Crony Capitalism in the Middle East - Business and Politics from Liberalization to the Arab Spring - Economic Research Forum (ERF)

Edited by Ishac DiwanAdeel Malik, and Izak Atiyas

  • Uses rich empirical analysis unparalleled in the literature on Middle Eastern economies
  • Offers robust comparisons on the form and function of cronyism, including case studies from across the Middle East
  • Feeds into global discussions about the Middle East and on the balance between corporate power and political power more broadly


The popular uprisings in 2011 that overthrew Arab dictators were also a rebuke to crony capitalism, diverted against both rulers and their allied businessmen who monopolize all economic opportunities. While the Middle East has witnessed a growing nexus between business and politics in the wake of liberalization, little is discussed about the nature of business cronies, the sectors in which they operate, the mechanisms used to favour them, and the possible impact of such crony relations on the region’s development. Combining inputs from leading scholars in the field, Crony Capitalism in the Middle East: Business and Politics from Liberalization to the Arab Spring presents a wealth of empirical evidence on the form and function of this aspect of the region.

Crony Capitalism in the Middle East is unique in both its empirical focus and comparative scale. Analysis in individual chapters is empirically grounded and based on fine-grained data on the business activities of politically connected actors furnishing, for the first time, information on the presence, numerical strength, and activities of politically connected entrepreneurs. It also substantially enhances our understanding of the mechanisms used to privilege connected businesses, and their possible impact on undermining the growth of firms in the region. It offers a major advance on our prior knowledge of Middle Eastern political economy, and constitutes a distinct contribution to the global literature on crony capitalism and the politics of development. The book will be an essential resource for students, researchers, and policymakers alike.

Table of Contents

  • Introduction: Crony Capitalism in the Middle East: What Do We Know and Why Does it Matter?, Adeel Malik, Izak Atiyas, and Ishac Diwan
  • 1: Is There an Arab Variety of Capitalism?, Steffen Hertog

Part I: Impact of cronyism on growth

  • 2: Pyramid Capitalism: Evidence from Egypt, Ishac Diwan, Philip Keefer, and Marc Schiffbauer
  • 3: Anatolian Tigers and the Emergence of the Devout Bourgeoisie in the Turkish Manufacturing Industry, Izak Atiyas, Ozan Bakis, and Esra Gurakar
  • 4: Do Political Connections Reduce Job Creation? Evidence from Lebanon, Ishac Diwan and Jamal Ibrahim Haidar
  • 5: Moroccan Cronyism: Facts, Mechanisms and Impact, Mohamed Said Saadi

Part II: Mechanisms of privilege

  • 6: How Do Dictators Get Rich? State Capture in Ben Ali’s Tunisia, Leila Baghdadi, Hassan Arouri, and Bob Rijkers
  • 7: The Politics of Trade Protection in North Africa, Adeel Malik and Ferdinand Eibl
  • 8: Political Connections and Public Procurement in Turkey, Esra Gurakar and Tuba Bircan
  • 9: Boundaries of Protectionism: Ethnic Politics and Crony Capitalism in Jordan, Steve Monroe

Part III: Financial markets and cronyism

  • 10: Elections and Economic Cycles: What Can We Learn from the Recent Turkish Experience?, Cagatay Birkan and Orkun Saka
  • 11: Crony Interlockers and the Centrality of Banks in Morocco, Mohamed Oubenal
  • 12: I’ve got the Power: Mapping Connections between Lebanon’s Banking Sector and the Ruling Class., Jad Chaaban
  • 13: State and Capital Markets in the Middle East, Ali Coskun, Serhat Cevikel, and Vedat Akgiray
  • 14: Iran’s Commanding Heights: Conglomerate Ownership in the Islamic Republic, Kevan Harris


  • 15: The Future of the Private Sector in an Age of Uncertainty, Ishac Diwan

Crony Capitalism in the Middle East – Business and Politics from Liberalization to the Arab Spring

Research Fellows

Ishac Diwan

Chair Arab World, Paris Sciences et Lettres, visiting researcher at the Paris School of Economics


Adeel Malik

Globe Fellow in the Economies of Muslim Societies at the Oxford Centre for Islamic Studies and a University Research Lecturer in Development Economics at the University of Oxford

Research Fellows

Izak Atiyas

Associate Professor of Economics, Faculty of Arts and Sciences, Sabanci University



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