MENA Development Report: Eruptions of Popular Anger (ePub)

Eruptions of Popular Anger: The Economics of the Arab Spring and Its Aftermath sets out to answerthree puzzles—the “Arab inequality†? puzzle of civil uprisings in countries with low-to-moderateand stagnant economic inequality, the “unhappy development†? paradox of increasing dissatisfactionat a time of moderate-to-rapid development, and the paradox of political violence in middle-incomecountries.The book’s empirical investigation rules out high and rising inequality as a reason for the ArabSpring uprisings. It shows that the real problem was the erosion in middle-class incomes and thegrowing dissatisfaction with the quality of life, the shortage of formal sector jobs, and corruption.Frustration was particularly high among the young, educated, middle-class residents in urban areas.The old social contract, which had delivered development results in the past and under which Arabgovernments provided public-sector jobs and subsidized services in return for subdued voice, wasunsustainable and malfunctioning. The public sector could no longer be the employer of choice, butthe private sector did not generate enough formal sector jobs, because of distortions that constrainedits growth and policies that offered advantages to a few firms with political connections, limitingcompetition and private investment. The breakdown in the social contract increased the premiumon freedom and created impetus for political change.This report shows that the Arab Spring revolutions and the subsequent spread of violence andcivil wars in the post†“Arab Spring Middle East and North Africa region can be traced to the brokensocial contract, institutional weaknesses, and regional divisions in societies polarized along ethnic andsectarian lines. The Arab Spring and its aftermath indicate the need for a new social contract underwhich governments promote private-sector job creation, design public services in a way that holdsproviders accountable to beneficiaries, and promote inclusion and good governance.