • Online ISBN: 9781009042444
Available formats
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To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Locked Out of Development
  • Steffen Hertog, London School of Economics and Political Science
  • Online ISBN: 9781009042444
Available formats
×