A New Social Contract for MENA Countries: Experiences from Development and Social Policies (Academic Panel)

More than five years have passed since popular uprisings shook almost all countries in the Middle East and North Africa (MENA) in the so-called ‘Arab spring’ and led to regime changes in several of them. Millions of demonstrators called for “Bread! Freedom! Social Justice!” as they voiced their discontent at the lack of democracy, economic opportunities and social security. One of the key themes of the EADI Nordic Conference is the need for new social compacts in high and lower income countries. This is particularly apparent in the MENA region. For decades, governments had distributed material and immaterial benefits within society in order to compensate key social groups for the lack of political freedom and participation. But this ‘old social contract’ does not work anymore because of population growth, public revenue decreases and the deterioration in the efficiency and social justice impacts of public spending.

All countries in the region suffer from the deterioration of the legitimacy of the state as such. None of them will enjoy long-term stability unless they succeed in redefining state-society relations. Better governance is, of course, one of the core issues that a new social contract would need to establish. Another issue is, however, deeply inter-linked with the above is how social justice and social security can be improved. A major question in this context is, of course, how energy, food and other commodity subsidies can be replaced by direct social transfers, which are superior in terms of both efficiency and distribution criteria. But many other questions must also be answered such as what role can effective forms of citizenship and in particular social citizenship play in the construction of a more just social order in the MENA region; and what alternative forms of social welfare organisation and action may bear the seeds of socially transformative change in the region.

Ahmed Badawi, Senior Research Fellow, Freie Universität Berlin


Paper 1
“The social contract as a tool of analysis”, Markus Loewe, DIE

For many observers of the Middle East and North Africa (MENA) region, the popular uprisings in 2011 came as a surprise. Economic growth rates were substantial, indicators of income poverty and other dimensions of multidimensional poverty were falling and, at least in Egypt and Tunisia, income inequality was improving. The explanation might be that MENA countries were rejecting the social contract which was established after their independence in the 1950s and 1960s. This tacit agreement implied the extension of generous social and economic benefits to citizens (mostly commodity subsidies and jobs) in return for submission to unaccountable government and restricted political participation. These benefits were financed by rent income from oil and foreign aid. These were, however, falling over time and had to be increasingly shared by growing populations. As a result, long before 2011, people in the region realised that the state cared less and less for them, while continuing to limit their rights and freedoms.
What might a new social contract look like, and how can the different MENA countries achieve one? The purpose of this paper is to raise these questions from a conceptual and analytical point of view. First, the paper discusses how the ‘social contract’ term could be defined, both generally and with reference to the MENA region. The added value the concept can bring to the analysis of political systems and development in the MENA region is also discussed. The paper elaborates on the characteristics of the old social contracts in MENA countries and the reasons behind their failure. The paper concludes with a discussion of the kind of new social contracts that could bring long-term stability and development to MENA countries, and the preconditions for the formation of a new social contract in those countries.

Paper 2
“Income inequality and perceptions of social conflict in Turkey”, Sevinc Rende, Isik University

Understanding the relationship between actual and perceived income inequality is not an easy task. On the one hand, income inequality may create aspirational effects, thereby reducing the negativity of the perception of class differences. On the other hand, the gap between low and high income groups may exacerbate social tensions, increasing the risk of conflict among groups of people in the society. Furthermore, the ways in which people form their opinions about social cohesion in their society may be affected more by their perception of inequality than by its real level.
In this paper I focus on how the Turkish population assesses social tension between the rich and poor in relation to income inequality using the two waves of European Quality Life Surveys. In doing so, I consider three questions: What is the relationship between actual and perceived income inequality in Turkey? More specifically, do people focus on local income distribution when they form their opinions on the differences between economic classes? Finally, how has the relationship between assessments of tension between the rich and the poor and actual income inequality evolved?
To answer these questions, I compare the statistical measures of income inequality to the perceived level of social tension between the rich and the poor in Turkey. I explore the relationship between opinions on the conflict between the affluent and poor classes and income inequality, represented by three separate measures, namely the GINI and Theil coefficients as well as the placement of household income over the quintiles. A notable finding of this study is that over time, income inequality has lost its statistical power to explain the perception of income-based antagonism. Instead, the findings suggest that economic insecurity has become more prominent in influencing people’s perceptions of conflict between the upper and lower economic classes.
Drawing on the preliminary results, this study highlights the possibility that perception of social conflicts may depend on a broader base of factors other than income inequality alone, at least in the case of Turkey. People may not be able to deduce the actual distribution of income, especially if spatial polarization exists, and instead may rely on other economic security indicators as they form opinions on social tension. The findings suggest that statistical indices of income inequality may not always capture the perception of social tension and therefore monitoring indicators on economic security and social mobility may serve as a reliable alternative.

Paper 3
“The State of Arab Statehood: Reflections on Failure, Resilience and Collapse”, Wolfgang Mühlberger, FIIA

The underlying structural origin of the Arab uprisings has been gradual yet thorough state failure. In the sense that the institutions of a Weberian framed state failed to deliver on their most basic tenets, such as wealth redistribution, functional political representation and the provision of security for its citizens, either cumulatively or with a significant occurrence in one of these categories. From this angle, the objective of the revolutions was not limited to regime change but more fundamentally challenged the legitimacy of state power and questioned the quality of the state-society relationship. This paper proposes to analyse tentative change of the political architecture in countries of the Arab Spring through the theoretical lens of statehood in order to derive conclusions on the characteristics and vulnerability of Arab states, corrosion levels of institutional capacity and legitimacy and possible trajectories of change in the early 21st century.

The paper develops the idea that state failure triggered the upheaval known as the Arab Spring. The increasing number of Arab states on the brink of collapse and the rising phenomenon of fragmented central state authority invite to revisit – and relaunch – the ‘Arab state debate’. To this end the author analysis Arab state structures to better understand their intrinsic characteristics, the dominant type of state-society relationships, and the potential of the Arab state system for reform. Authoritarian regimes thrive on patrimonial power structures, criminalising instead of modernising states in the worst case. Widely used informal strategies, such as co-optation, additionally hollow out formal state structures and undermine their legitimacy. These marginal states are ripe for contestation, and risk tilting from failure into collapse.

Paper 4
“Elements of the new societal contract for conflict affected countries in al-Mashreq: the temporal dimension and perspectives of retribution”, Bernhard Trautner, DIE

The process of forging a new societal contract is obviously informed by both – past and the future: the previous, empirical societal arrangement and the normative ‘social contract’. More importantly, the gap between the two, the failure of the existing arrangement to deliver on the norm, being the main reason for the rupture, any new ‘ideal’ SC will need to consider that collective experience. In the Arab countries of the East/al-mashreq, the normative, i.e. secular foundations of the state and egalitarian principles of society have successively collided with the clientilistic reality of the societal and political arrangements. The latter have been analyzed in extent with regard to the ‘old’ social contract in the Arab World and beyond under the notion of ‘(neo-)patrimonialism. In addition, in fragile states and situations where the previous societal arrangement has disintegrated eruptively through violent conflict it would seem unlikely that a ‘clean slate’ / Zero Hour / ‘Day After’ exists for looking into the future design of state and society. Rather, from previous stages of disintegration, conflict, and societal upheaval, massive demands for retribution, revenge and punishment risk to prevail over the ‘objective’ need to create a more favorite situation not only for society, but also for specific groups and even individuals. In particular, if a new social contract is to be based on people’s expectations and demands, it seems important to deal with the strong psychological disposition to punish – to punish either other groups of society, or alternatively ‘the government’ or even ‘the political system’ for the real or only for perceived injustices as an individual or as a group.

Dr. Mark Furness, Senior Researcher, German Development Institute