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Toward a Political Economy of the Arab Uprisings (Part Two)

[Cover of [Cover of "A Political Economy of the Middle East: Third Edition"]

[Part One of this article can be found here.]

The Evolution of the Authoritarian Coalition and the Role of the Middle Classes

In the initial decades after independence, Arab governments—and especially the republics—introduced policies that led to significant social change. In particular, statist economic policies coupled with welfare programs and subsidies on basic food items and fuel facilitated the rise of proto-middle classes. Public-sector workers, benefiting from job security and social benefits, were the most important component of the new middle classes. Also emerging was a professional class composed of doctors, lawyers, engineers, bankers, and others who enjoyed enhanced social status and a good standard of living. For decades, Arab autocrats had placed a premium on retaining the mainly secular middle-class either within the authoritarian coalition or as part of the legal opposition. For the republics in particular, social progress was at the center of their Arab nationalist credo—leaders such as Bourguiba and Nasser adopted an Atatürkian model of modernization in which the middle classes played a legitimizing role. Thus, for Arab autocrats, losing their middle-class anchors was tantamount to becoming naked dictatorships with no operational narrative.

Some members of the middle classes have been hurt by the economic liberalization of the 1990s, but others have benefitted. Low public-sector wages fueled petty corruption in areas such as health and education, generating an important source of discontent. To be sure, governments retained important policies aiding the middle classes, such as subsidies. As a result, the authoritarian bargain of the past decade evolved into an alliance between elite capital and elements of the middle classes that delivered economic benefits to coalition members but that repressed the poor. Moreover, low economic growth frustrated the educated youth aspiring to middle class status.

More than its size, it is the nature of the middle classes that changed over time. Until recently, specialists did not seem to believe that the middle classes could play an active role in leading political change. With the middle classes incorporated into the system as civil servants and employees of state-owned enterprises, their influence on policy formulation and their ability to play the role of an “autonomous actor” were effectively undercut. A new, market-oriented middle class rose in the late 1990s in response to economic liberalization. The newcomers tended to be small merchants and industrialists, often in the informal sector, who benefited from the pro-market reforms, as well as the small but expanding skilled component of the formal private- sector labor market. This group has been more politically active than older elements of the private sector. For example, the new, pro-market middle class played an important role in securing the success of the Iranian revolution in 1979 and the rise of the Justice and Development party in Turkey, and it has become a more vocal and assertive element in the Moroccan business community.

It is possible to evaluate the perceived socioeconomic conditions of the middle classes by looking at opinion poll surveys. Data from the World Values Survey provide a preliminary indication of shifting self-perceptions of citizens in Egypt. The survey, which asks respondents to identify the class to which they belong, provides a broad, self-assessed measure of well-being that goes well beyond income in capturing lifelong income, grievances, and aspirations. The analysis of opinion by social class shows that both the poor and the middle class increased their support for democracy between 2000 and 2008, but for different reasons (Diwan 2013). Among the poor, support for democracy went hand in hand with a rise in perceptions of inequality. The middle class on the other hand were much more driven by a sense of frustrated aspirations. This suggests that it was the coincidence of rising inequality and low economic opportunity, together with higher levels of education among the middle class that produced a coalition of poor and middle class citizens calling for change. Indeed, the survey shows that average financial satisfaction of the poor has deteriorated between 2000 and 2008, while that of the middle classes remains stable, and that of the rich has risen, further bolstering a sense of rising inequality during the period. While the youth may have mobilized more than other age groups in protests across the Arab region, these surveys do not support the claim that there is a generational split in opinions on the desirability of democracy at the present juncture. Instead, it seems that the parents of Egyptian middle-class youth became as unhappy as their children about their lack of job opportunities.

Deteriorating socioeconomic conditions combined with high aspirations increased discontent among the middle classes. As a result, they gradually withdrew their support for authoritarian regimes and entered into an implicit coalition for change with the poorer segments of the population. Dissatisfaction with the status quo, however, cannot simply be inferred from real economic conditions. Perceived conditions are more important in translating grievances into action than objective economic indicators. To understand the unraveling of authoritarian coalitions, we must comprehend how the middle classes have developed a sense of frustrated aspirations—an issue we address in the next section.

Perceived Inequality

It is tempting to make inequality a core driver of an understanding of the Arab Spring in the context of the transition from state quasi-socialism and populism toward capitalism. This transition appears to have generated socially unacceptable inequalities, directly by supporting the growth of a class of the super-rich and indirectly by its inability to create sufficient good jobs for the newly educated middle classes. Yet no direct evidence suggests that inequality as measured by household consumption surveys has risen sharply in the recent past. Household surveys reveal that consumption inequality has risen moderately in Egypt and fell slightly in Tunisia, but there are also indications of a rise in the urban-rural divide.

There are two reasons to think that these statistics describe only a limited part of reality. First, household surveys are notorious for undercounting the rich. There are many indications of a rise in the income share of the ten percent richest in society, who are perceived to have benefited most from a more market-oriented economy, and of the top one percent, who have benefited most from the rampant crony capitalism of the last decade. By some estimates, the top ten percent in Egypt, Morocco, Jordan, and Syria may have commanded thirty to forty percent of GDP by 2010.

Second, grievances seem connected to changes in the inequality of opportunities rather than to the inequality of incomes per se. Over time the rollback of the state had reduced the role of the state as an employer. In Egypt, for example, only twenty-five percent of the labor force worked for the state by 2009, declining from a height of forty percent of the workers. Furthermore, the bifurcation between the formal and informal private sectors has sharpened. Informal-sector workers tend not to transition into formal-sector jobs, and although public-sector employment has increased in recent years, workers who previously held positions in the formal private sector are far more likely than informal-sector workers to move into government jobs (Assaad 2011). Recent studies show clearly that the large waves of more educated workers entering the labor market were faced with an increasingly unfair situation whereby personal connections (wasta) and status were more important than diplomas in getting good jobs. With shrinking government employment, these new entrants had to divide themselves between the formal private sector, which did not grow in proportional terms and where wages were higher than in the public sector, and a large and growing informal sector, where wages were lower than in the public sector (Assaad 2009). Furthermore, the decline of health and education systems, key drivers of social mobility, had limited the ability of non-elites to advance (Salehi-Isfahani, Belhaj, and Assaad 2011). Empirical research has only recently started to focus on this type of inequality, but recent work is starting to show that measures of inequality of opportunity show a dramatic increase in recent years. In the context of post-independence social bargains, in which citizens experienced and came to expect real social mobility as a result of state economic and welfare policies, the inability to advance socioeconomically must have been especially frustrating.

The Role of Political Islam in the Arab Uprisings

Before concluding, it is essential to address one additional factor—the role of political Islam—in the evolution of politics across the region both prior to and during the uprisings. In the aftermath of the Arab uprisings, Islamists have become increasingly important if not dominant actors in Tunisia and Egypt and, to a lesser degree, in Libya and Yemen. It is widely accepted that the uprisings were not driven by Islamists, or even by increased popular support for Islamists, who were the most vocal opponents of authoritarian rulers. Rather, Islamists were the main beneficiaries of the transitional political systems that emerged after dictators were ousted. Although Islamists did not initiate or lead the revolts, they have played an indirect role in driving the Arab uprisings.

In particular, two mechanisms seem to have contributed to the defection of the middle classes from authoritarian bargains. First, since the 1990s, Islamists across the region have become less threatening because they have increasingly moderated their ideology and tactics. For example, in 2004 the Muslim Brotherhood in Egypt made a public commitment to abide by a constitutional and democratic system that called for the recognition of “the people as the source of all authority,” and it endorsed the principles of the transfer of power through free elections, the freedom of belief and expression, the freedom to form political parties, and the independence of the judiciary (Shahin 2005).

Similar processes of moderation took place in Turkey and Tunisia. In Turkey, a combination of the lessons from repression, opportunism, and the growth of a friendly middle class compelled the AKP to moderate (Demiralp 2009; Mecham 2004). In Tunisia, the Al-Nahda leadership claimed in 1981, “We have no right to interpose between the people and those whom the people choose and elect” (Tamimi 2001). The moderation of Islamists may have altered the calculations of socially liberal groups that had feared a takeover by Islamic parties because of their divergent views on issues such as civil rights, the separation of mosque and state, the role of women in society, and foreign policy. Even in the context of declining economic benefits, middle-class elements may have opted to support autocrats as long as Islamists championed a very different picture of civic and political life. As more moderate Islamic parties emerged, they may have garnered more support or at least tolerance among the middle classes. At the same time, insurgent groups using violent tactics declined. If fear of Political Islam had perpetuated authoritarian rule, the subsequent decline in that fear undercut support for dictators.

Second, some of the messages of Islamist parties, which emphasized corruption and the lack of social justice under authoritarian rulers, reflected and may even have amplified growing discontent among the middle classes. Indeed, the leaders and cadres of mainstream Islamist groups, such as the Muslim Brotherhood in Egypt and its branches and analogous organizations in other Arab countries, were composed of middle-class professionals who were shut out of employment and other opportunities under crony capitalist systems.

Opinion polls in the Arab world undertaken by the Arab Barometer reveal that people favor more democracy and more Islamism at the same time. A more detailed analysis using data from the World Values Survey for Egypt shows that adherents of Political Islamism did not support democracy as much as secularists in 2000. By 2008, supporters of Islamism had become a force for democratization as much as secularists among the middle class (Diwan 2013). This finding suggests that Islamism acts as a conservative veil for the poor only, trumping their class interests. After 2008, however, this effect did not operate among the middle classes, either because they were better educated and/or because they were more likely to be influenced by more moderate parties within the Islamist umbrella.

Concluding Remarks

This framework we developed above includes the following key elements. First, in the mid-1980s, the rollback of the state began without a concomitant democratic opening. In this context, an elite, capitalistic class benefited from personal connections to acquire disproportionate access to lucrative opportunities. The elite allied with state security apparatuses, which enforced their dominance through repression (sticks) and economic co-optation (carrots) to maintain the support of the middle class. Tight state-business relations within a supposedly “liberal” economic environment and political repression did not translate into a successful industrial policy. Instead, a system of gift exchange between the state and key constituents developed; the moderate performance of this system inhibited growth and thus did not foster the creation of good jobs. Across the Arab world, countries that initially adopted distinct economic strategies and political regimes ended up with variants of the same crony capitalist systems. Divide-and-rule strategies, based on a combination of subsidies and repression as well as fear-mongering about political Islam, were the foundation of an increasingly fragile governing coalition.

Supported by the West, this autocratic, low equilibrium lasted for several decades. For a time, with the co-optation of the middle classes through subsidies and fear of a takeover by Islamists, and with the poor repressed and struggling to make ends meet, authoritarianism could endure. Mounting fiscal pressures, driven in large part by rising subsidies and lower tax revenues, led to deteriorating social services and lower public investment, further hurting the poor and marginalized regions and leading populations to identify increasingly with the poor rather than the middle classes. In this context, middle-class elements defected from authoritarian coalitions and evolved into champions of change, driven by the lack of opportunities for socioeconomic advancement and anger about rising perceived inequalities. In particular, economic Discontent on the economic front interacted with a broader sociopolitical context to ignite the uprisings. Stagnation mixed with the perceived rise in inequalities and lack of “social justice,” a perception that had been mounting as a result of the rollback of the state and economic liberalization characterized by cronyism. As a result, access to economic opportunities was not meritocratic or governed by a level playing field, but rather was mediated by connections to political leaders and their narrowing circles of allies. In the context of redistributive commitments by rulers to populations, which increased citizen expectations of the state in both the “populist” republics and the more conservative monarchies, the inability of government to provide for citizens and a growing sense of economic insecurity were particularly egregious. This combination of factors created a dam of accumulated grievances and rising aspirations, ready to burst. The inter-linkages between economic and political grievances point to the value of a political economy perspective in understanding the Arab uprisings.


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[This article is adapted from the chapter “Conclusion: The Political Economy of the Arab Uprisings” in A Political Economy of the Middle East: Third Edition, ed. Alan Richard and John Waterbury (Boulder, CO: Westview Press, 2013). It was first published in Arabic in Kalamon, Fall 2013.]

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