a new social contract for the middle east and north africa · • not to see a social contract as...
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© d·i·e Markus Loewe: A new social contract for the MENA 1
A new social contract
for the Middle East and North Africa:
Introduction to the Third International IPR-MENA
Social Policy Network Conference
German Development Institute (DIE), Bonn, 5-6 December 2016
Markus Loewe
German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)
© d·i·e Markus Loewe: A new social contract for the MENA 2
Arab uprisings (2011) have shown:
• MENA states much more fragile than many observers thought
• The combination of material legitimisation (through rent redistribution)
and repression seems to be
insufficient for regimes to
survive on the long-term
• Short-term stability
can be
at odds with
long-term stability
Background: Arab uprisings (2011)
© d·i·e Markus Loewe: A new social contract for the MENA 3
After the Arab uprisings (2011 - today)
… but the Arab uprisings have not led to
the domino effect that many expected…
… at least not for the better …
Tunisia
could find its way
to democracy… Syria, Iraq, Yemen,
Libya
descended deep
into atrocious civil
wars…
Even Egypt
is back to
authoritarianism
and repression
Other countries
remain authoritarian
as well; reforms
are piece-meal
© d·i·e Markus Loewe: A new social contract for the MENA 4
Latest AHDR just released …
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“Stabilisation and development in MENA”:
• What will happen with Egypt, Morocco, Jordan, Lebanon, Iraq… ?
• What should governments in these countries do?
• How should Europe / the world act?
Implicitly: Stabilise, develop or democratise?
DIE project, funded by BMZ
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Stabilisation:
Arab uprisings (2011) have shown that
efforts to stabilise regimes on the short-run are at odds not only with
goals of economic and political dev’t
but also with long-term stability in MENA countries
Development:
Western governments cannot develop –
just support development plans of MENA governments
– which do not tend to be conducive
Democracy:
Democratic transition in MENA is improbable
(MENA regimes unlikely to disempower themselves)
Democratisation efforts can lead to unintended effects
(e.g. civil wars in SYR, LBY etc.)
Democracy is a normative goal (contested by some voices in MENA region)
The challenge
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Our question:
Can we imagine changes / reforms that
• improve the well-being of citizens on the short and long term
• improve the long-term potential of development
• but are also acceptable to the regimes
• and therefore good for short-term and long-term stability?
These changes/ reforms would thus lead to a new ‘social contract’ that
• is not necessarily ‘perfect’ by any criterion
• but pareto-superior to the current / ‘old’ social contract
Therefore, we suggest an alternative approach
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Term extensively used to describe the situation before 2011:
(e.g. Arab Human Development Reports 2002ff.; Heydemann 2004;
Hinnebusch 2015; World Bank 2014, 2015; Yousef 2004)
but often not fully defined
Expression „old social contract“: usually used to describe
• legitimisation of MENA regimes through generous provision of
material benefits to citizens
(commodity subsidies, jobs, economic possibilities) as
• a recompensation for lack of government accountability and
political participation
How could this ‘buzz term’ be converted into a useful concept?
What is a ‚social contract‘?
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Social contract:=
explicit or implicit agreement of
(i) all relevant social groups
among each other and with
(ii) the government
on rights and obligations towards each other
In contrast to the tradition of old liberal philosophers
(Hobbes, Locke and Rousseau),
we suggest
• not to see a social contract as anything good or bad by definition
• just something that tends to exist in most countries
What is a ‚social contract‘?
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Contents of social contracts:
„parties“ promise exchange of „deliverables“:
What is a ‚social contract‘?
„Government“:
gives one or more of the following:
• state and human security
• rule of law (incl., of course, law itself,
especially the human and civil rights),
• political participation
• access to resources (land, water...)
• infrastructure
• social services (education, health...)
• wealth redistribution,
• economic policies
• ...
„Society“ :
gives one or more of the following:
• loyalty
(recognition of legitimacy)
• taxes
• some services
(e.g. military or civil service)
• …
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One social contract can be better than the other
from the point of view of any of the contracting parties
Social contracts may endure
as long as all relevant parties are afraid that their position might
deteriorate if they cancel the contract
(anarchy, inferior social contract…)
=> some social contracts are respected although they look little
appealing for one or more of the contracting parties...
<= due to asymmetry in negotiating power
Social contracts end (in what ever way)
if any of the relevant parties believes that they
have a good chance to negotiate a new social contract
improving their own position
What is a ‚social contract‘?
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History has seen most different social contracts:
What is a ‚social contract‘?
„deliverables“ of gov‘t „deliverables“ of society
medieval Europe • limited indiv. & coll.
security
• political participation
• loyalty to king and church
• in-kind tributes
ancient Orient • indiv. & coll. security
• irrigation systems
(Wittfogel)
• some early legislation
• political participation
• submission
• in-kind tributes
• compulsory civil labour
United States
(similar:
other OECD
countries)
• indiv. & coll. security
• political participation
• rule of law
• infrastructure
• more or less social
services
• loyalty
• taxes
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History has seen most different social contracts:
What is a ‚social contract‘?
deliverables of gov‘t deliverables of society
Gulf countries • indiv. & coll. security
• generous material
benefits
• limited accountability
• political participation
• loyalty
• taxes
Other MENA
countries
• indiv. & coll. security
• social services & other
material benefits
• limited accountability
• political participation
• loyalty
• taxes
ISIS • indiv. & coll. security
• some social services
• limited accountability
• political participation
• loyalty
• taxes
• military service
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Important policy fields:
• Human security
• Social protection
• Taxation
• Economic and employment policies
• Public administration and judiciary
• Education
• Other public service delivery
• Distribution of land, water and other resources in rural areas
• …
New social contract for MENA countries
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For example: social protection
Public spending
on
social
protection and
health
(% of GDP)
On the whole, social protection spending is above average…
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For example: social protection
… but available public funds are spent on inefficient and unequitable
instruments…0 2 4 6 8 10 12 14 16
Egypt
Algeria
Yemen
Jordan
Tunisia
Bahrain
Moroco
Syria
Oman
Mauritania
Pension schemes
Health system
Cash for work
Social assistance
Child allowances
Food subsidies
Energy subsidies
Source: Loewe (2014)
(per cent
of GDP)
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For example: social protection
Food and energy subsidies are inefficient and unequitable…
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For example: social protection
Social insurance schemes benefit mainly the urban middle class:
here: the effects of public pension schemes in Jordan until about 2006
Armed forces
Civil servants
Formal employees
of private
companies
Informal sector
workers
People below
national
poverty line
per capita gross receipts
from central government budget
Source: Loewe (2013)
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For example: social protection
Source: WB (2012)
Huge errors of inclusion – also by direct transfer schemes:
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For example: social protection
MOH
Other…
HIO
0
500
1000
1500
2000
2500
3000
Source:
own design,
data from:
Egypt (2007/08):
National Health Account
m EGP / a
56% of public health expenditure
is for tertiary and secondary care,
just 18% for primary
15% of MOH spending
is on administration
Inefficient budget allocation – e.g. Egypt’s public health system:
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For example: social protection
• Reduction of food and
energy subsidies
• Reduction of social
insurance subsidisation
• direct cash transfer
systems
(public works, UCTs, social
pensions…)
=> as universal as possible
• high quality public health
system
Pareto-superior:
• low-income earners: higher net benefits, more equitable distribution, higher
relibaility, more decent targeting
• government: same volume of spending but more stability
• high-income groups: less net benits, but more stability
• middle-income groups: similar level of net benefits but from other sources
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DIE survey among business people and civil servants in Jordan (2006):
For example: public sector reform
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• Better training and higher wages for civil servants
(starting with some segments of public administration)
• Streamlined procedures
• More transparency through e-government
• Accountability through ombudsmen
• …
For example: public sector reform
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Thank you very much
for your attention!
www.die-gdi.de/mena/