A Political Economy of the Middle East
Egypt is the anchor case throughout; the standard textbook on regional state-business relations.
Summary
Richards and Waterbury wrote the standard textbook on Middle Eastern political economy, covering the region from the mid-twentieth century through the period of each edition. It treats economics and politics together, on the argument that neither can be understood separately in states where the government controls the principal revenue source.
The organising themes include: the rentier state, in which a government funded by oil revenue or by strategic aid does not need to tax its population and therefore does not need to bargain with it, which shapes both fiscal policy and political representation; the demographic transition and the resulting youth cohorts entering labour markets that cannot absorb them; the failure of import-substituting industrialisation and the difficult politics of liberalisation; agrarian reform and its consequences; the role of the military in economic life; and labour migration and remittance flows within the region.
The authors work through country cases including Egypt, Turkey, Iran, Iraq, Saudi Arabia, Algeria, Tunisia, Morocco and Israel, comparing the different paths taken from broadly similar starting positions.
The book is a textbook and reads like one, with substantial statistical material. Later editions extended coverage. The reference has not verified which edition's specific data a reader will encounter, and the material inevitably lags events, particularly the period after 2011 which changed several of the country cases fundamentally. The analytical framework, particularly the rentier state argument and the demographic material, remains the standard starting point.
Key takeaways 7
- A government funded by oil revenue or strategic aid does not need to tax its population and therefore faces no pressure to bargain with it politically.
- Rentier revenue allows states to purchase acquiescence through employment and subsidy, which builds a fiscal structure that becomes impossible to reverse when revenue falls.
- Demographic growth produced youth cohorts far larger than the labour markets could absorb, which is a structural condition rather than a policy failure.
- Import-substituting industrialisation built inefficient state enterprises whose employment made liberalisation politically impossible.
- Militaries in several countries in the region hold substantial commercial assets, which makes them economic actors with an interest in the existing structure.
- Labour migration and remittances redistribute oil revenue across the region and connect the economies of producers and non-producers.
- Similar starting conditions produced different outcomes across the region, which shows the paths were determined by political choices rather than by resources alone.
Who should read it
Investors and analysts with Middle Eastern exposure who want the standard framework on rentier states, demography and the politics of economic reform.
Where it sits in the reference 4
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