States, markets and power: International political economy and the new Middle East

By Erin A. Snider, Texas A&M University

*This memo was prepared for the the “International Relations and a New Middle East” symposium.

Questions about the economy were undeniably at the heart of the Arab uprisings. The clearest and most iconic expression of this centrality was heard in the chants demanding, ‘bread, freedom and social justice,’ which echoed throughout protests in the Arab world in 2011. For many in the region, this expression reflected deep frustration with declining living standards, diminished opportunity, corruption and ultimately the organization of the economy by authoritarian regimes. In the months thereafter, many scholars turned their attention towards understanding how economics mattered in the uprisings, raising fascinating questions about the interplay of processes linking the region’s economies with that of the international: the effects of globalization; changes in commodity prices; perceptions of inequality; the role of remittances; and the effects of neoliberal reform policies.

Inquiries into economic causes also opened a door to challenging questions about the motivations and role of international and regional actors in aiding, and in some cases, containing the political transitions that would follow. The uprisings may have represented a euphoric moment for citizens in the region, but for others, it represented a rupture and threat to their respective interests in the existing regional order. Expressions of support for the uprisings from some donor governments and organizations were often suffused with apprehension about the best way assist emerging political actors in an enormously fluid political environment. For other actors, that apprehension reflected an explicit fear that new political forces might jeopardize their own commercial and strategic interests in the region.

As the five-year anniversary of the uprisings approaches, it is striking to note how little such questions about the economy and the structure of economic power in the region are now discussed. Egypt’s recent economic development conference illustrates seemingly strange contradictions in the wake of the uprisings. Over three days in March 2015, the Egyptian government held its economic development conference in the Red Sea resort town of Sharm El Sheikh. More than 1,500 delegates attended the conference, including representatives from over 750 international companies. No expense was spared for an aid conference meant to showcase the Egyptian government’s plan to tackle its abysmal economy, promote investment opportunities and ultimately secure broader international support for its president. On the first day of the conference, Saudi Arabia, Kuwait and the United Arab Emirates announced $12 billion in new loans and grants to Egypt, bringing their total aid to $25 billion since President Abdel Fattah al-Sisi’s ascension. Most of the megaprojects unveiled by the government to anchor its development strategy were awarded to Gulf-based real estate and development companies and were striking both for their disconnect from reality and their similarity to Mubarak era development strategies that had become synonymous with corruption and exclusion. Examples of such projects included plans to build a new capital city whose aesthetics reflect those of the Gulf with an amusement park seven times larger than Disneyland; a new compound near Sheikh Zayed with a glass pyramid skyscraper, malls and luxury housing; and plans to privatize beaches west of Alexandria.

A closer inspection of the projects and their justification underscores that the conference was less about economic development and more about cementing the foundations of economic diplomacy established between President Sisi and his Gulf partners in 2013. The government’s estimations for the number of jobs it claims such projects will generate seem more aspirational than grounded in any real economic analysis. Visibly absent from the conference was any recognition of more pressing socio-economic issues, and strategies to tackle challenges such as providing what Egypt’s own Ministry of Housing acknowledges as 500,000 new homes needed annually for lower income housing. The topic of social inclusion was notably relegated to the very last day of the conference schedule on a panel absent of businessmen.

Such changes in Egypt and other states in the region suggest the re-organization of political power through the economy with reforms focused on stabilization, containment, and the preservation of donor interests rather than emancipatory or structural changes. The path of present transitions thus raises important questions about the nature of shifting power structures and their relationship to divergent outcomes in the region. What is the relationship between uprisings in the region and the economic interests of domestic, regional, and international actors? How have economic demands by different actors shaped political outcomes? If economic grievances were a driving force behind the uprisings, why haven’t international donors and transitional governments adopted more aggressive responses to redress socio-economic issues? What influence have regional and international pressures had on the form of domestic transformations (or reversals) that have occurred thus far?

These questions broadly capture critical issues of political economy that gave rise to the uprisings and that are now shaping the direction of present transitions in the Middle East. Ten years ago, Halliday characterized political economy in the region as “an indissoluble interconnection of political factors—states, conflict, and ideology—with the economic—production, finance, technology.”[1] The centrality of these factors to new and old questions about the international relations of the Middle East is clear whether we are examining conceptions of power, alliance politics, security interests, or the role of norms and institutions in the region.

Scholars in this symposium were asked to think about how IR theory might illuminate Middle East international relations since 2011, and whether Middle East international relations might challenge IR scholars to think more creatively about international relations. The economic questions raised by developments in the Middle East present an important opportunity to reflect on the orientation of international political economy (IPE), the sub-discipline of IR concerned with questions of power and wealth in the international system. Over the last three decades, the field of IPE has evolved considerably, embracing different approaches to explore the interaction between politics and economics; states and markets; globalization; multilateral institutions; trade; and multinational corporations. While many foundational works in IPE have contributed important insights to our understanding of the global economy, its engagement with the Middle East has been limited. The region’s absence from the conversation of mainstream IPE is particularly striking since 2011. In the sections that follow, I explore possible reasons behind its omission and discuss how the inclusion of developments in the Middle East would enhance both the study of IPE and Middle East political economy.

International Political Economy and the Middle East

A special 2009 issue of the Review of International Political Economy (RIPE) on the state of IPE provides some insight into the relative absence of the Middle East from the field. A survey conducted by Maliniak and Tierney of IPE scholars in the United States found that more were “likely to believe East Asia is strategically important today compared to non-IPE people, 23% to 17%, while 6% fewer IPE scholars believe that the Middle East is the most strategically important region today.”[2] Regionally, the authors found that IPE scholarship focused more on developed countries, with 35% of articles concentrated on the U.S., 35% on cases from Canada and Western Europe, and 29% on data and cases from East Asia.[3] Those remaining covered what the authors called global work drawing on data from “every country or region in the world.”[4]

Beyond perceptions of strategic importance, the findings also seem to reflect disciplinary biases and incentive structures that may dissuade IPE scholars from engaging with the Middle East. Over the last fifteen years, American IPE scholars have employed increasingly sophisticated quantitative and formal methods in their research. While such methods have significantly refined our understanding of many dynamics in the field, they have also been criticized for an overly positivist and narrow approach to studying the global economy. In a trenchant critique of American IPE, Cohen observes that research in the field has become data driven and “diverted away from issues that lack the requisite numbers. In effect, the approach plays a key role in defining what can be studied, automatically marginalizing broader questions that cannot be reduced to a manageable set of regressions or structured case-study analysis.”[5]

Cohen rightly notes that one of the clear consequences of this orientation of the field is the lack of incentive to tackle big questions and challenges such as those raised by the Arab uprisings.[6] McNamara echoes similar concerns about what she described as a growing “intellectual monoculture” in the field that might reify one mode of studying the economy and thus both socialize and incentivize those in the field, particularly graduate students, to value particular questions and approaches.[7] The limitations of doing research in the Middle East may feed into the dynamics suggested by Cohen. Data, when available, is often of questionable quality or has been massaged by officials to convey a reality favourable to a regime. Not surprisingly, officials in authoritarian regimes may see data as political and often view researchers interested in acquiring it or conducting surveys with deep suspicion. Overcoming such challenges to study political economy is not impossible, but it often necessitates investments in time, language skills, and creative approaches to fieldwork to which many IPE scholars may not want to commit.

The changes now unfolding in the Middle East relay the importance for IPE scholars to embrace a broader, more eclectic approach to studying political economy in order to develop a far more nuanced understanding of the domestic and international forces shaping change in the region. The foundation for such an inquiry is already in place. Some of the core works in IPE by scholars like Gourevitch, Keohane, Krasner, Lake, and Milner have contributed important insights into how the domestic and international interact to shape economic policies and aggregate interests through institutions.[8] Research by scholars such as Rodrik has tackled the effects of globalization, examining the costs and benefits of increased economic integration that may constrain policy choices available to states, particularly for social welfare.[9] Such works provide a useful frame through which to interpret change in the Middle East but could be greatly strengthened by engaging with normative IPE questions and Middle East scholarship.

The call to engage such questions echoes concerns by many of the field’s founding scholars about the neglect of questions that consider how values and interests shape political economy. In the aforementioned issue of RIPE, Keohane observed that, “injustice and inequality are endemic” to IPE yet rarely have IPE scholars deeply engaged with what would seem an obvious and crucial component of the field.[10] Years earlier, Simmons and Martin noted the importance of such questions to the role of international institutions: “Normative questions also rise to the top of the agenda once we recognize the lock-in role of institutions. If they do in fact solidify a pattern of cooperation preferred by the most powerful, we should question the ethical status of institutions, turning our attention to equity, as well as efficiency questions.”[11]

Those working in the British tradition of IPE have been more sensitive to these points, particularly scholars like Susan Strange. Concerns about equity were central to Strange’s research, particularly her work to understand the interaction between states and markets.[12] The question of who benefits from state-market interaction and how the politics that animates markets also structures power is one with critical importance to Middle East political economy. Fligstein’s work in fiscal sociology also reflects this concern about rules governing markets and power, which promise to bring depth to IPE analyses of the Middle East. For example, in his work on the architecture of markets, Fligstein advises us to “think systematically about how government capacity and the relative power of government officials, capitalists, and workers figure into the constructions of new market rules to define the forms of economic activity that exist in a given society.”[13] Fligstein and Strange’s concerns also extend to thinking about the normative assumptions of legitimacy and stability underlying aid strategies by international and regional actors since the uprisings. Who manages, governs, and directs forms of assistance given to states in the region? What does the orientation of aid programs tell us about the preferences of actors? How is aid negotiated between international actors and organizations? Is aid reinforcing or disrupting elite coalitions? How should we think about the authority of non-state actors and their influence in transitioning states?

Scholars of Middle East political economy in many respects have already attuned us to such questions and concerns. Insightful work by Owen and Pamuk, Waterbury, Cammett, Mitchell, Bellin, Soliman, Chaudhry, Vitalis, Brand, and Moore, among others have illuminated the impact of globalization, colonialism, and great power politics on the region’s domestic economies and its citizens.[14] If the trajectory of mainstream IPE has been to favor studying those steering the helm of the global economy, research by these scholars has given us a better understanding of those on its receiving end. IPE scholars can also learn much from the work of scholars whose methods of inquiry may not mirror our own discipline, but whose research gives us a rich view of important dimensions of Middle East political economy not easily quantifiable such as the role of remittances, the functions of the informal economy, and rents in society. Elyachar’s detailed ethnographic work in informal neighborhoods in Egypt, for example, challenges what she calls “the secular manifest destiny of the invisible hand,” which animates programs promoted by institutions like the World Bank and NGOs.[15] Beyond illuminating how market experiments have functioned in Cairo, her work also challenges IPE scholars to question power structures very often taken for granted.

IPE scholars also have much to gain by incorporating historical sociology into their analytical frameworks and engaging earlier histories of the modern Middle East for insights into the region’s present political economy. Many scholars have remarked that globalization is not a new phenomenon in the Middle East, nor certainly are protests and rebellion. Research on the tobacco rebellion in Iran, the Egyptian revolution of 1919, and other moments of protest may yield useful insights from regional scholars on the interaction between the domestic and the international at such moments and the shifting terrain of economic power. Grounding our focus in history also underscores the familiarity of present changes in Middle East political economy and parallels with other regions emerging from colonial and imperial economic arrangements. There is enormous potential for IPE and Middle East scholars to broaden our exploration of the factors shaping the political economies of the Arab uprising through a closer examination of domestic and international elite interests, capital, and labor elsewhere.

Understanding developments in the Middle East over the last five years is an important intellectual challenge for both the field of IPE and Middle East studies and invites more collaboration and creative approaches to understand the forces shaping the region’s political economy and the possibilities for structural change. Calls for methodological pluralism are often evoked in political science yet seem to gain little traction. The historic upheavals in the region provide an opportunity to change that trend and hopefully enrich the study of the field as well.

Erin A. Snider is an assistant professor at the Bush School of Government and Public Service at Texas A&M University.



Bellin, Eva. Stalled Democracy: Capital, Labor, and the Paradox of State Sponsored Development. Ithaca: Cornell University Press, 2002.

Brand, Laurie. Jordan’s Inter-Arab Relations: The Political Economy of Alliance Making. Columbia: Columbia University Press, 1995.

Cammett, Melani. Globalization and Business Politics in Arab North Africa. Cambridge: Cambridge University Press, 2010.

Chaudhry, Kiren Aziz. The Price of Wealth : Economies and Institutions in the Middle East. Cornell Studies in Political Economy. Ithaca: Cornell University Press, 1997.

Cohen, Benjamin J. “Are IPE Journals Becoming Boring?”. International Studies Quarterly 54 (2010): 887-91.

Elyachar, Julia. Markets of Dispossession: NGOs, Economic Development, and the State in Cairo. Durham: Duke University Press, 2005.

Fligstein, Neil. The Architecture of Markets. Princeton: Princeton University Press, 2001.

Gourevitch, Peter A. “The Second Image Reversed.” International Organization 32, no. 4 (1978): 882-912.

Halliday, Fred. The Middle East in International Relations. Cambridge: CUP, 2005.

Keohane, Robert O. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton: Princeton University Press, 1984.

———. “The Old IPE and the New.” Review of International Political Economy 16, no. 1 (February 2009): 34-46.

Krasner, Stephen D. “State Power and the Structure of International Trade.” World Politics 28, no. 3 (1976): 317-47.

Lake, David A. “Legitimating Power: The Domestic Politics of U.S. International Heirarchy.” International Security 38, no. 2 (Fall 2013): 74-111.

Maliniak, Daniel, and Michael J. Tierney. “The American School of IPE.” Review of International Political Economy 16, no. 1 (February 2009): 6-33.

McNamara, Kathleen R. “Of Intellectual Monocultures and the Study of IPE.” Review of International Political Economy 16, no. 1 (February 2009): 72-84.

Milner, Helen V. Interests, Institutions, and Information. Princeton: Princeton University Press, 1997.

Mitchell, Timothy. Rule of Experts : Egypt, Techno-Politics, Modernity. Berkeley: University of California Press, 2002.

Moore, Pete W. Doing Business in the Middle East: Politics and Economic Crisis in Jordan and Kuwait. Cambridge: Cambridge University Press, 2009.

Owen, Roger, and Sevket Pamuk. A History of Middle East Economies in the Twentieth Century. London: I.B. Tauris, 2015.

Rodrik, Dani. “Has Globalization Gone Too Far.” Washington: Institute for International Economics, 1997.

Simmons, Beth, and Lisa Martin. “Theories and Empirical Studies of International Institutions.” International Organization 52, no. 4 (1998): 729-57.

Soliman, Samer The Autumn of Dictatorship: Fiscal Crisis and Political Change in Egypt under Mubarak. Stanford: Stanford University Press, 2011.

Strange, Susan. The Retreat of the State : The Diffusion of Power in the World Economy. Cambridge Studies in International Relations. New York: Cambridge University Press, 1996.

Vitalis, Robert. When Capitalists Collide : Business Conflict and the End of Empire in Egypt. Berkeley: University of California Press, 1995.



[1] Fred Halliday, The Middle East in International Relations (Cambridge: CUP, 2005).

[2] Daniel Maliniak and Michael J. Tierney, “The American School of IPE,” Review of International Political Economy 16, no. 1 (2009): 22-23. Hannes Baumann also notes the absence of the Middle East from several IPE textbooks. For more, see: . I thank Morten Valbjorn for sharing this blog post with me.

[3] Ibid

[4] Ibid

[5] Benjamin J. Cohen, “Are IPE Journals Becoming Boring?,” International Studies Quarterly 54 (2010).

[6] Ibid.

[7] Kathleen R. McNamara, “Of Intellectual Monocultures and the Study of IPE,” Review of International Political Economy 16, no. 1 (2009).

[8] Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press, 1984); Peter A. Gourevitch, “The Second Image Reversed,” International Organization 32, no. 4 (1978). Helen V. Milner, Interests, Institutions, and Information (Princeton: Princeton University Press, 1997). David A. Lake, “Legitimating Power: The Domestic Politics of U.S. International Heirarchy,” International Security 38, no. 2 (2013); Stephen D. Krasner, “State Power and the Structure of International Trade,” World Politics 28, no. 3 (1976).

[9] Dani Rodrik, “Has Globalization Gone Too Far,” (Washington: Institute for International Economics, 1997).

[10] Robert O. Keohane, “The Old IPE and the New,” Review of International Political Economy 16, no. 1 (2009): 43.

[11] Beth Simmons and Lisa Martin, “Theories and Empirical Studies of International Institutions,” International Organization 52, no. 4 (1998). 746

[12] Susan Strange, The Retreat of the State : The Diffusion of Power in the World Economy, Cambridge Studies in International Relations (New York: Cambridge University Press, 1996).

[13] Neil Fligstein, The Architecture of Markets (Princeton: Princeton University Press, 2001).

[14] Roger Owen and Sevket Pamuk, A History of Middle East Economies in the Twentieth Century (London: I.B. Tauris, 2015). Kiren Aziz Chaudhry, The Price of Wealth : Economies and Institutions in the Middle East, Cornell Studies in Political Economy (Ithaca: Cornell University Press, 1997). Timothy Mitchell, Rule of Experts : Egypt, Techno-Politics, Modernity (Berkeley: University of California Press, 2002); Eva Bellin, Stalled Democracy: Capital, Labor, and the Paradox of State Sponsored Development (Ithaca: Cornell University Press, 2002). Robert Vitalis, When Capitalists Collide : Business Conflict and the End of Empire in Egypt (Berkeley: University of California Press, 1995); Melani Cammett, Globalization and Business Politics in Arab North Africa (Cambridge: Cambridge University Press, 2010); Samer Soliman, The Autumn of Dictatorship: Fiscal Crisis and Political Change in Egypt under Mubarak (Stanford: Stanford University Press, 2011).

[15] Julia Elyachar, Markets of Dispossession: NGOs, Economic Development, and the State in Cairo (Durham: Duke University Press, 2005); Laurie Brand, Jordan’s Inter-Arab Relations: The Political Economy of Alliance Making (Columbia: Columbia University Press, 1995); Pete W. Moore, Doing Business in the Middle East: Politics and Economic Crisis in Jordan and Kuwait (Cambridge: Cambridge University Press, 2009).

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