Examining Critical Junctures in Macroeconomic Policy in Non-democratic States: Algeria and Jordan in Comparative Perspective (original) (raw)
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The paper uses framework in examining changes in macroeconomic policy in Algeria and Jordan during the late 1980s, to determine if these policy changes constituted critical junctures. Both cases are significantly different from those studied previously using the framework, as neither state was a liberal democracy. The absence of democracy, and as a consequence of accountability, is a factor that the framework has not previously had to contend. This study will also enable us determine if the framework is sufficiently robust to be applied to the examination of macroeconomic policy changes in non-democratic states. The findings show that in both countries political liberalisation did not follow upon economic liberalisation, giving lie to the often expressed assumption that economic liberalisation and democratization go hand in hand. Instead, as the ruling elites in both countries sought to revive their economies, while maintaining its own positions in society, economic policy reforms required a gesture towards democratization, but little else.
The Paradox of Economic Liberalisation and Democratisation Measures in Algeria
Alternatives: Turkish Journal of International Relations, 2003
Algeria always has a special status within the Arab World and the Middle East. Algeria's War of Independence that last eight years was the first and only war within the Arab World that had won on the battlefield against an European colonial power. Followingly, Algeria received deep respect as being one of the founding and leading countries of "non-aligned" movement under the cruel competition of the Eastern vs. Western blocks. Most recently, Algeria deserved distinguished emphasize through the first democratically held general elections in the Arab World in December 1991. In this article, I would focus on economic and political liberalization measures that introduced to Algerian society in the late 1980s and early 1990s. Simply it would be argued that economic liberalization measures constitute fundamental and foundational clash with traditional political establishment and prevailing policies of the Algerian government since the independence.
The Impact of Economic Reform on Political Reform: Jordan as a Model
The objective of this study is to identify the impact of economic reform on political reform in Jordan. This is achieved in three stages, commencing with developing the methodological framework of the study. This was followed by creating a theoretical scale of the relationship between economic and political reform by the use of moderating variables, which was applied to the Jordanian experience in the third and final stage of the research. The study results revealed that the economic reform (the independent variable) had a moderate impact on political reform (dependent variable) during the study period (1989-2016). The overall value of the six indices of economic reform was moderate, as was the overall value of the six indices pertinent to political reform. Based on these findings, it can be concluded that Jordan's political regime is partly free, with restricted democracy that has presently not fully matured , as it suffers from governmental and parliamentary instability, weak political participation, widespread corruption and weak governmental efficiency. The results also suggest lack of political will to achieve the desired reform and absence of an economic vision to lead the country to a better future.
Working Paper, The Role of the State in Arab Economies
The question of historical roots of socio-economic underdevelopment of the Arab region has been a perennial theme in the development studies in the Global South. While some scholars highlight the long durée effect of the Ottoman institutional legacy, others place the blame on the legacy of exploitation and expropriation of the colonial practices in the region. The article offers a through critical review of the path dependency account of underdevelopment that traced it back to the legacy of the Ottoman Empire. I depart from the colonial polices that laid the groundwork for the post-colonial elites to usher in their populist model of state capitalism and bring out the agency of the post-colonial elites that altered the socio-economic foundation of the political class and transformed processes of capital accumulation and labour commodification. I argue that the processes of state-building accompanied by social engineering measures represented a ‘critical juncture’ that impinged on state autonomy and its bureaucratic capacity and left indelible imprint on development strategies. The article unpacks three mechanisms that proved consequential for economic policies outcomes: 1) the degree of elite autonomy to formulate policies; 2) the power of social classes to contest economic policies; and 3) the capacity of state bureaucracy to implement policies and allocate resources. In analyzing state’s domineering position in the Arab region, a large corpus of the exiting comparative political economy literature tends to reify the state and separates it from domestic social contexts by reducing its power to the coercive capacity. A critical political economy perspective, that examines the interaction between “elite deals” and “social bargains”, offers a nuanced account for varied development and socio-economic records in the region. The article also generates provisional hypotheses and points to different research areas that have not been addressed adequately or conclusively in the available political economy literature.
(2003) Algeria’s Political Economy (1999-2002): An Economic Solution to the Crisis?
This article provides a detailed critical analysis of the economic policy implemented by the Algerian Governments between 1999 and 2002 (under the presidency of Abdelaziz Bouteflika), of its results, and of the advance of their structural reforms program. In this context, the social base of these reforms and the degree of social and political consensus about them are considered. Finally, the paper reviews the principal aspects of economic policy that will determine how far this policy will contribute to offering a solution to the serious crisis that Algeria has been undergoing since 1988 and to deactivating the risk of social instability that haunts the country: the issue of employment, the creation of a free trade area with the European Union and its impact, the role of the private sector and export diversification, foreign investment, and the regulation of the nation’s principal economic sector, the hydrocarbon sector. Within this framework, the matter of the viability of the reforms is raised, in a country dominated by the informal economy and the circuits for rent appropriation and realization that are parallel to the market, as well as the matter of the interaction between economic reform and political reform.
Review of International Political Economy, 2013
This paper argues that within autocracies the beginning of IMF-friendly trade and capital account reforms is highly contingent on the ability of alternative policy regulations to provide respective regimes with domestically needed amounts of convertible foreign exchange. A longitudinal comparison of four countries (Morocco, Tunisia, Egypt and Jordan) between the 1960s and the early 1990s in the Middle East and North Africa region shows a historical sequencing of reforms. Before the implementation of orthodox policy change, foreign exchange scarcity was managed primarily by rising restrictions, accumulation of debt and a number of unilateral country-specific strategies, including broader economic openings (infitah) and selective capital account liberalizations. However, IMF-friendly reforms only became a political option after the failure of these alternative policies and the simultaneous drying up of unconditional finance. These findings complement recent debates about the rush to free trade in at least two aspects. First, they point to distinct causal mechanisms depending on the type of political regime (e.g., autocracy versus democracy), explaining the beginning of trade and capital account liberalizations among developing nations. They specify, second, one important contextual condition in regard to the effectiveness of IMF surveillance power.
Economies in Democratic Transition: Evidence from Tunisia
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This paper aims to contribute to the meager literature on monetary policy effectiveness in Tunisia especially after the revolution of January 2011; a period during which the country entered a delicate democratization transition. On the basis of a monthly data of several macroeconomic variables during the period from 2000 through 2013 a Vector Error Correction (VEC) model is estimated. The VECgenerated impulse response functions show that the monetary policy stance, as measured by the short-term interest rate, has become increasingly more effective on real output and prices during the post-revolution period; i.e., (2011-2013) than the previous period; i.e., (2000-2010). The variance decomposition analysis not only confirms these findings but also it points out an increasing role to the real output in price variation during the political transitional period. This might be attributed to the increasing volatile environment that characterized this period, which perturbed the aggregate supply and exacerbated the aggregate demand. Another no less important finding uncovered by the model is the amplification and acceleration of the exchange rate pass-through during the transitional period with respect the pre-revolution period.
The Transition to a Market Economy: The Experience of Algeria
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In the mid-sixties, Algeria opted for a state-led development strategy based on heavy industry, planning and public sector. The vowed target was to catch up the developed countries within two decades. However, the country sounds having overestimated its capacities (technology, skilled labor force…). The failure of this strategy is announced in the 1988 social unrest and riots that resulted from the worsening socioeconomic situation since the 1986 oil choc. In effect, the legacy of two decades of planning and billion dollars' investment expenditure was disastrous: soaring unemployment, increasing poverty, deficient huge public sector, complete dependency on import of food, medicines, consumer durables… and terrorism. In the face of such a situation and squashed by the rising foreign debt service while hard currency revenues were lowering, public authorities were bound to reform the system. This is how Algeria embarked on stabilization and structural adjustment programs with the aim of setting up the mechanisms of a market economy. The period of transition from planned to a market economy that ought to be as short as possible is running for almost two decades now. As a result, the whole country is thrown in a sort of no-man's-land where neither the rules of socialism nor those of capitalism play. This paper examines the difficulties posed by the introduction of market mechanisms in Algeria and the damaging consequences of not completing the reforms. It also explores the main actions required to dig up the country from the black hole of a too long transition and let its huge growth prospects materialize.