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Bridging the Gap

An Arab-European Dialogue on the Basics of Liberalism

Editor Dr. Ronald Meinardus

Bridging the Gap

Title of the Book Bridging the Gap An Arab-European Dialogue on the Basics of Liberalism

Editor Dr. Ronald Meinardus Editorial Assistant Dirk Kunze

Publisher Al-Mahrosa for Publishing, Press Services, and Information Block 7399, Street 28 branching from Street 9, Mukkattam Cairo, Egypt Tel/Fax: 02-25075917 Chairman: Farid Zahran

Serial Number: ISBN:

This book was published by the European Liberal Forum asbl with the support of Friedrich Naumann Foundation for Liberty and Forum for Greece. Funded by the European Parliament. The European Parliament is not responsible for the content of the publication. The views expressed in this publication are those of the authors alone. They do not necessarily reflect the views of the European Liberal Forum asbl, Friedrich Naumann Foundation for Liberty or Forum for Greece.

Bridging the Gap

European Liberal Forum (ELF)

Founded in the fall of 2007, the European Liberal Forum is the non-profit European political foundation of the liberal family. ELF brings together liberal think tanks, political foundations and institutes from around Europe to observe, analyse and contribute to the debate on European public policy issues and the process of European integration, through education, training, research and the promotion of active citizenship within the EU.

Forum for Greece

The Forum for Greece is a non-profit organization with liberal, democratic and reformist ideas, wishing to contribute to open and democratic developments in the European Union. The Forum for Greece has been registered under the Greek Law as a non for profit organization with headquarters in Athens and a branch in Thessaloniki, at North Greece. The Forum for Greece is aiming to work in the liberal-thinking sector in Greece helping to form a critical mass of citizens aiming at a liberal reform of Greek society.

Friedrich Naumann Foundation for Liberty (FNF)

Established in 1958 by the first president of the Federal Republic of Germany, Theodor Heuss, and a group of committed Liberals is an independent, non-profit, non-governmental organization that is committed to promoting liberal policy and politics in Germany, Europe and worldwide. Based in Potsdam, Germany, the Foundation has seven offices in Germany and more than 40 projects worldwide through which it promotes its core concepts such as the protection of human rights, civil society, market economy, free trade and rule of law. Over the last 51 years the activities of the Foundation have expanded beyond their original civic educational task in the young Federal Republic of Germany. A scholarship program, a think tank (the Liberal Institute), a press and media department was established and the engagement in international politics became an important part of the Foundations assignments.

Bridging the Gap

Bridging the Gap

Table of Content


Ronald Meinardus Giulio Ercolessi Hala Mostafa

Introduction Preface: The Basics of Liberalism Freedom, human rights and the individual in Arab and Western experiences Rule of law, individual rights and the free market in the liberal tradition: The case of Greece Liberalism and conspiracy theories: Greece and Egypt Arab renaissance and economic freedom Economic freedom and institutional change: European experiences and Arab realities The role of religion in Arab politics and society The role of religion in society and politics in Europe, or: three myths of secularity in Europe Blueprints for the future of liberalism in the Arab world A liberal program for the future: Guidelines for Arab and European countries

7 11 15

Aristides N. Hatzis


Asteris Huliaras


Yusuf Mansur Andrzej Kondratowicz

57 75

Mohammed Tamaldou


Sven Speer


Alexandra Thein


Mounir Rached


Bridging the Gap

Bridging the Gap

Dr. Ronald Meinardus
Arabs and Europeans are neighbors they always have been and always will be. In terms of geography, Arabs and Europeans are very close. In terms of politics and culture, however, the distance at times seems vast. In Europe and the European Union there exists a consensus that good neighborly relations are of existential importance. In exemplary fashion, the EU has redefined its relations with the Eastern neighborhood after the successful peoples revolutions in that part of the world. Now, after the historic changes in the Arab world, it is high time for Europe to redefine in earnest its relationship with the Southern neighborhood. For two days in May 2013, Cairo became the center of liberal debate and attention, as politicians and academics from Algeria, Belgium, Egypt, Germany, Greece, Italy, Jordan, Lebanon, Libya, Morocco, the Netherlands, Palestine, Poland, Tunisia and Syria assembled for the first Arab-European dialogue forum on the basics of liberalism. We assumed there would be major ideological and programmatic divergence between the delegates and we therefore gave the conference the title, Bridging the Gap. The political and cultural environments are very different in these parts of the world. This has a big effect also on the role of liberalism in respective societies. In the Arab world, sadly, the perception prevails with many that liberal principles stand against local mores and traditions. Some groups, be it out of ignorance or out of spite, continue to propagate that liberalism and religious freedom are not compatible. Yes, they hatefully spread the lie that the great idea of personal freedom is against Islam, thereby

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willingly pushing all Muslim liberals into the world of the nonbeliever. In this regard, the situation in Europe is very different: here, liberal principles have become the mainstream and have found their way into constitutions and legislation. All major political forces, also socialists, conservatives and democratic religious parties, have adopted basic liberal values. In the following pages we gather the main presentations of the Cairo conference as a reference point for future debates. In the sessions, differences and differentiations concerning the central issue of the role of religion in society became apparent. Little separated the Arabs and Europeans in regards to the basic liberal principles of the freedom of the individual, equality in opportunity for all men and women, and the rule of law. Importantly, these liberal principles have also been the drivers of the peoples uprisings in the Arab world. Some three years later, much of the enthusiasm has vanished also among Arab liberals who find themselves politically marginalized. How to get out of this marginalization and become a key player is the most important challenge of the liberal movement in the Arab world. It is essential to remember a point highlighted at the conference by speakers from both sides that elections alone are no guarantee for a democracy that protects the rights of all its citizens. Recent history is awash with examples of so-called illiberal democracies. These are political regimes that come to power in democratic elections and then do little if anything at all to protect the freedom of all citizens and guarantee equality of opportunity in the fields of politics, society and economy. Neither this conference nor the book you are holding in your hands would have been possible without the generous support of the European Liberal Forum (ELF), an European institute dedicated to the promotion of dialogue and cooperation of liberals in Europe. The Regional Office of the Friedrich Naumann

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Foundation for Liberty in the Middle East and North Africa (MENA) is gratified and thrilled to cooperate with our European partners in an endeavor to strengthen the understanding between liberals on both sides of the Mediterranean.


Bridging the Gap

Bridging the Gap


Preface: The Basics of Liberalism Giulio Ercolessi

All political speech is not only inherently difficult to translate but also per se polysemic: it needs elucidation even within similar political and cultural milieus. What are we talking about when we discuss the basics of liberalism? There cannot be a prescriptive definition, but here is a possible proposal. Liberalism is a theory of the ends and a theory of the means: maximizing individual freedom and self-determination, mainly through the instrument of the legal limitation of all powers. If we accept this definition, liberalism is a perpetual work in progress. First, because since the beginning it was the outcome of a fight, ever more comprehensive and ever more consistent, against authoritarian traditions and beliefs, and because of the natural inclination of every political, traditional, bureaucratic, social and economical power to confront and overrun its imposed limits. Second, because it was by no means a steady triumphal march. The preconditions for the development of liberalism were first provided by the birth of the modern idea of the individual in the late Middle Ages, especially in Central and Northern Italy and in the Ancient Low Countries, and much later by the hard-won achievement of a limited freedom of conscience, first in restricted areas of Europe and in the religious domain alone. Further later, individual freedom expanded to other domains, through hard and often bloody confrontations, step by step leading to political freedom, freedom of the markets, democracy, the system of constitutional checks and balances, the independence of the judiciary, equal rights and equal social dignity and protection from discrimination on the basis of religion, political opinions, gender, race, nationality, ethnic origins, age, disability, sexual orientation, etc.


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Not even within what we call today the Western civilization was it a secure process. On the contrary, we learned from our mistakes: freedom of conscience arose from persecutions and religious wars; freedom of the markets from limitations to development during the Ancien Rgime and even later. And European integration and the EU were finally established as a consequence of two world wars (mostly fought among Europeans and among Westerners). After two consecutive attempted suicides, the main commitment of Western Europeans consisted of a will of change, not of continuity: Never again, nie wieder, jamais plus a, mai pi, nunca ms. Third, liberalism was not the common result of an equal progression of identical historical developments in all the Western nations. It was a basically Dutch, English, American and French product, that proved capable of partially or entirely successful importations, transplants, imitations, adaptations, improvements, to ever larger parts of the world. This historical expansion of liberalism beyond its original boundaries can be seen today as a promising precedent for regions where new totalitarian or fundamentalist threats seem to be on the rise. Past successes easily led to the idea that the values and principles of what we now call Western civilization are and must be universally valid. Dilemmas are obvious. In some countries, former colonial powers appear to impose their values and principles on the rest of the world. This was not the concern of the eminent scholars and representatives of liberal and democratic Arab organizations that took part in the Cairo conference whose proceedings are gathered in this volume. We are no longer able to impose anything on anybody. But it is our duty to bring to others what we think are the most successful parts of our political civilization, as tools in bridging the gap. The precious and passionate work of the Friedrich Naumann Stiftung in Cairo should be an example for all of us.

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We must be conscious that history carries a weight, but does not inflict on us an inescapable and inexorable destiny, resulting in ascribed identities of peoples or civilizations that are given once and for all. And when we discuss the anthropological individualism of the West, we have to remind ourselves that it is not the Arab world, nor the Muslim world, nor Asia, that represent exceptions: the exception is the West itself, and this was not given from the beginning; it was the product of history, and history is also made of opportunities, possibilities, choices. Religious beliefs do have the capacity to influence and condition popular behaviour and mentalities more than rationalistic or philosophical thinking. Yet one must remember that Christianity, and, most of all, Catholicism, with its hierarchical and authoritarian structure, had been the strongest enemy of freedom of conscience in the West, until it was forced to come to terms with pluralism, liberalism, with the Enlightenment, and the modern scientific thinking with new exegetic tools provided by modern linguistics and the social sciences, that were initially embraced only by enlightened minorities. Traditional views were indeed strongly challenged also from within Christianity, but in principle freedom of conscience was anathema to the official teaching of the Catholic Church well into the second half of the 20th century, actually until the Second Vatican Council. Elsewhere, a solid wall of separation (Thomas Jefferson, 1802) between political power and religious faith had already proved to be the best recipe to grant at the same time full religious freedom to believers and freedom from impositions to religious minorities and non-believers. We liberals always held that all powers, even the democratic power of the majority, must be limited whenever they try to coerce individual conscience, individual freedom and self-determination.


Bridging the Gap

At the very dawn of Western liberalism, John Locke set a principle: Every man has a property in his own person (Second Treatise of Government, 1690). Today, this sentence could seem related to the most advanced present frontier of the ethical and political dilemmas of individual self-determination. Locke obviously could not think of that in 1690. He provided a consistent framework to explain the historical developments arising from almost a century of English political turmoil. But the principles set at that time produced the basic political guidelines that we think proved most fruitful in the three following centuries - and beyond.

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Freedom, human rights and the individual in Arab and Western experiences
Hala Mostafa
Human rights are defined as the package of rights and freedoms to which everyone is inherently entitled, simply because she or he is a human being. They encompass and address fundamental needs, demands and rights that must be indiscriminately provided to all human beings, because they touch the very nature of the individual, such as the right of life, freedom, or equality, or any other right essential to human nature. In other words, there exist a number of natural rights enjoyed by man, and they are inherent to human nature. Such rights exist even if they have not been recognized, or moreover, even if they have been infringed upon by religious or political authority. The United Nations has defined human rights as legal and universal guarantees to protect both the individual and the group from the actions of governments that may jeopardize fundamental freedoms and human dignity. The Universal Declaration of Human Rights, adopted by the United Nations, binds governments with certain obligations, while banning practices that infringe upon human rights. That is, the international organization views human rights as inherent to the nature of mankind. On the other hand, human rights are understood as an expression of the accumulation of philosophical schools, doctrines, and religions throughout history. Human rights represent universal human values that are extended to the human being wherever he or she may exist. Laws and legislation in most countries protect human rights, and yet prevailing regimes more often than not fail to comply with the principles such laws embody because they are incapable of providing guarantees of them, or because, at the outset, they are against them for cultural or political reasons.


Bridging the Gap

The Universal Declaration of Human Rights adopted in 1948 addresses four fundamental dimensions of human rights: first, the individual and personal rights; second, the relation between the individual and society or the state; third, public freedoms and fundamental rights; and fourth, social and economic rights. The Universal Declaration has been signed by most states and, moreover, has inspired in many national constitutions provisions governing citizens rights. However, the degree of compliance varies among states and its legal mandate is still subject of debate, particularly in non-Western states and non-democratic states.

Liberalism and human rights

Principles of human rights have evolved historically and ideologically in the light of liberal philosophy, which fosters the values of freedom and individualism simultaneously, since individualism implies the protection of ones physical and abstract rights and freedoms, and embraces freedoms of thought, movement, creativity, and other freedoms important to a social context. Liberalism views the individual as the main concern of human rights, the core of the philosophy of life, and the source of all values that align thought and behavior altogether. Man steps into life an individual, free, enjoying rights to live, to think, to believe, and to exercise conscience; only then can he have the right to choose. Freedom and choice are, subsequently, the cornerstones of liberal philosophy. Liberalism has developed over centuries, and is believed to be the fruit of the European Renaissance, which emerged in Italy and spread all over Europe between the 14th and 19th centuries, after the religious wars of the Middle Ages. The period witnessed major human revolutions, such as the French and American revolutions, preceded by The Magna Carta of England, in the 13th century, which is considered the first human rights document to include the civic rights of individuals from different social strata, starting with nobles through the middle class, to the rights of laborers and

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women. Furthermore, it was the individuals variant contributions in the arts, painting, poetry, philosophy, and science amongst other fields of creativity that played the leading role in modeling the Renaissance and stabilizing the basic principles of freedom against despotism and the abuse of power practiced by political and religious authorities. It is widely believed that such contributions, alongside the principles of the great revolutions, laid the ground for the Universal Declaration of Human Rights to be formulated after the end of World War II. That said, liberalism as a school of thought, beyond mere individuals, played its role in curbing authoritarian power. Liberalism regarded the consent of subjects as a prerequisite for the exercise of power, and as the source of its legitimacy. Liberalism in this context builds upon the philosophy of the social contract, as formulated by founders Thomas Hobbes, John Locke, Jean Jacques Rousseau and Immanuel Kant, with its core concept that a contract exists between the ruler and the ruled, and that the contractual terms requires the individual to waive part of her or his freedoms for the state to exercise power. Yet the continuance of this contract is reliant on how the state exercises its powers in particular that it must do so in a manner that does not violate the fundamental and natural freedoms of the individual. Liberalism, as well, has evolved politically and socioeconomically; that is, it is concerned with combating poverty and supporting the growth of the middle class for example, following the industrial revolution and the Great Depression in the 1930s. At that time, the theory of Keynesianism emerged, advocating a limited role for government in support of social services programs, or the so-called welfare state. Keynesian theory was formulated to counter the economic crisis of the capital system. Eventually, democracy as a governing system became linked with liberalism, and by that, democracy has acquired further dimensions than its mere procedural aspects (i.e., elections and the rotation of power) to become principally concerned with public and individual freedoms as well as the rule of law, the separation of


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powers, and civic-oriented constitutions that guarantee equality without discrimination in a manner that crystalizes the modern concept of citizenship.

Liberalism in the Western and Arab experiences

The Western experience of liberalism cannot be considered apart from Western heritage, especially the history of the Renaissance and the evolution of liberal philosophy in Europe, and eventually the spread of the values of freedom and human rights and individualism, and the adoption of liberal values in politics and economy. Europe also stabilized the national state, which runs deeper than social gaps and is built on the basis of citizenship, equal rights and equal responsibilities, rule of law, and the supremacy of a civic constitution to frame these values and principles. Thereby, liberal values were reflected in institutions, and democracy was introduced to mirror such ideas. In other words, the axioms upon which Western experience was built became a reality, cementing a national consensus. The Arab-Islamic experience is the complete opposite of the Western one. This part of the world has known modernization far later than Europe. The Arab Renaissance started in the late-19th century, passing through the 1930s and 1940s. At that time, the concept of the national state was first introduced in Egypt (1805, after independence from the Ottoman Empire and under the rule of Mohammad Ali). Following that, communication opened up with European civilization on all aspects, such as political, cultural and religious reform, amid a revival of circles of literature, philosophy, poetry, and the arts. It is worth noting, in this regard, two main points. The first is that the Arab-Islamic renaissance, with the spread of principles of freedom and liberty, is very much the outcome of individual contributions, which is why when that era known as the first liberal era is mentioned, certain names pop up in ones mind: such as Rifaa Al-Tahtawi, Sheikh Mohammad Abdou, Ali Abdur-

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Razik, Ahmad Lotfi As-Sayyed, Mohammad Hussein Heikal, and Qassem Amin, and more recently Naguib Mahfouz, Tawfiq Al-Hakim, and others. Dozens of such figures played a pivotal role in spreading the values of liberalism. Yet such contributions never turned into institutionalized values due to incompetent institutional practices in Arab societies and the incomplete structure of the national state let alone affecting the traditional nature of the dominant culture. Therefore, such contributions remained limited to elites, with no deep impact on the lower classes of society, particularly with the deterioration of education and the spread of illiteracy, and failure to achieve economic or societal developments. The second point is relevant to attitudes towards Western civilization. The primary contributions made towards reform emerged from a genuine desire to communicate with Western civilization, rather than stand in conflict with it. This was crucial in determining the direction of the aspired to reform. The result was a distinguished pluralist constitutional and liberal experience in the first half of the 20th century, embodied in the first liberal and civic Arab constitution in Egypt, in 1923. That constitution openly adopted human rights principles among its provisions, with a special focus on individual rights and freedoms, and guaranteed such rights and freedoms without discrimination on grounds of sex, race, color or creed.

Liberalism run aground: The 1952 Revolution

The 1952 July Revolution was a significant turning point. With the adoption of an opposing political agenda, involving a central role for the state in economy and politics, and a clear orientation towards socialism and the rule of a single political organization, Egypts first liberal experience came to an end. On the other hand, the 1952 Revolution did lead to the emergence of Arab national liberation movements and challenged the imperial and colonial powers of the time. That was reason for the political and cultural rupture with the West in general. Mass culture replaced individual culture, which concerns with the rights and freedoms of the individual. The


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move beyond the individual is embodied in the rise of Arab nationalism an ideology that not only goes beyond the individual, but also beyond national boundaries. Though Egypt returned to political and partisan plurality, and turned its back on socialism and adopted a policy of economic openness, even relinquishing key parts of the Arab nationalism doctrine, the change remained limited and curbed. The core concept of the central state and its practices did not change; which means in brief a lack of a liberal aspect in the turn towards pluralism, democracy and free economy. Furthermore, that time witnessed the rise of political Islamist groups both the so-called moderates (referring to those that were known to be non-violent), and others believed to be fanatical or extremist (known to have, or used to have, militias). In both cases, the groups of political Islam have their own ideologies and schools of thought that counter liberal thought on individual and civic rights. Such groups did engage in an open conflict with the authorities. But that conflict did not stop them from bargaining political deals. Such deals, in principle, were tailored for the authorities to allow political Islamist groups to work in the social and cultural domains, in addition to Islamic preaching, and to achieve some electoral and political gains, especially within the trade and student unions and syndicates, all in return for keeping their hands off the presidency and national rule. The regime, moreover, adopted some Islamic ideas, mirrored in the constitution by establishing Islamic Sharia as a main source of legislation (1981), or giving up important gains related to freedoms and womens rights and minorities. This was known as political Islamization. During the 1980s, it was much the same. Things changed only with the 25 January Revolution, followed by Islamists winning the presidency, and ruling.

The Arab Spring

The Arab Spring revolutions, headed by the Egyptian revolution, brought Islamist forces to the fore of the political scene.

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The Muslim Brothers were in the lead, with their fellow Islamists such as the Salafists and the Jihadists, who started to openly practice politics close behind. For the first time, Islamist groups had an opportunity to come out from the shadows of secret work and join recognized parties. That is, undoubtedly, a dramatic change in the Egyptian and Arab political map. But while Islamists may accept to engage in the democratic process in a procedural sense, adopting its known tools (especially the electoral process), the values and liberal principles of democracy are a different matter. Islamist views on civic (both private and public) liberties are far different from those upheld in liberal democratic systems. Such differences apply, as well, to the values of plurality, tolerance, equality and nondiscrimination, and attitudes towards women and minorities, among others. Also, the relationship between religion and politics or religion and the state is still matter of debate, putting in question the civil, or modern national state. The reality of such conflicting views on individual and civil freedoms was clearly illustrated in the 2012 Constitution (voted on last December). All articles and provisions pertaining to civic and individual freedoms were left open to interpretation by ruling Islamic powers, the phrasing ambiguous and hard to legally or constitutionally enforce. Freedoms were explicitly limited by provisions on the so-called protection of ethics. Examples are not limited to Article 81, which binds the enjoyment of rights and freedoms to non-conflict with the principles pertaining to state and society, without mention of what such principles are. Articles 10 and 11 stipulate that the state shall preserve the genuine character of the Egyptian family, and its ethics and moral values. Such provisions left the door open for the state or even non-state groups emerging on the pretext of protecting morals (such as groups for promotion of virtue and prevention of vice) to interfere in the private freedoms of citizens and to evaluate their behavior according to ideological standards. Similarly, Article 33 the fundamental article meant to guarantee rights of citizenship only referred to equality


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between citizens in rights and duties without discrimination. The full article from the 1971 Constitution (Article 41) had been cut, omitting the phrase that stipulates, No discrimination shall take place because of sex or race or language or religion or belief. The 2012 Constitution in general had shades of sectarianism, especially in its newly created articles. For instance, Article 2 stated that Principles of Islamic Sharia are the principle source of legislation. To interpret this, a new article was added, Article 219. With the phrase, Credible sources accepted by Sunni doctrines, and with established disagreements among Islamic schools of thoughts and jurisprudence, and their variance in extremism and moderation, the article put the legislator and the court in grave confusion. Moreover, for the first time Article 4 set a blunt political role for the institution of Al-Azhar the formal religious institution in Egypt through its board of senior scholars, stipulating that, The Senior Scholars shall be consulted in any matter pertaining to Islamic Sharia. This, practically, means that Al-Azhar would be engaged in all political conflicts and disputes, and that its distinguished moderate advocacy role would be jeopardized. Particularly that the board of senior scholars is a rotating board, and depending on its current members could be characterized by either moderation, or by extremism. Finally, considering Article 3, which stipulates that Egyptian Christians and Jews shall resort to their canon principles as their own source of legislation, versus Article 2 that stipulates that Islamic Sharia is the principle source of legislation, one finds different sources of legislation based upon different religious references, all far from the core concept of the democratic civil state that should be built upon the rule of positive law that applies to all citizens without discrimination, and upon a unified concept for citizenship. Even Turkey is different in this regard. While ruled by Islamists (the Justice and Development Party), debate over the nature of the state came to an end following the collapse of the Ottoman Empire and the establishment of the Turkish secular state in 1924. Turkeys

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1924 Constitution clearly states that Turkey is a democratic secular republic.

Failure in modernization and development

The independence of Arab states emerged in apparent contradiction with the West, due to the fight against colonialism that swept the Arab region in the 1940s and 1950s. Soon after, the political contradiction turned into a cultural one. There has always been fear of so-called neo-colonialism or Western hegemony through economic instruments and multinational companies, as well as dominance via international organizations and agencies such as the World Bank and the United Nations. Values and principles of both political and economic liberalism, including human rights charters, have always been regarded as an extension of Western hegemony particularly that of the United States and Europe. All Western-leaning forces and currents have been either marginalized or completely excluded from decision-making circles, including liberal economic and political thinking. Accordingly, a sort of harmony existed between the state and socialist, leftist and Arab nationalist currents, with the symbols of these currents allowed to participate to varying degrees, and with limits in political life. That was the situation until the end of the Cold War and the change of the international system with the victory of the Western capitalists. That change was accompanied by the pressures of cultural, political and economic globalization, which put the national state on a defensive footing, at risk of losing its central powers and classical pillars. The following decades witnessed a different form of harmony, between the state and conservative powers particularly Islamic ones despite the recurrent struggle over power. That harmony aimed at standing up against foreign pressures, such as capitalist expansion and the spread of democracy and values of freedom (also known as the Western model). The common ground with Islamists was only about propagating the slogans of cultural


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privacy. It is worth mentioning that the Egyptian states signature on international charters for human rights including womens rights, and freedoms of belief and religion has always been conditional, backed with reservations. What is also important is the states failure in implementing any modernization and development plans, which led to the deterioration of education and maintaining already high ratios of illiteracy, poverty and unemployment. Traditional society remained as was, and the social and cultural environment did not change, despite the emergence of a new generation and social strata of a more open culture. The changes occurring to the strata are a result of globalization and the spread of technology and social media, channels that the state failed to completely suppress or control. A critical result of the failure of modernization and development plans is about the surfacing of sectarianism and polarized belonging in traditional society, be it religious or tribal or in belief. Such polarization could very likely jeopardize political and social homogeneity. It could also sectarianize any electoral process, which raises questions on its integrity and compliance to established democratic norms, which should be reliant purely on free political choice. Polarization also helps explain the ongoing debates on the identity of the state and its reference points, taking the focus away from the genuine foundations of the modern civil state.

The fragility of liberal parties

Ongoing exclusion and marginalization of liberal currents by the authorities throughout the Arab experience, except for the first liberal era had an undeniable impact on the presence of liberal powers and their ability to spread the culture of freedom within the layers of a traditional society, a good environment otherwise for conservative currents and groups, especially those who combine religious slogans with political action. In this context, the re-emergence of liberal parties after the adoption of political plurality was tainted. For instance, Al-Waft

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Party the biggest and most popular liberal party in Egypt before 1952 turned into a hardline rightist party. Many of the recently founded liberal parties, in turn, failed to live up to expectations, such as the Democratic Front, the Free Egyptians, Tomorrow of the Revolution (Ghadd As-Sawra), and the Constitution Party. None have established a clear liberal agenda, even in cultural and ideological aspects, and especially regarding civic freedoms, religious freedoms, minority rights and even womens rights. None have prominent women leaders, including the National Salvation Front. The abovementioned parties avoid controversial debates, probably in fear of accusations of non-religiousness. In addition, they are minor and divided, struggling from within over their leaderships and hence failing to emerge as an influential bloc. Even worse, they all have more or less the same program. The reality of these so-called liberal parties has negatively impacted on perceptions of liberalism in general, let alone their ability to embrace the new generations within the political arena. The new generations prefer to work in non-partisan forms, as protest movements, such as Kefaya and the 6 April Movement, or the Rebel Campaign (Tamarod) that appeared lately in Egypt. It appears that the liberal parties have no potential for change in the near future, especially with their announcement that they are not going to run in the upcoming parliamentary elections, which opens the door again to radical rightist groups (including the Salafists and jihadists) to emerge as the main opposition. This is clearly happening now in Egypt and Tunisia, the pioneering states of the Arab Spring.


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Rule of law, individual rights and the free market in the liberal tradition: The case of Greece
Aristides N. Hatzis1
I am a liberal because liberalism does not compel me to think in a certain manner or seek to forcefully convince me of a certain idea with the threat that if I do not embrace it I will no longer be a liberal. Mariam Murad Ali (2010)2 There are many versions of liberalism today. There is modern liberalism with egalitarian tendencies (egalitarian liberalism; see Rawls, 1971) and there is libertarianism (Nozick, 1974; Narveson, 1988), there are liberal conservatives who have difficulty in accepting a libertarian version of personal freedom, and social democrats attracted to liberalism without being able to digest easily economic freedom (Conway, 1995, Ashford and Davies, 1991). From the center right to the center left people are

I wish to thank Friedrich Naumann Foundation for Liberty (FNF) and particularly Dr. Wolf-Dieter Zumpfort, Hans H. Stein, Dr. Ronald Meinardus and Markus Kaiser for the kind invitations to present my ideas at FNF events in Athens and Cairo, as well as Yulie Foka-Kavalieraki and Dimitris Katsoudas for comments to both preliminary and final texts. I dedicate this paper to our Egyptian friends, Heba Mahmoud and Islam Atef. Comments are welcome: Excerpt from the award-winning essay written by Egyptian student Mariam Murad Ali, He Who Differs From Me is Not Against Me, published in Meinardus and Nagui (2010), p. 115.


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attracted to liberalism for different and sometimes contradictory reasons (Kelly, 2005). At the same time, liberal political thinking is still under development. Almost every month something interesting and very often original (Huemer, 2013) is published from liberal intellectuals and scholars, including debates about the fundamentals of liberal political philosophy (Tomasi, 2012) or intellectual histories (Powell, 2000; Doherty, 2007). A great number of these writings can be found online.1 This state of flux is not only desirable; it is also vital for a political way of thinking. So dont expect me to present in this short paper a mainstream liberal view. There is no mainstream and we shouldnt look for one (Barry, 1987; Boaz, 1997; Murray, 1997; Fried, 2007; Hamowy, 2008; Miron, 2010; Brennan, 2012). I am going to present my own version, or rather my own perception of what constitutes the basics of a liberal approach to politics, society, institutions and the economy.

The democratic and liberal principles

For me, there are two overarching ideas connected with the liberal approach: the priority of personal freedom and the priority of economic freedom. These two freedoms are prioritized over collective decisions. They are not absolutes; there is a presumption of liberty not a dogmatic adherence to principles. Let me explain. In democratic societies, decisions are made collectively. The best way to decide collectively is the democratic way: the majority wins. When there is a disagreement and in a democracy there is always disagreement decision by a majority ensures legitimatization, and at the same time is the decision-making process most compatible with freedom. This is called the democratic principle, and as is well known, it was devised in ancient Athens (Schmidtz and Brennan, 2010, pp. 44-50).

See e.g. or

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Is it politically desirable for the majority to decide every case of disagreement? Is the role of majority to decide on everything? No. There is an area where individuals should be free to decide for themselves even when their decisions have an impact on society. This area is protected by rights the most important political tools for every liberal (Dworkin, 1978). Rights define the area of personal freedom where society, the majority, and the government cannot intervene. What is the extent of this area? This is still under discussion. John Stuart Mill defined this area better than anyone else: [T]he sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is selfprotection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinion of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not for compelling him, or visiting him with any evil in case he do otherwise. To justify that, the conduct from which it is desired to deter him, must be calculated to produce evil to some one else. The only part of the conduct of any one, for which he is amenable to society, is that which concerns others. In the part which merely concerns himself, his independence is, of right, absolute. Over himself, over his own body and mind, the individual is sovereign. (Mill, 1859, Ch. 1)


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As you can see, Mill not only defines the area of permissible government interference with private choices (the harm principle) but he also takes for granted that there must be a presumption of personal freedom. Decisions by societies, majorities and governments are residual not the rule but the exception. There is of course a rich literature that tries to interpret harm (Stephen, 1873; Hart, 1963; Devlin, 1968; Feinberg, 1984-1988; Wertheimer, 2002). Does this include extreme offence? Does it include negative externalities (Trebilcock, 1993; Hatzis, 2013)? Could we add collective action problems to the cases where the government should limit liberty? Is this view compatible with social contract theories? Independently of the answers to these questions we should emphasize the essence of this argument: there is a presumption of personal freedom; the proof of the necessity for restrictions to personal freedom always lies with the government. In a liberal democracy there is a personal domain protected by negative rights. This domain should be shielded not only from an authoritarian government but also from a democratic majority (Danford, 2000, pp. 159-172). This domain should be under the protection of the rule of law and its most powerful institutional weapon: the constitution. Lets call this the liberal principle. The liberal principle was devised and introduced by James Madison1 in the U.S. Constitution of 1787 and the U.S. Bill of Rights of 1789.2 The controversial3 ninth amendment is illustrative of Madisons

Wherever the real power in a Government lies, there is the danger of oppression. In our Governments, the real power lies in the majority of the Community, and the invasion of private rights is chiefly to be apprehended, not from the acts of Government contrary to the sense of its constituents, but from acts in which the Government is the mere instrument of the major number of the constituents. (James Madison, Letter to Thomas Jefferson, 17 October 1788). The distinction between the ancient conception of liberty (emphasizing political participation) and the modern conception of liberty (emphasizing rights and the rule of law) was made for the first time by Benjamin Constant in 1816 (for more see: Holmes, 1984). See Barnett (1993). According to Barnett, the ninth amendment establishes a presumption of liberty (implementing the ninth amendment challenges

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philosophy for the protection of the domain of personal freedom from the power of the majority: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. The most interesting question today is that about the balance between these two principles: the democratic principle and the liberal principle. They are apparently contradicting, but at the same time they complement each other. Make no mistake. There can be no liberalism without democracy. Its an oxymoron. On the other hand, an illiberal democracy is possible and also quite common. Illiberal is a democracy where there are regular elections, the majority is supposedly free to pick the winning party, the democratic principle is generally respected, but not the liberal principle (Zakaria, 2004). In an illiberal democracy individual rights are not respected or adequately protected, the institutions of the rule of law are undermined or underdeveloped, and the constitution is not a shield against majority excesses but a legal weapon establishing majority power and stifling minority voices. Civil society is notoriously absent, and often individual behavior is restrained by religion and/or conventional morality. These societies are always characterized by an authoritarian combination of legal paternalism and legal moralism. Thus, balance between these two principles is essential for the quality of a liberal democracy. The better the balance the better the quality of a democracy. A society where people are regularly called upon to express their values, preferences and choices through voting, and where an extended area of personal liberty is safeguarded by the rule of law, is
us to protect un-enumerated rights without determining a final list of such rights, and without lending credence to illegitimate claims of right).


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a liberal society. Individuals in this society are in charge of their lives they are personally autonomous. In such a society, well-being is linked to individual preferences. It is not determined by society, by a majority or by a committee of experts. Well-being is achieved by the satisfaction of preferences through choices and contracts. This is only possible if the choice is free and contracts are protected and encouraged, provided there is mutual consent (Foka-Kavalieraki and Hatzis, 2009). These values (choice, consent and contract) can be compatible only with a free market. If the market is not free, people are not able to choose freely; their consent does not matter and their contracts are not enforced. It is apparent that a free market is a necessary condition for personal autonomy and freedom. However, a free market is also indispensable for well-being. I belong to a liberal current called liberal utilitarianism, which is closely connected with the work of John Stuart Mill in the 19th century and the Chicago School of Economics in the 20th century. I emphasize the instrumental value of the market as the creator of wealth and the guarantor of well-being, but without dismissing its moral value. I dont share the view that the free market is always self-correcting and efficient. I believe that government intervention is sometimes necessary to solve the problem of collective action, to correct market failures and provide an institutional framework that is essential for a well-functioning market (Foka-Kavalieraki and Hatzis, 2009). I also believe that a liberal cannot be indifferent to the fate of a fellow individual in a society, especially where his or her fate is not the result of choices made but of the natural lottery (Rawls, 1971). A truly liberal society does its best to ensure equality of opportunity and to provide a safety net for the less advantaged (Tomasi, 2012). Liberalism, thus, doesnt preclude government intervention. It is suspicious of it and alert for government failures. It is an exception worth having if the benefit for liberty and well-being is far greater than the cost.

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If we look at the world map of political freedom and compare it with the world map of economic freedom we will realize there is a correlation. If we study more closely this correlation we will discover that there is a two-way causal relationship: political freedom leads to economic freedom; economic freedom leads eventually to political freedom. Less political freedom leads to less economic freedom; less economic freedom leads to less political freedom (Wu and Davis, 2004; Thies, 2007). What about China? China is not economically free. It is very lowly ranked on indices of economic freedom. However, it is freer than North Korea. If China continues to liberalize its economy the political repercussions are inevitable. A road towards more economic freedom is a road towards more political freedom, more political participation, and more democracy. I hope that from the above discussion it has become obvious that if we are trying to find a consensus among liberals we should base it on these two presumptions: the priority of personal freedom and the priority of economic freedom. A liberal society is a democratic society with an emphasis on rule of law, rights and personal autonomy. The free market is the only kind of economic organization that is compatible with this society.

The Greek experience

What about Greece? Greece follows the above recipe for liberty. It is a liberal democracy with a free market. However, there are so many black spots in this picture that the picture itself seems black, especially if you look at it from a near distance. Unfortunately, liberal thinking is underdeveloped today in Greece and as a result liberal policies are unpopular, discredited or unknown. This is the result of many factors, most of all of the absence of a strong liberal intellectual tradition in Greece during the 20th century. This was not so in the 19th century when Greece had its national but also democratic and liberal revolution. You could


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have found then genuine liberal essays, like Greek Rule of Law ( ) by an anonymous Greek intellectual declaring that: He who ignores Liberty, also ignores the essence of his existence because Liberty is more essential for man than his own existence. Liberty makes life pleasant, it produces guardians for our Motherland, lawmakers, virtuous and wise people. Only Liberty honors humankind. You could have found genuine liberal intellectuals like Adamantios Korais and others who had regular correspondence with Thomas Jefferson, Jeremy Bentham and John Stuart Mill (Horton, 1976; Rosen, 1992). When Greece was liberated from the Ottoman Empire in 1821, the first Greek constitutions were both democratic and liberal (see: Clogg, 2002; Koliopoulos and Veremis, 2010). The short-lived Greek constitution of 1827 was the most democratic and liberal of its era; it was more progressive in many respects than the U.S. or the French constitutions. Rule of law was established in Greece as early as 1822 and the rights of life, liberty, property, safety, the freedom of religion, speech, expression and the press were safeguarded. Torture was prohibited and slavery was abolished as well as nobility titles. According to the constitution of 1827, the only source of political authority is the Greek people. Every political power originates from the people and exists only to serve the people. In 1844, Greece becomes the first country in the world with universal male suffrage. Nine out of 10 Greek adult citizens had the right to vote in an era where in Great Britain only one out of 12, and in France one out of 200, had the same right. Greece, despite political strife had a consistent democratic political life with broad political participation from the early 19th century to 1974, with only two relatively short periods of

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dictatorship, from 1936 to 1940 and from 1967 to 1974. However, there were several periods where Greece was an illiberal democracy, the most recent one was the period from 1949 to 1967 when following a civil war the Communist Party was outlawed and leftwingers were persecuted and repressed. For the past 40 years, after the fall of the military junta in 1974, Greece has become one of the most democratic countries in the world. Nevertheless, I wouldnt characterize it a model of liberalism for several reasons. One is that the Greek economy is not as free as it should be. Another reason is that the protection of individual rights is not ideal. A third reason is that despite the prevalence of liberal ideas in 19th century Greece, the absence of leading liberal intellectuals in the 20th century was depressing. Only after 1974 and the return to democracy did a number of scholars, intellectuals, journalists and politicians come back to Greece, bringing with them the ideas of what was erroneously called neo-liberalism. These intellectuals had to fight prejudice, ignorance and political short sightedness. They managed to survive and to inspire the emergence of a small community of liberal-minded citizens. The progress since 1974 is more than significant. Nevertheless, it is less than expected and hoped. This is obvious today. Despite the bankruptcy of the illiberal policies of the past 40 years and the degeneration of the Greek political system, the presence of liberals in Greek political life is marginal. There is a paradox in this phenomenon. The liberal view is adequately expressed in the traditional media: a number of liberal-minded columnists are very popular and influential, and in almost every newspaper including traditional left-wing newspapers you can find every day articles that are very friendly to liberal ideas and causes. This is unprecedented. At the same time liberal thinking is everywhere to be found in the new social media, with the added effect of making possible the creation of strong liberal online communities. Unfortunately this dynamic is not expressed politically. The results in the last two election polls were disheartening. One should wonder


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if this is the result of a lively minority creating too much noise and little political substance. But lets examine the blind spots in Greeces liberal faade more closely. Greeces ranking on economic freedom is deplorable. In the latest Index of Economic Freedom, Greece is characterized as mostly unfree (117th out of 177). You will find similar results if you look in other indices, like the Economic Freedom of the World index. According to the annual survey of the World Bank (Doing Business) for 2013, Greece comes in 78th out of 185 countries around the world in terms of the overall ease of doing business. It is, of course, the worst place in both the European Union and the OECD. This sounds more than outrageous. Greece, a European Union member for the past 30 years, a member of the Eurozone for the past 10 years and formerly one of the 25 richest countries on the planet, ranks far below Kazakhstan, Rwanda, Ghana and Mongolia. Also below much poorer neighbors like Bulgaria, Turkey and Romania. This is so because the Greek economy has been for years hostile to entrepreneurship and the free market in general. You should also take into consideration that this position is much better than the one Greece had two to three years ago. The Greek government during the past three years attempted to open closed professions and to limit the entitlements of public sector unions. The result was always with few notable exceptions a crushing defeat for the government by powerful pressure groups who are determined to continue preying on Greeces finances, indifferent for the common good. They manage to wipe out any vestiges of a free market system, transforming Greece into a model of corporatism, statism and cronyism.

The institutional deficit

Its not difficult to imagine what a liberal agenda would look like in a situation like this:

Bridging the Gap Open markets Abolish closed professions Repeal regulations Make the tax system efficient and just


Reform the welfare system. Transform it from a spoil for powerful groups to a real safety net Fight corruption Fight pressure groups, cartels, and government sustained businesses Construct an institutional framework appropriate for economic development Liberals, quite often, are so much preoccupied with economic liberty they forget political liberty, individual rights and the rule of law. Greeces deficit is not only financial. As we have already seen it is first and foremost an institutional deficit. This institutional deficit includes deficient protection of individual rights. Economic freedom is not the only freedom with insufficient protection. Let us discuss briefly some leading issues where this deficit is more than obvious. I believe that a liberal policy should address all these issues: 1. Violence. Greek intellectuals, academics, authors, journalists are afraid of expressing their opinions in several circumstances. I dont mean that there is no freedom of expression in Greece. However, a lot of people in Greece are afraid to express themselves, fearing violent retaliation by extremists of left and right. A liberal agenda should emphasize protection of every opinion and punishment for violent acts, especially hate acts.


Bridging the Gap 2. Police brutality and torture. There are too many depressing reports issued by international human rights organizations and stories published by international newspapers revealing widespread abuses of fundamental rights and affronts to human dignity. Its a disgrace for a civil society. 3. Freedom of expression. There are numerous incidences of infringement of the rights of free speech by the government, the courts and independent agencies like the Greek National Council for Radio and Television. Sometimes these infringements are outrageous and are almost always ridiculous, as the banning by a court of a communist student club in a small provincial town because its activity could endanger the relations of Greece with its allies! 4. Freedom of the Press. The press is free in Greece and sometimes not even constrained by a code of ethics. However, there is a web of laws and regulations creating obstacles and disincentives for journalists seeking to unravel the truth. Powerful persons and groups are using this web to deter journalists quite successfully. 5. Freedom of conscience. The Greek state is an officially Greek Orthodox state. Greece is in many respects a theocratic country. The separation of church and state should be one of the leading causes in any liberal agenda. Athens is still the only capital in Europe without a mosque! 6. Right of self-determination. Greece has been condemned by the European Court of Justice numerous times for not allowing ethnic and religious minorities to express themselves. The self-proclaimed Turks or Macedonians should have the right to express their perceived identity freely. A liberal agenda should give to these minorities the right (not a collective right, an individual right) to selfdetermination. 7. Right to self-ownership. The army in Greece is still mandatory. A liberal agenda should ask for an abolition of

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conscription. The decriminalization of drug use is also crucial if we want to call our society liberal. 8. Political and legal equality. A liberal agenda should also give priority to political and legal equality. A crucial issue is the problem of marriage equality. In Greece, gay people cannot even form civil unions. I believe that a liberal agenda should include this extremely important right for a civil society. 9. Protection of immigrants and vulnerable minorities. The Greek state has been embarrassed several times by the negative reports of international organizations on immigrants and vulnerable minorities, like Roma. A liberal agenda should be protective of minorities and immigrants. 10. Academic freedom. In Greece, private universities are prohibited by the constitution even non-profit ones. Article 16 of the Greek constitution is a disgrace for every liberty-loving person. It should have been amended a decade ago. At the same time, Greek public universities should be liberated from the forces of the dark; from professional occupiers who ensure low quality studies, restrict freedom of speech, and promote a mafia-style system of corruption and decadence.

Towards a liberal education

For me the most important mission for liberal intellectuals today in Greece but also in Egypt and the Arab world is education: education for liberalism. There is no other way to make liberal ideas popular and liberal policies feasible. Especially young people should be acquainted with these ideas. I am more than confident that the encounter with these ideas will make young people appreciate them, or at least will give them a chance. Friedrich Naumann (1909), more than a century ago, had the same insight for Germany: Education for liberalism is in no way merely the education of members of parliament; at a much higher


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level, it is about educating the people for liberal thinking and action. I know how romantic and unrealistic many of these ideas may sound. These cannot be achieved in a day, in a year or sometimes not even in a lifetime. It takes a transformation of society for these goals to be achieved. It takes a liberal education.

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Ashford, Nigel and Stephen Davies (Eds.), A Dictionary of Conservative and Libertarian Thought (London: Routledge, 1991). Barnett, Randy E., Restoring the Lost Constitution: The Presumption of Liberty (Princeton: Princeton University Press, 1993). Barry, Norman P., On Classical Liberalism and Libertarianism (New York: St. Martins Press, 1987). Boaz, David, Libertarianism: A Primer (New York: Free Press, 1997). Brennan, Jason, Libertarianism: What Everyone Needs to Know (New York: Oxford University Press, 2012). Clogg, Richard, A Concise History of Greece (Cambridge: Cambridge University Press, 2nd Ed, 2002). Conway, David, Classical Liberalism: The Unvanquished Ideal (London: Macmillan, 1995). Danford, John W., Roots of Freedom: A Primer on Modern Liberty (Wilmington, DE: ISI Books, 2000). Devlin, Patrick, The Enforcement of Morals (London: Oxford University Press, 1968). Doherty, Brian, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (New York: Public Affairs, 2007). Dworkin, Ronald, Taking Rights Seriously (Cambridge, MA: Harvard University Press, 2nd Ed, 1978). Feinberg, Joel, The Moral Limits of the Criminal Law (4 Vols.). I. Harm to Others (1984), II. Offense to Others (1985), III. Harm to Self (1986), IV. Harmless Wrong-doing (New York: Oxford University Press, 1984-1988).


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Foka-Kavalieraki, Yulie and Aristides N. Hatzis, The Foundations of a Market Economy: Contract, Consent, Coercion, European View, Vol. 9 (2009), pp. 29-37. Fried, Charles, Modern Liberty and the Limits of Government (New York: Norton, 2007). Hamowy, Ronald (Ed.), The Encyclopedia of Libertarianism (Thousand Oaks, CA: Sage, 2008). Hart, H. L. A., Law, Liberty, and Morality (Stanford: Stanford University Press, 1963). Hatzis, Aristides N., Moral Externalities: An Economic Approach to the Legal Enforcement of Morality, in A. N. Hatzis (Ed.), Norms and Values in Law and Economics (London: Routledge, 2013). Holmes, Stephen, Benjamin Constant and the Making of Modern Liberalism (New Haven, CT: Yale University Press, 1984). Horton, Andrew S., Jefferson and Korais: The American Revolution and the Greek Constitution, Comparative Literature Studies, Vol. 13 (1976), pp. 323-329. Huemer, Michael, The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey (New York: Palgrave Macmillan, 2013). Kelly, Paul, Liberalism (Cambridge: Polity, 2005). Koliopoulos, John S. and Thanos M. Veremis, Modern Greece: A History Since 1821 (London: Wiley-Blackwell, 2010). Meinardus, Ronald and Ahmad Nagui (Eds.), Why I Am Liberal: Egyptian Youth Essays on Liberalism (Cairo: Friedrich Naumann Foundation for Liberty, 2010). Mill, John Stuart, On Liberty (London: J. W. Parker and Son, 1859). Miron, Jeffrey A., Libertarianism: From A to Z (New York: Basic Books, 2010). Murray, Charles, What It Means to Be a Libertarian: A Personal Interpretation (New York: Broadway Books, 1997).

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Narveson, Jan, The Libertarian Idea (Philadelphia: Temple University Press, 1998). Nozick, Robert, Anarchy, State, and Utopia (New York: Basic Books, 1974). Powell, Jim, The Triumph of Liberty: A 2,000-Year History Told Through the Lives of Freedoms Greatest Champions (New York: Free Press, 2000). Rawls, John, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971). Rosen, Fred, Bentham, Byron and Greece: Constitutionalism, Nationalism and Early-Liberal Political Thought (Oxford: Clarendon Press, 1992). Schmidtz, David and Jason Brennan, A Brief History of Liberty (Oxford. Wiley-Blackwell, 2010). Stephen, James Fitzjames, Liberty, Equality, Fraternity, R. J. White (Ed.) (Chicago: University of Chicago Press, 1991 [1873]). Thies, Clifford, The Relationship Between Political and Economic Freedom Reconsidered, Journal of Private Enterprise, Vol. 22, No. 2 (2007), pp. 95-118. Tomasi, John, Free Market Fairness (Princeton: Princeton University Press, 2012). Trebilcock, Michael J., The Limits of Freedom of Contract (Cambridge, MA: Harvard University Press, 1993). Wertheimer, Alan, Liberty, Coercion, and the Limits of the State, in Robert L. Simon (Ed.), The Blackwell Guide to Social and Political Philosophy (Malden, MA: Blackwell, 2002), pp. 38-59. Wu, Wenbo and Otto A. Davis, Economic Freedom and Political Freedom, in Rowley, Charles K. and Friedrich Schneider (Eds.), The Encyclopedia of Public Choice (New York: Kluwer, 2004), pp. 161-172. Zakaria, Fareed, The Future of Freedom: Illiberal Democracy at Home and Abroad (New York: Norton, 2004).


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Liberalism and conspiracy theories: Greece and Egypt

Asteris Huliaras
Public views in Greece and Egypt are sometimes strikingly similar. In both countries conspiracy theories are la mode. Conflict, instability, foreign intervention and the redrawing of international boundaries in their respective regions (the Balkans and the Middle East/Africa) have created feelings of insecurity. Economic crisis and political transition made uncertainty and fear widespread. Semi-dormant conspiracy theories came to forefront, undermining rational debate and political accountability. Conspiratorial explanations of political events or economic developments are based on the belief that behind the scenes there is a deliberate plan, formulated in secret by powerful foreign actors. For conspiracy theorists, the truth is out there and is systematically concealed by powerful enemies. Conspiracy theories are based on mistrust and suspicion. Conspiracy theories are not new. It is believed that Emperor Nero concocted an elaborate tale to shift the blame to the Christians for the burning of Rome. But most analysts argue that in their modern form, conspiracy theories emerged during the French Revolution of 1789. Then, the enemies of the revolution (royalists, etc.) promoted the view that the revolution was a machination of Freemasons, Jewish traders and the Illuminati to control France.1 The Tsarist regime in Russia and the Nazis gave a great boost to conspiratorial thinking. McCarthyism in the United States showed

See, for example, Tackett, Timothy, Conspiracy Obsession in a Time of Revolution: French Elites and the Origins of the Terror, 1789-1792, The American Historical Review, Vol. 105: June (2000), pp. 691-714.


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that conspiracy theories are a worldwide phenomenon, irrelevant of space and time, regime type or level of economic development. There is a wide literature on the causes of conspiracy theorizing.1 Philosophical approaches focus on information: it is the low quantity and quality of evidence that drives belief in conspiracy theories. The claim of this school is that people adhere to conspiratorial thought because they do not have accurate and authoritative information. Psychological approaches argue that conspiracy theories are mental shortcuts. They note that conspiracy theories meet a basic human need: to balance the magnitude of any given effect by the magnitude of the cause behind it. After all, a world in which tiny causes can have huge consequences is scary and unreliable. Therefore, a grand disaster like a war or a large-scale terrorist attack, like 11 September 2001, needs a grand conspiracy behind it. Sociological approaches argue that culture is key in understanding conspiracy theorizing. The way groups view themselves in relation to others helps determine how likely they are to view events as conspiracy-related. By this logic, culture is a filter that screens out unflattering information and favors complimentary narratives. Finally, political explanations of conspiracy thinking focus on power and interests. Political scientists believe that certain groups benefit from conspiracy theories and, thus, have a real interest in promoting them. Most political scientists claim that conspiratorial thought operates symmetrically on both ends of the political spectrum. People on the right and the left are equally prone to having less faith in democracy, are equally prone to cynical and suspicious views, and equally prone to believing that politicians conceal their true aims and make decisions in secret. In Greece, the typical conspiracy theory is the foreign finger (xenos daktylos) and in the Arab world the hidden hand. On both shores of the Mediterranean large groups of people tend to adhere to

For a brief review see: Uscinski, Joseph E., Joseph M. Parent and Bethany Torres, Conspiracy Theories are for Losers, Unpublished paper presented at the 2011 American Political Science Association annual conference, Seattle.

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conspiracy theories. And these groups of people do not necessarily consist of the non-educated, the economically marginal or the politically excluded. For example, a recent study on Greek junior army officers political perceptions found they see Greece as a puppet in the hands of great powers. Junior army officers in Greece support conspiracy theories that present Greece and its rival, Turkey, as non-sovereign countries whose policies are dictated by more powerful states and interests, always with a hidden agenda. Their view is that Greece will never go to war with Turkey unless the Americans wish it so.1 It has been argued that conspiratorial explanations tend to flourish in response to unusual, unexpected or traumatic events. In particular, conspiracy theories gain ground when the population of a country feels insecure or persecuted. Indeed, conspiracy theories are rarely created de novo, but rather draw on a tradition of conspiratorial accounts.2 Sutton claims that viewing the foreign finger as decisive in Greek political and diplomatic calculations is not an exception but the consistent pattern in Greeces relationship with the West.3

Greece: Fear and paranoia

In the last three to four years, Greek politicians, intellectuals and the general public argued that the economic crisis was a plot by dark foreign forces to subdue proud, independent nations. Political parties of both left and right promoted several conspiracy theories: the

Kirtsoglou, Elisabeth, Phantom Menace: What Junior Greek Army Officers Have to Say About Turks and Turkey, South European Society and Politics, Vol. 11, No. 1 (2006), p. 169. 2 Lipset, Seymour Martin and Earl Raab, The Politics of Unreason: Rightwing Extremism in America, 1790-1977 (Chicago: University of Chicago Press, 1978). 3 Sutton, David, Poked by the Foreign Finger in Greece: Conspiracy Theory or the Hermeneutics of Suspicion? in Keith S. Brown and Yannis Hamilakis (Eds.), The Usable Past: Greek Metahistories (Lanham, MD: Lexington Books, 2003), p. 197.


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West is trying to destroy Greece because it is jealous of its past glories; foreign interests have their eyes on the rich oil and gas deposits in the Aegean; and that the relationship with the European Union is a poker game and the northern Europeans are simply bluffing. Of course it is very convenient to blame others for your own misery or mistakes. Politicians have an interest in pointing to some outside enemy, real or imagined. This practice enables them to divert attention from ineffective and inefficient administration. For example, even the Western-educated, moderate and low profile former Greek Prime Minister George Papandreou, speaking at the World Economic Forum in Davos, said in 2010: This is an attack on the Eurozone by certain other interests, political or financial, and often countries are being used as the weak link, if you like, of the Eurozone. We are being targeted, particularly with an ulterior motive or agenda, and of course there is speculation in the world markets.1 Mikis Theodorakis, Greeces most famous composer, expressed the visceral reaction of many Greeks when he said the crisis was probably a plot by dark forces in America and other capitalist countries to subdue proud, independent nations. In an open letter to the international community he claimed: There is an international conspiracy whose target is the complete destruction of my country. They began in 1974 aiming at modern Greek civilization, continued with the distortion of our modern history and our national identity and they are now trying to eliminate us

Cited in Charlemagne, Just Who Are These Dark Forces Attacking Greece? The Economist, 29 January 2010, p. 55.

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Indeed, many such perceptions are based on past experiences: U.S. support for the Greek junta and especially U.S. inaction on the Turkish invasion of Cyprus that, for many Greeks, was masterminded by Henry Kissinger. A few years ago, a Greek leftwing periodical claimed to uncover the secret plan to tame the Greeks by publishing an alleged statement by Kissinger: The Greek people are anarchic and difficult to tame. For this reason we must strike deep into their cultural roots. Perhaps then we can force them to conform. I mean, of course, to strike at their language, their religion, their cultural and historical reserves, so that we can neutralize their ability to develop, to distinguish themselves, or to prevail; thereby removing them as an obstacle to our strategically vital plans in the Balkans, the Mediterranean, and the Middle East. It doesnt appear to matter that Kissinger denies he ever said that. The paragraph has been reproduced in newspapers, blogs, and online forums. It is proof of an international conspiracy, according to an argument constantly repeated, until today. The idea is always the same: the foreigners want to destroy us. The countless magazines on extra-terrestrial life, the mysteries of life, etc., confirm the thirst of the Greeks for conspiracies. TV shows such as those of Mr. Tragas, Mr. Hardavelas (not on any longer) and Mr. Liakopoulos are proof that conspiracy theories are widely popular in the country, though hard data on public opinion


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support for conspiracy theories is largely unavailable. Pollsters, however, believe it is widespread. Moreover, sometimes the belief in conspiracy theories becomes totally paranoiac. Some (though marginal) Greek media claim that the masterminds of the world have decided to control Greeks with chemicals that they inject in the water supply. They also argue that fruit and vegetables are poisoned with pesticides that limit Greek citizens intelligence and make them easy targets for a bombardment of propaganda. They even argue that airplanes are spraying the country with chemicals (to prove their accusations the reproduce photographs that show planes leaving long lines in the sky socalled chem-trails).

Egypt: The Arab Spring conspiracy

In Egypt and other Muslim countries, the Arab Spring was presented as a foreign plot aimed at weakening Arab armies. Many Arab politicians, activists and journalists argued that the Arab Spring was an American plan to divide the Middle East into smaller rival nations, and to plunder their wealth. Recent events in Egypt, Libya, Yemen and Syria have been explained as a calculated plot to destroy Arab countries and wipe out their rich heritage and history. Many of those who believe the Arab Spring is part of a conspiracy theory have linked their views to the remarks, articles and literature of non-Arab intellectuals, like Bernard Lewis. The U.S. military intervention in the Gulf in 1991 gave a great boost to conspiracy theories. To some conspiracy theorists, Saddam Hussein was deliberately drawn into a trap of invading Kuwait, whether to start a war that would destroy or weaken his military, or for the West to gain greater access to Iraqs oil, or to protect Israel from a perceived threat from an idle Iraqi military.1 Saddam himself made similar claims.

Gray, Matthew, Explaining Conspiracy Theories in Modern Arab Middle Eastern Political Discourse: Some Problems and Limitations of the

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Terms like the New Middle East, coined and promoted by U.S. officials in relation to the invasion of Iraq in 2003, gave more credence to conspiratorial explanations. In 2004, the Bush administration adopted the Greater Middle East Project with the goal of encouraging political, economic and social reforms in the Arab world and the wider region. Despite that the project did not bear any fruit and was in several respects a complete fiasco, it helped to create or strengthen a perception that the United States was behind the overthrow of Ben Ali in Tunisia and Mubarak in Egypt and also the civil war in Syria. The view that the Arab Spring is a Western plot was also promoted by several Arab regimes. Gaddafi in Libya and Al-Assad in Syria made similar allegations. The truth is that the upheavals in the Arab world came as a surprise to many Western foreign ministries. Frances minister of defense offered help with police training to Ben Alis Tunisia at the same time that demonstrations were gathering momentum. Also, Washington initially signaled support for Hosni Mubarak during the rallies against him. Hillary Clinton said she was sure that the Mubarak regime was stable. The U.S. was also reluctant to lose an ally against Al-Qaeda in Yemen such as Ali Abdullah Saleh. The United States was likewise unhappy with the uprising in Bahrain. And Obama was very reluctant to get involved in the French-inspired military intervention in Libya. The truth is that the uprisings were spontaneous, indigenous, centered on dissatisfied youth, and there is a lot of evidence that they took great Western powers completely by surprise. A crucial similarity between Greece and Egypt is that there are a lot of state-sponsored conspiracy theories. It is obvious that conspiracy theories help divert attention away from the states political or developmental failures and towards a constructed enemy. As in the French Revolution, the ancien rgime fought back.

Literature, Critique: Critical Middle Eastern Studies, Vol. 17, No. 2 (2008), p. 156.


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A history of real conspiracies

Very few notions nowadays generate as much academic resistance and hostility as the belief in the historical importance of political conspiracies. As Jeffrey M. Bale argues, the idea that particular groups of people meet together secretly or in private to plan various courses of action, and that some of these plans actually exert a significant influence on particular historical developments, is typically rejected out of hand and assumed to be the figment of a paranoid imagination.1 However, the academic literature on negotiations, coup dtat, espionage, covert action, political corruption, organized crime, terrorism and revolutionary warfare have analyzed in detail clandestine and covert political activities on a more or less regular basis.2 In the recent history of the Balkans and the Middle East, several real conspiracies have taken place, and great powers have for long periods manipulated local politics by buying off politicians, sponsoring political parties, organizing or supporting coups and propping up minority communities. The Sykes-Picot Agreement of 1916, the overthrow of Mohammad Mosaddeq in 1953, the Levon affair of 1954, the Suez crisis of 1956 and the Iran-Contra affair of 1985-6 are blatant examples of great power secret interventions in the Middle East. These incidents provide a fertile ground for Middle Eastern conspiracy theories. In Greece, perceptions of a foreign finger are also warranted. Experiences of betrayal by the West tend to provide justification for current conspiracy theories. Protagonists

Bale, Jeffrey M., Political Paranoia v. Political Realism: On Distinguishing Between Bogus Conspiracy Theories and Genuine Conspiratorial Politics, Patterns of Prejudice, Vol. 41, No. 1 (2007), p. 47. 2 Ibid, p. 49.

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in Greeces internal quarrels have long invoked external assistance, while furiously denouncing any foreign help given to their rivals. During the right-left civil war of 1946-49, each side reserved particular loathing for its foes foreign backers, American or Soviet. The idea of a manipulating foreign finger has in fact dominated modern Greek history. Several studies have shown that conspiratorial accounts have a long history in the Balkans and Middle Eastern countries.1 Recent developments in the wider region conflict, foreign intervention and redrawing of international boundaries helped to promote conspiratorial explanations. During the 1999 NATO bombings of Yugoslavia, the countrys establishment (politicians, official media and intellectuals) adopted conspiracy theories referring to the secret plans of the Bilderberg Group, the Council on Foreign Relations and the Trilateral Commission that were supposedly conspiring to destroy Serbia.2 Similar views emerged in Greece. The international intervention was portrayed as an extension of the long history of Western colonialism. Greeks wove stories of poorly concealed hidden interests to control the regions natural resources and conquer independent-minded nations.3 For many Greeks, the breakup of Yugoslavia and the redrawing of international boundaries was a German plot with the support of the Vatican. Similar views emerged in Egypt. According to Egypts Muslim Brotherhood, South Sudans independence was the fruition of a century-old Western ecclesiastical plot to close Islams gateway into Africa, and the start of a plan to break other Arab countries into feeble statelets

Daniel Pipes, The Hidden Hand: Middle East Fears of Conspiracy (Basingstoke: Macmillan 1996). 2 Byford, Jovan and Michael Billig, The Emergence of Anti-Semitic Conspiracy Theories in Yugoslavia During the War with NATO , Sociologija, Vol. XLVII, No. 4 (2005), pp. 307-322. 3 Brown, Keith and Demetrios Theodossopoulos, Rearranging Solidarity: Conspiracy and World Order in Greek and Macedonian Commentaries on Kosovo, Journal of Southern Europe and the Balkans, Vol. 5, No. 3 (2003), p. 333.


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so as to grab their riches.1 Indeed, there is some truth in both accounts. Germany pressured its EU partners to recognize the independence of Slovenia and Croatia. And the US and Israel strongly supported the independence of South Sudan. For many years Egypt sought to impede South Sudans quest for independence ostensibly because of fears over the White Niles headwaters. Greek foreign policy-makers shared with Egyptians counterparts the view that the redrawing of international boundaries would create a dangerous precedent. Greece favored the status quo in the Balkans, fearing the disruption of the trade route to Western Europe its own Nile. In both countries, war, instability and the changes in international boundaries in their wider regions created a lot of uncertainty and promoted conspiracy theories. However, there are fundamental differences between conspiracy theories and actual covert and clandestine politics, differences that must be taken into account if one wishes to avoid serious errors of historical interpretation. Its one thing to believe that there are clandestine actions and another to embrace the idea that everything that is truly significant happens behind the scenes. We can conclude that conspiracy theories tend to flourish in the Eastern Mediterranean partly because the region has a long history of real conspiracies and interventions by great powers. Instability in the wider region (violent conflict, foreign intervention, redrawing of international boundaries) is also responsible for feelings of uncertainty since in both the Balkans and the Middle East national sovereignty is a sacred concept. Finally, political transition (in Egypt) and economic crisis (in Greece) strengthened conspiracy thinking as old and new elites searched for legitimacy.

South Sudan and the Arab World: A Plot to do down Islam, The Economist, 13 January 2011.

Bridging the Gap Figure 1. Causes of conspiracy theorizing Greece A modern history full of real conspiracies. Conflict in the wider periphery. New international boundaries Political and economic instability Egypt


Epilogue: Say No to international conspiracies

There is nothing in Greek and Egyptian political cultures that make them more susceptible to conspiracy theories. Conspiracy theories are present all over the world. Even in the richest Western countries, belief in conspiracy theories is widespread. In August 2004, a poll by Zogby International showed that 49 percent of New York City residents, with a margin of error of 3.5 percent, believed that officials of the U.S. government knew in advance that attacks were planned on or around 11 September 2001, and that they consciously failed to act.1 In a Scripps-Howard Poll in 2006, with an error margin of four percent, some 36 percent of respondents assented to the claim that federal officials either participated in the attacks on the World Trade Center or took no action to stop them.2 However, no conspiracy theory offers a way out of the mess. In fact, conspiracy theories impede clear thinking and allow political elites to escape responsibility for their actions. Conspiracies undermine democratization and economic reform. They lead citizens to inaction. Their real message is that since a foreign
1 2

Cited in Sunstein, Cass R. and Adrian Vermeule, Conspiracy Theories, Journal of Political Philosophy, Vol. 17, No. 2 (2009), p. 202. Ibid.


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Other is responsible for your problems, you can do nothing to change your condition. Only by taking responsibility for ourselves, we the Greeks and the Egyptians can overcome the current turmoil. In fact, conspiracies are the enemies of liberalism. If we want to strengthen representative institutions, promote good governance and empower the people we have to abandon the belief in international conspiracies even if they sometimes prove true.

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Arab renaissance and economic freedom

Yusuf Mansur
While there is no single definition for economic freedom,1 the majority believes the concept to include free markets, free trade and private property.2 Further, as stated in the Economic Freedom of the World 2007 Annual Report, the key ingredients of economic freedom can be understood to include: personal choice, voluntary exchange coordinated by markets, freedom to enter and compete in markets, and protection of persons and their property from aggression by others. An economy is considered free when it provides secure protection for ones property (physical and intellectual), even-handed enforcement of contracts, a stable monetary environment, low taxes, little to no barriers to market entry, and rely more on markets than political decisions and processes in the allocation of resources. Indeed, the concept of political freedom underpins economic freedom. In Economic Freedom of the World 2007, we find the proposition that: Personal ownership of self is an underlying postulate of economic freedom. Because of this self-ownership, individuals have a right to choose to decide how they will use their time and talents. On the other hand, they do not have a right to the time, talents and resources of others. Thus, they do not have a

See Bronfenbrenner, Martin, Two Concepts of Economic Freedom, Ethics, Vol. 65, No. 3 (1955), pp. 157-170, and Sen, Amartya, Rationality and Freedom (Cambridge: Harvard University Press, 2004), p. 9. Friedman, Rose D. and Milton Friedman, Two Lucky People: Memoirs (Chicago: University of Chicago Press, 2008), p. 605.


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right to take things from others or demand that others provide things for them. And even if a country were democratic (i.e., people can vote and elect their own government), if political restrictions inhibit voluntary actions and personal choice, then political institutions would be in conflict with economic freedom.1 The most important component of human well-being, according to John Stuart Mill, freedom is to be able to pursue ones own good in ones own way; thus, happiness would accrue only to someone who was capable of choosing an independent path and who had the public sphere available in which to exercise that capacity.2 In Capitalism and Freedom (1962), Milton Friedman argued that economic freedom was a necessary condition for political freedom,3 and that property rights is the most basic human right. Friedrich von Hayek added that the certainty of law contributed to the prosperity of the West more than any other single aspect.4 Amartya Sen has called for understanding freedom in terms of capabilities to pursue a range of goals; thus, it is not only freedom of opportunities, but also of capabilities.5 Sen explains that furthering human development consists of advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it. That is, human development is not only about improving living standards, but also improving security, community and prosperity.6
1 2 3

4 5

Economic Freedom of the World 2007 Annual Report. Accessed at: Friedman, Milton, Capitalism and Freedom (Chicago: University of Chicago, 2002), pp. 8-213. Harper, David A., Foundations of Entrepreneurship and Economic Development (London: Taylor & Francis, 2007), pp. 66-71. Sen, Amartya K., Markets and Freedoms: Achievements and Limitations of the Market Mechanism in Promoting Individual Freedom s, Oxford Economic Papers, Vol. 45, No. 4 (1993), pp. 519-541. Sen, Amartya K., Development as Freedom (Oxford: Oxford University Press, 1999).

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In Why Nations Fail, Acemoglu and Robinson argue that a nations institutions, not geography or resources, are the most important element in development. The thesis is that political freedom is far more important than resources, climate, geography or culture. Inclusive regimes enable innovation and prosperity by allowing for and encouraging competing interests under the rule of law and secure property rights. Thus, inclusive democratic states that have independent judiciary systems thrive. Despotic, exclusionary, non-democratic regimes thwart development. Such extractive, totalitarian states put countries in a vicious cycle of plutocracy, suppression of innovation, and denial of economic and personal freedom.1 Such regimes, alas, describe the majority of states in the Arab world where for decades only Lebanon was considered a democratic state with an elected government and a thriving parliamentary opposition. Interestingly, the confessional basis of the ruling democracy, which is based on exclusion and extraction, has prohibited Lebanon from becoming the most advanced in the Arab world. Notwithstanding, because of its democracy and the freedoms enjoyed therein, and in spite of a weak government and the dearth of natural resources, Lebanon is considered among the best destinations for work and investment in the region. Iraq, after the U.S. invasion, can claim an elected government as well, and is thus another democracy. Sectarian violence and informal institutions, departure from rentierism to a merit based system, requires more than a decade, hence Iraq suffers today from the pains of growing into democracy.

Economic freedom and other factors

Based on the above, democracy, fighting corruption and freedom of the press are important elements for not only stability, but also the development of a country. The table below is a

Acemoglu, Daron and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown Business, 2012).


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combination of the Economist Intelligence Units Democracy Index, Transparency Internationals Corruption Perceptions Index, and Freedom Houses Freedom of the Press Index as presented in The Economist magazine at the outset of the so-called Arab Spring. Added to the table in the last column is the Economic Freedom of the World (EFW) rank in 2012 based on 2010 figures and data. Not all Arab countries were ranked by the EFW index. The democracy score ranking is out of 167 countries while the corruption ranking is out of 178. Table 1. Population, GDP per capita at PPP, democracy, corruption, freedom
Country Population (millions) Population under 25 GDP/capita, 1000 at PPP Democracy Corruption Freedom of Press Instability Index EFW rank

Algeria Bahrain Djibouti Egypt Iraq Jordan Kuwait Lebanon Libya Mauritania Morocco Oman Palestine Qatar KSA Somalia Sudan

35.9 1.2 0.9 84.6 31.4 6.4 3.5 4.3 6.5 3.4 32.4 3.3 4.1 1.7 27.1 10.1 43.2

47.5% 43.9% 57.2% 52.3% 60.6% 54.3% 37.7% 42.7% 47.4% 59.3% 47.7% 51.5% 64.4% 33.8% 50.8% 63.5% 59%

8.2 24 2.3 5.9 4 5.2 40.6 13.4 18.7 1.9 4.7 23.3 2.9 66.9 22.9 0.6 2.3

125 122 126 138 111 117 114 86 158 115 116 143 93 137 160 NA 151

105 48 91 98 175 50 54 127 146 143 85 41 NA 19 50 178 172

141 153 159 130 144 140 115 115 192 118 146 153 181 146 178 181 165

49.7 36.5 NA 65.7 65.7 48.7 21.7 30.7 71 57.4 46.8 58.4 NA 20.7 52.5 NA NA

137 7


23 19

102 20

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Country Population (millions) Population under 25 GDP/capita, 1000 at PPP Democracy Corruption Freedom of Press Instability Index

EFW rank

Syria Tunisia UAE Yemen

22.5 10.4 6.7 24.3

55.3% 42.1% 31% 65.4%

4.7 8.6 27.2 2.9

152 144 148 146

127 59 28 146

178 186 153 173

67.3 49.4 24.3 86.6

119 80 11

Source: Economist Intelligence Unit, Democracy Index; Transparency International, Corruption Perceptions Index; Freedom House, Freedom of the Press; Economic Freedom of the World, Annual Report 2012 (the lower the rank, the freer the economy); the Instability Index is compiled by The Economist, with a value of 100 indicating the most unstable.

Note that most of the Arab countries are young in terms of their youth population. Interestingly, when queried about economic integration, the majority of youth was for greater or complete Arab economic integration and cited that rulers fear such integration as an infringement on their absolutist authority within their respective countries.1 As far as democracy is concerned, the Arab countries performance is dismal and among the worst in the world if not the worst. Concomitantly, freedom of the press and lack of transparency are other areas of a dreary standing. Clearly there is a positive correlation between the countrys corruption, lack of democracy and freedom of the press, and lack of economic freedom as measured by the EFW index. The strongest correlation (0.91) exists between corruption and the EFW followed by the stability index (0.62), which is a composite index. Even though the points of data are few, and thus this is hardly robust, corruption that derails the whole system of exchange in an economy is the single most important contributor to lack of economic freedom. Corruption, however, is in itself a product of the

The Arab Opinion Project: The Arab Opinion Index:


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institutions that espouse and feed it, which also supports the view expressed in Why Nations Fail. The link is not apparent in some countries, as some endowed with an abundance of natural resources can compensate for inefficiency and mediocrity with rent. For instance, Algeria, being an oil exporter, can compensate for other deficits or ameliorate hardships through oil revenue. The same can be said for the oil economies of the Arab Gulf. Non-oil economies, if not aided by benevolent neighbors and friends from within and outside the region, could suffer tremendously and be subject to upheavals. The so-called oil curse, while harmful to development according to the views of some, proved a boon for some regimes as they were able to nip the Arab Spring in the bud before full bloom, literally with massive financial bequeaths.

Enter the Arab Spring Renaissance1

At the outset it may be of interest to note that while many refer to the Arab Renaissance as the Arab Spring, few know that the expression was around much earlier. In fact, the expression was not born with the uprising in Tunisia it was originally coined after the U.S. led invasion of Iraq in 2003 to represent and the blossoming of democracy in Iraq and the Arab world upon the toppling of the Saddam Hussein regime.2 The following is a brief review of Arab Renaissance reactions in Arab states. The material presented in this section is collected from various news sources, including newspapers, media outlets and blogs.

This section draws heavily from previous research by the author: Did the Arab Spring Benefit Economic Freedom in Jordan? Friedrich Naumann Foundation (forthcoming).

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The events referred to as the Arab Spring were ignited by the frustrations of a Tunisian man, Mohammed Bouazizi, who was prevented from running a vegetable stand and reportedly humiliated by a police officer when he requested a permit to operate his stand.1 On 17 December 2010, he self-immolated in dismay at the lack of economic freedom afforded to him by the Tunisian bureaucracy. Social networks such as Facebook and Twitter, and satellite TV stations, which were better trusted than official sources, spread the image throughout the region of the man burning an image that ignited the fervor of Tunisians. Demonstrations against President Zine El-Abidine Ben Ali erupted on 18 December 2010 and lasted until he relinquished power on 14 January 2011. The success of the wave of resistance in Tunisia inspired others throughout the MENA region to march against corrupt Arab governments.

The first demonstrations took place on 25 January 2011, beginning first with labor strikes and acts of civil disobedience. Soon President Hosni Mubarak faced millions of protestors from a variety of socio-economic and religious backgrounds united under the common goal to overthrow his government. Under pressure from continued domestic unrest and international scrutiny, Mubarak resigned as president 11 February 2011, leaving Egypt to be governed by a military council until a legitimate government could be established. A 30-year presidency was terminated and the stage set for democratic reform to take place.2 Mohamed Morsi was elected in July 2012 by a tight margin and amidst controversy that his contender Ahmed Shafiq had actually
1 2,9171,2044723,00.html


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won the elections. Reform remains pressing and needs to be taken forward.

On 16 February 2011, Libyan protestors clashed with police in Benghazi after a human rights activist was arrested. From there, the country plunged into a civil war between rebels and Muammar Gaddafis military. Gaddafi used his stockpile of weapons against the Libyan population, leading to death tolls in the thousands. On 17 March, UN Security Council Resolution 1973 was passed, creating a no-fly zone over Libya. Two days later a coalition force of France, the United Kingdom, and the United States began a bombing campaign against pro-Gaddafi forces. By late August 2011, with international support, rebel forces stormed Tripoli forcing Gaddafi to flee. Rebel forces found him soon after, and on 20 October 2011 killed Gaddafi. Libya now has a new government.1

Gaddafis armed response to protests was similar to that of Syrias president, Bashar Al-Assad. Protests in Syria first began 26 January 2011 when a police officer assaulted a man in Old Damascus. However, massive resistance did not begin until 6 March when Syrian security forces arrested 15 children for writing slogans against the Baathist regime. Thousands of protestors took to the streets all over Syria and soon the regime began to take measures to control the protestors, arresting thousands. By 31 July 2011, Syrian army tanks were being deployed against the armed Syrian opposition known as the Free Syrian Army (FSA). The fighting still continues and in the opinion of the UN, Syria has entered a period of civil war. As of February 2013, the UN estimated that 70,000 people had already been killed, many more


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injured, and hundreds of thousands displaced or have become refugees. Jordan alone hosts over one million Syrians, including close to 500,000 refugees. The situation continues to look grave for Syrians as new developments unfold daily.

In Yemen, President Ali Abdullah Saleh also faced a large-scale popular uprising. As unrest was increasing in the spring of 2011, the Gulf Cooperation Council (GCC) drafted a plan for Saleh to cede power in exchange for immunity from any legal action. On 3 June 2011, Saleh was badly injured in an assassination attempt and taken to Saudi Arabia for immediate medical attention while his vice president, Abd Al-Rab Mansur Al-Hadi, continued Salehs response against demonstrating Yemenis. After returning to Yemen in September 2011, Saleh signed the GCC initiative, due to international and domestic pressure, transferring power in November to his vice-president. Limited presidential elections were held 21 February 2012, in which Al-Hadi took 99.8 percent of the vote as the only running candidate. On 27 February, Saleh officially transferred power to Al-Hadi ending his 33-year reign over the country.1

Bahrain was another country where the fervor of the Arab Spring made itself apparent among the populace. Protests began 14 February 2011 and were meant to achieve greater political freedom while creating awareness about human rights violations. These protests were not originally intended to threaten the monarch, until
1 2 All material on GCC countries is obtained from: Abdullah, Abdulkhaleq, Repercussions of the Arab Spring on the GCC States, Doha Institute, 17 May 2012.


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17 February when a police raid killed four protestors. The next day army forces opened fire on protestors and the demonstrators soon sought an end to the monarchy. Saudi-led GCC forces were sent to Bahrain to quell the protestors as numbers were reaching 100,000 at Pearl Square in Manama. On 15 March 2011, King Hamad bin Isa Al-Khalifa issued a three-month state of emergency and turned to the military to reassert control over the country. The state of emergency was lifted in June; however, both protests and human rights violations continued. Although major demonstrations have ceased, the government refuses entry to international human rights groups or news organizations.

Peaceful demonstrations erupted 17 January 2011 in several Omani cities. They eventually stopped in May 2011. The government responded by changing a third of the cabinet, hiring 50,000 young unemployed Omanis, forming a constitutional committee, and pledging to address unemployment and corruption.

Saudi Arabia
Although several calls for protests were made, Saudi Arabia avoided mass protests mainly due to several government decisions made in response to regional and internal demands for reform. Swift royal decrees costing an estimated $130 billion were issued 18 February 2011 including: an increase in pay in the public sector, a grant equaling a two-month salary for all civil, military and state employees, monthly salary disbursements for the unemployed, twomonth salary bonus for all students in public education, establishment of a minimum wage for the public sector, increasing the housing loans limit to $130,000, building 500,000 new housing units across the country, and 60,000 new positions created in the Ministry of Interior.

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Although considered to be the most democratic of GCC countries, several protests took place in Kuwait calling for the overthrow of the government and demanding a constitutional monarchy. The government responded by disbursing a grant of $3,400 to every citizen as well as a food subsidy for all families in Kuwait for one year. Despite these efforts, the cabinet was forced to resign in November 2011 and new elections were held that led to a majority win for the former opposition.

Qatar is considered to have gained tremendously from the Arab Spring. It became a regional political power in the last two years by increasing its influence across the region through its sovereign wealth and media. The Doha-based Al-Jazeera news network was seen by many as the de facto network of the Arab Spring, taking the side of many revolutions occurring across the region.

United Arab Emirates

The sole reform demand in the UAE came in the form of a polite letter, signed by 133 national figures, asking the president of the union to expand the authorities of the appointed National Federal Council, which has moderate consultative attributions. The UAE benefited from the onset of the Arab Spring as the Emirates were viewed as safe havens for corporations and businesses operating in the region. The Emirate of Dubais financial position improved tremendously in the wake of the Arab Spring, after it was detrimentally affected by the international financial crisis of 2008/09.


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Morocco faced its first demonstration on 20 February 2011, in which between 150,000-200,000 took part. This demonstration was organized through the social network Facebook by a youth group calling itself February 20th. Many of those partaking in the demonstrations were young, urban middle class and educated; interestingly, many of the political parties refrained from participating. Demonstrations continued for months but began to wane in strength and numbers after a constitutional referendum was introduced and parliamentary elections were expedited. The king vowed to give up powers to appoint government cabinets, but kept control of the army and security forces.

Jordanians, having witnessed the change in Tunisia and Egypt, desired democratic political reform as well, and so took to the streets 14 January 2011, demanding the removal of Prime Minister Samir Rifai.2 On 1 February 2011, King Abdullah II announced the dismissal of Rifai and replaced him with Marouf Al-Bakhit, a former prime minister and army general.3 The king in 2011 also announced a $500 million package of price cuts in fuel and necessary goods and gave civil servants and military employees a salary increase.4 In June 2011, commemorating 12 years on the throne, the king said he would relinquish his right to appoint prime ministers and cabinets and would leave it to the elected parliamentary majority to form future governments. He also announced that there would be more reform in the future, including new election and political party laws.
1 2 3 4

Barany, Zoltan, The Arab Spring in the Kingdoms, Arab Center for Research and Policy Studies, September 2012. Index of Economic Freedom, 2012. Zoltan, The Arab Spring in the Kingdoms.

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On 24 October 2011, the king appointed Awn Khasawneh to head his new government and introduced 30 new cabinet members that were considered moderates, tribal politicians, and technocrats. Demonstrations remained constant. The slow pace of reform by the Khasawneh government was viewed as the cause for popular criticism. On 26 April 2012, Khasawneh submitted his resignation, after only six months in office. The king announced Fayez Tarawneh as the new premier, the fourth prime minister since the beginning of 2011. Aid from countries like Saudi Arabia (amounting to $1.4 billion in 2011), which helped to alleviate the budget deficit, was not offered again in 2012.1 On 10 October 2012, Tarawneh resigned and Abdullah Nsour was appointed as prime minister. Jordan conducted national elections on 23 January 2013, under a new elections law that allowed voters two votes: one vote for the local district and the other at a national level, given to a list/party.2 Only 36 percent of all eligible voters participated.3

Economic freedom and the Arab Spring

Table 2 below summarizes Arab countries rankings in economic freedom and reactions to the Arab Renaissance. Nothing indicates that very little happened within the country; High means regime change.

1 2 3 Al Rai newspaper, 1518 candidates for elections 2013, 25 December 2013. Alarab Alyawm newspaper, national teams report on the course of the 2013 parliamentary elections. Lang=1&Site_ID=2


Bridging the Gap Table 2. Economic freedom: Arab world ranking

Country Bahrain Egypt Jordan Kuwait Morocco Oman Syria Tunisia UAE Algeria Lebanon Qatar Saudi Arabia Yemen

2002 1 13 7 3 10 4 14 10 4 15 6 2 8 9

2003 1 13 7 3 11 3 14 11 3 14 6 1 8 8

2004 1 11 7 3 10 3 14 13 5 15 5 1 8 9

2005 1 10 5 3 11 6 15 11 3 14 7 1 8 8

2006 1 10 5 3 12 3 15 10 2 14 7 5 9 7

2007 1 10 4 2 12 7 14 11 3 15 4 4 9 8

2008 1 10 3 3 15 3 16 10 2 17 7 3 7 7

2009 1 12 8 3 14 4 16 10 2 17 6 4 8 6

2010 1 12 3 4 14 5 15 10 1 17 5 7 8 9

Reaction Medium-High High Medium Medium Mild Nothing High High Nothing Nothing Med Nothing Mild High

Source: Economic Freedom of the Arab World, Annual Report 2012 (Note: the lower the number, the more free).

Note that ranking alone does not provide a strong correlation to the impact of the Arab Renaissance on a given country. Several other factors come into play, such as natural resource endowments and whether the country borders Israel or not (which highly affects how the international community perceives the turmoil), among others.

It is too early to determine whether the Arab Renaissance brought with it economic freedom or not. However, empirically, several indicative observations can be made.

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1. One can easily observe that in the case of the oil rich countries, the response was greater spending by the government with extremely mild overtures towards better governance. In such a case, one could argue that increasing the size of government in itself is indication that economic freedom was being derogated. In non-oil economies, such as Jordan, aid poured in. In 2012, with a GDP of $30 billion, Jordan received $3 billion in aid. Still, the aid helped calm the situation and averted turmoil. 2. There is a sharing of power with the Muslim Brotherhood in some cases. Many Arab countries are facing a combination of output contractions, severe fiscal constraints and almost collapsed monetary systems. Iraq is witnessing rising sectarian strife and, together with Yemen, possible state disintegration. In Libya, the south is lawless, and Syria remains a winless bloody match that could culminate in state dismantlement. In Jordan, fear of neighbor-like violence and instability has quelled outcries for reform, but this is only temporary. And Bahrain is still fragile as social demands are recognized to have been only temporarily suppressed.1 3. There are short-term pains everywhere, some due to adjustments that are thrust upon systems with weak institutional set ups, and some because exiting from rentierism into merit-based, free market systems will require time. The majority of Arab states are classified as rentier states, where the rent seeker extracts value from the labor and activities of others not necessarily for being the best or most competent at what he or she does, or provides, but because of a certain status or privilege such as birthright (clan, tribe, place of birth, family name, title, etc.), affiliation with an autocratic ruler or government (cronyism), or having access to resources (such as

Obaid, Nawaf, The Long Hot Arab Summer: Viability of the Nation-State System in the Arab World, Harvard Kennedy School, Belfer Center, March 2013. 0Summer.pdf


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permits and licenses) that otherwise could not normally be achieved or acquired due to limitations or controls.1 Note that a rentier state does not need to be endowed with natural resources but instead leverages political or positional rights to seek rent from other states or institutions.2 Thus rentier states, like individuals, need not be holders of oil resources to be labeled as rent seekers. They can trade certain location-associated advantages or political positions for aid and external resources, which become their rent. Rentier states, in their search for rent, become dependent on aid and can barter certain privileges and rights for aid, just as the resource-rich sell the wealth of the land for external rent. 4. Arab countries that are heavily dependent on aid are rentier states.3 Such rentierism enables the state to hinder or disregard the development of civil society and democracy; not because it is necessarily opposed to such developmental processes, but simply because it does not require such aspects to survive. This is due to government deficits being supplemented by donors. In turn, this leads to such states ignoring issues such as competitiveness, or working wholeheartedly to achieve competitiveness, simply because it is not necessary. It is possible that such states dependent on external flows that emerge not from what they do but because of who or where they are seek foreign direct investment (FDI) as another source of rentierism. Yet rentier economies are vulnerable as they are dependent on foreign aid, which could decrease or be disrupted. However, not all FDI will benefit such states: some FDI inflows will increase income disparities and create in a rent seeking economy even greater income and wealth inequity, which may lead to an increase in the risk of civil strife. Hence, states must ensure that FDI and aid inflows are equitably distributed. However, it is doubtful

2 3

Beblawi, Hazem, The Rentier State in the Arab World, in Giacomo Luciani (Ed.) The Arab State (Berkeley: University of California Press, 1990). Ibid. Ibid.

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that given the nature of governance found throughout the region equity will ever be achieved. Finally, it took Europe several centuries from the day of the Magna Carta in 1215 to emerge in its present form. Exiting present doldrums and entering into a new democratic Arab world will be painful and not without peril; borders may be redrawn, and states may collapse.1 It seems that with some rulers holding unto their fiefdoms with all their military might, the road will be travelled at full cost.


Bridging the Gap

Bridging the Gap


Economic freedom and institutional change: European experiences and Arab realities
Andrzej Kondratowicz
In this article I will concentrate on some basic ideas and concepts related to economic freedom, rather than on measures and resulting international rankings. Measures are important. In explaining the importance of economic freedom it is crucial to be able to use quantitative evidence on top of qualitative analysis. As we know, measures of economic freedom exist. They were created after a series of academic conferences organized by the Fraser Institute of Vancouver, Canada, in the second part of the 1980s. As a result of academic discussions among several top world scholars, including contributions from Nobel Prize winners in economics Milton Friedman, James Buchanan, Douglass North and Gary Becker, an aggregate measure of economic freedom was developed. Today, after over 30 years, this measure known as the Economic Freedom Index is widely used by academics and laymen alike. Actually, we have now two somewhat competing measures: one is published by the Fraser Institute, the other by the Heritage Foundation. Due to some methodological arguments, the academic world generally prefers the former, while the media and laymen often stick to the latter. The resulting rankings do not differ much. Nevertheless, our research shows that there is a statistically significant difference between the two sets of data. This becomes important if one conducts more sophisticated formal econometric studies, using the indices as inputs, and this is why I lean towards using the Fraser Institute dataset.


Bridging the Gap

The Economic Freedom Index: What it really measures

It is good to know the data. Much of it is included in Yusuf Mansurs paper, published in this volume. Therefore, here, we will offer only a brief look at the overall levels of economic freedom in Arab countries over the past 25 years, as well as an outlook for the next 10 years (see below). For an easy comparison we will also present Economic Freedom Index (EFI) values for some other countries and their groupings, as they stand now. But before we turn to the numbers, it is important to clearly explain what they really measure. EFI is a generalized index of characteristics of the institutional matrix, as Douglass North, the father of the New Institutional Economics, puts it.1 In simple terms, economic freedom reflects the institutional setup of an economy. Changes in EFI values reflect institutional changes those that are slow, spontaneous and evolutionary in character, and those that can be described as man made or designed reforms. In a word, EFI rankings are not just beauty contests in which countries want to gain the highest possible position; they are a much more serious matter, telling us how robust the institutional skeleton of the economy is. As we know from modern economic literature, institutions are one of the principal factors accounting for differences in economic growth and prosperity among the nations.

North defines institutions as rules, enforcement characteristics of rules, and norms of behavior that structure repeated human interaction (1990). Although there are many other definitions around, this one seems to be the most popular. Its appeal also lies in its compactness.

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Table 1. EFI (Fraser), unadjusted summary index values for selected countries or country groupings in 2010*
Country/group of countries Hong Kong (worlds leader) United States G7 average Old EU average (EU15) European Union average (EU27) Poland Ex-Communist Europe average (ex-CE14) Arab countries average (A11) Worlds average (W144) Egypt EFI value 8.90 7.69 7.52 7.42 7.38 7.31 7.10 6.84 6.82 6.49 Rank (of 144) 1 18 31 35 40 48 62 79 80 99 Percentile 100% 88% 79% 76% 73% 67% 57% 45% 45% 31%

* EU27 = European Union (without Croatia); EU15 = old Union, pre-2004 EastEuropean accessions; exCE14 = 14 ex-Communist European countries without Bosnia and Herzegovina, Macedonia, Moldova, Montenegro and Serbia; A11 = Arab countries without Mauretania, Qatar, Saudi Arabia, Sudan omissions due to lack of reliable data. Shaded area gives ranks and percentiles of a suppository country with the EFI value equal to the groups average. Source: Authors calculations based on Gwartney, Hall and Lawson (2012).

As you can see from Table 1, the Arab countries average (A11) in 2010 was equal to the worlds average and was not much lower than the ex-Communist Europe average. Nevertheless, the A11 average is highly influenced by high scores of the Arab Gulf countries positions of the other Arab countries are much lower. Egypts scoring of 6.49 was in the 99th position (31 percent percent of countries had a lower or equal score). It is worth observing that old Europe (EU15), which is frequently accused of being overlybureaucratic and statist, still has a EFI score higher than the exCommunist countries, although some of the latter are catching up (e.g., Polands score).


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Table 2 and Graph 1 depict dynamics of the EFI1 for the period 1985-2010. Generally, the historical trends have been somewhat encouraging, but it should be remembered that on average economic freedom was on the rise in the whole world, as well. Also added is a 10-year forecast. As is known, forecasting macroeconomic parameters is a tricky business in this case it is even more so, since we are trying to foresee changes in the institutional setup of economies that in other forecasts is frequently held constant. Our forecasts are purely datadriven and do not model any exogenous shocks to institutions especially abrupt political ones, like the Arab Spring upheavals. It will be interesting to verify these forecasts in due time. This subject brings us to the point where we should look more thoroughly at the changes in institutional setup, be they revolutionary or evolutionary.
Table 2. EFI (Fraser), chained summary index values for 11 Arab countries, 1985-2010 (Data: D) and 2015-2020 (Forecasts: F). Countries ordered from left to right by their 2010 EFI values (shaded).
Morocco Bahrain Egypt Tunisia Algeria 3 .60 3 .43 4 .06 4 .66 5 .25 4 .88 4 .90 4 .90 Kuwait Chad 5 .00 5 .00 4 .96 5 .40 5 .30 5 .64 5 .76 5 .76 Jordan Oman Syria 3 .07 3 .53 4 .23 4 .92 5 .46 5 .53 5 .68 5 .78 UAE 6 .83 7 .20 6 .95 7 .28 7 .50 7 .61 7 .64 7 .67

Year 1985 1990 1995 2000 2005 2010 2015 2020 D D D D D D F F

6 .78 6 .34 6 .99 7 .53 7 .39 8 .00 8 .46 8 .63

6 .92 6 .91 7 .21 7 .74 7 .39 7 .89 7 .96 7 .96

6 .85 5 .46 6 .93 7 .07 7 .46 7 .75 7 .81 7 .82

5 .71 5 .81 6 .45 7 .40 7 .61 7 .61 7 .44 7 .44

4 .86 4 .60 5 .99 6 .81 6 .59 6 .78 6 .91 6 .95

5 .20 5 .18 6 .28 6 .14 6 .37 6 .36 6 .41 6 .44

4 .60 5 .32 5 .73 6 .08 6 .02 6 .21 6 .10 6 .06

Source: Data from the Fraser Institute Economic Freedom database (; forecasts calculated by the author using EFI data and applying an exponential smoothing model with a damped trend, without seasonality, with a 10-year perspective.

Here we use the so-called chained index, which is why the EFI values for 2010 for Egypt differ from the values given in Table 2 (unadjusted). The latter is used for static cross-sectional comparisons; the former for timeseries analysis. Values may differ, though they do not have to.

Bridging the Gap


Graph 1. EFI (Fraser), chained summary index values for 11 Arab countries, 1985-2010 (Data\: D) and 2015-2020 (Forecasts: F) on a <0; 10> continuous scale. The legend shows countries in descending order by their 2010 EFI values.

Source: Table 2.

Spontaneous, incremental change versus fast, designed reform

Spontaneous changes in human institutions were the center of attention of Friedrich von Hayek and Milton Friedman. Today, many economists and game theorists follow that path e.g., Masahiko Aoki or Samuel Bowles. On the other hand, the reformby-design approach may be to a large extent attributed to the German economist Walter Eucken, the father of the Ordoliberal School. Although we cherish the Hayek-Friedman approach very much, Euckens approach has a lot of appeal as well. Why? Because in social and political reality sometimes we cannot wait long and we


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have to design reforms and institutions quickly. This is exactly the present day reality of Egypt and many other Arab countries. It must be added that the realities and exigencies of the East and Central European countries were the same when the communist system started to collapse first in Poland in 1989 and soon after in other countries of the region, including the Soviet Union itself. The old system and its institutions were ceasing to function and new ones had to designed and quickly implemented. In Poland, they took the shape of the so-called Balcerowicz Plan a comprehensive package of bold economic reforms named after the then-deputy prime minister who was a leading force behind the plan. Not everybody at that time agreed that the changes should be so deep and quick. Many preferred a gradual reform approach. History proved that the hard Polish landing though risky was a good choice. Incidentally, two things must be mentioned in the context of the East European experience in the 1990s. First, the successful peaceful transition of power in 1989 between the communists and the Solidarity movement in Poland was not the first attempt to change the oppressive regime in Poland. But for the first time it was complete. Poles rebelled against the government before: in 1956, 1968, 1970-71, 1976 and in 1981 (when martial law was introduced and Solidarity crashed). So did some other nations in the region under Soviet domination. Many of those previous rebellions ended with bloodshed. Thus, the success of 1989 may be seen as a result of cumulative historical changes, and it was the ultimate fruit of a long struggle. As much as it may sound pessimistic, not always is once enough to change the face of an oppressive regime, a country, its society and its economy. Second, as the British historian Timothy Garton-Ash has pointed out, the changes in Eastern Europe were refolutions rather than revolutions modeled after the French one (1789). A refolution is a reform plus evolution and, most often, includes an element of peaceful transfer of power between the ancien rgime

Bridging the Gap


and the new one. But, as we have already observed, in Poland and some other countries the changes were quick rather than evolutionary. So was Garton-Ash right? And also: Is it possible to have a refolution in Arab countries? In Syria, as we see, not. Perhaps in Egypt?

Formal and informal institutions: societal values and religion

This brings us to the point of differentiating between so-called formal and informal institutions. The former are rules and enforcement mechanisms of rules in Norths definition. The latter are norms the ways we do things because of tradition, religion and culture. There is a tension between the two kinds of institutions; sometimes they are competing, sometimes complementary, accommodating or substitutive.1 Most scholars are of the opinion that informal institutions are slow to change and they lag behind reform or spontaneous changes of formal ones. This is not always true. At times informal institutions change fast, as well. This is a point of crucial importance. If informal institutions are not catching up with reform, then social tensions grow and reforms become endangered. Were informal institutions in Poland and other East European countries changing fast? How was it possible? Is it possible in Egypt and in other Arab countries now? As I explained above, informal institutions are a reflection of the culture and social values predominant in society. What are the popularly supported values in Europe and in the Arab world? Are they conducive to economic development through markets? Are they supportive of capitalist institutions? How was it possible that Polish society embraced market-oriented, pro-capitalist reforms after almost half a century of the collectivist state with its anti-market institutions and communist propaganda? Are the cultural, social and religious values and norms the same in the whole of Europe?

Those four types of relations between formal and informal institutions are thoroughly analyzed by Helmke and Levitsky (2004, p. 728).


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Let us begin with the differences in values underlying informal institutions. These values are the subject of a broad-based study called the World Values Survey (WVS), conducted since 1981 in cooperation with the European Values Study (EVS) and supported by an international network of research institutes. All in all, they have encompassed 97 countries and 88 percent of the worlds population. WVS and EVS measure societal values in 10 areas: religion, gender, work motivation, democracy, governance, social capital, political participation, tolerance vis--vis others, environmental protection, and subjectively felt well-being. Many of these traits turn out to be pairwise correlated, thus it is possible to collapse them into two dimensions 1) traditional/secular-rational; and 2) survival/self-expression and to portray them on one two-dimensional graph. It has been done by the two leading researchers of the WVS: the product is called from their names the Inglehart-Welzel cultural map of the world (see Graph 2 below). The first dimension gives us the contrast between societies where religion is very important and those in which it is not. The second one reflects the contrast between survival and selfexpression values, which becomes profound when industrial societies transform into post-industrial ones. In these societies, priorities shift from emphasis on economic and physical security towards an increasing emphasis on subjective well-being, selfexpression and quality of life.1 Societal values (informal institutions) drift over time, as showed on two maps characterizing the years 1994-2004 and 2005-2008. They are to a large extent self-explanatory, thus a very short note will suffice. On the first panel, the ex-communist countries are showed as a group they were coming out of the same Sovietdominated past, but the official collectivist values were not shared by society (informal institutions did not conform with them). As a result, shortly after the old regime collapse not much was left of this seeming commonality, and on the second panel the authors do not

Description based on Inglehart and Welzel (2010), where you can find more details.

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even show it: a much deeper historical heritage came back to the surface. Often it means that deeply embedded religious fundamentals become a visible determinant of the countrys position on the map. On the second panel, the authors show two new continents: Islam (25 percent of the worlds population) and Eastern-Orthodox Christianity. Somewhat paradoxically, modernization and economic progress generate two divergent outcomes: higher living standards decrease religiosity, while increasing cultural diversity and societies openness increases it. The Arab countries are located in the left bottom corner of the map; interestingly, Poland is also very traditional in terms of values. It is culturally close to India, Malaysia and Turkey, and not that far from the Arab countries. Yet the Polish economy is a symbol of a successful transition and lasting success in recent years. Thus, traditional values are not in opposition to economic growth. The Irish and the U.S. societies are strongly traditional, too. If you consider Protestant societies, their present position is in the northeast corner of the map, but when they were growing the most during the industrial revolution and after they were at times extremely traditional. Sadly, tolerance and cultural openness often come late on the historical journey to prosperity. And it does not come easily and by itself. The Europeans know it well.


Bridging the Gap

Graph 2. Inglehart-Welzel cultural map of the world: 1999-2004 (lefthand panel); 2005-2008 (right-hand panel).

Source: Inglehart and Welzel (2005), p. 63; (2010) p. 554.

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Let us also note that religion-based traditional values may differ. After all, different religions and their sub-varieties may have varying influence on the economic and social behavior of the faithful. Let us look at the European Christian tradition. Indeed, it has long been noticed and recognized especially since the seminal work of German sociologist Max Weber (1904/5) that the Protestant ethic is conducive to economic growth under capitalism. Catholic tradition less, and Eastern Orthodox much less. Delving deeper into this subject would go beyond the limits of this paper, thus I will give only one example. Analyzing various causes of success of the early phases of postcommunist transformation in some countries of Eastern Europe, and the defeats in others, the Polish economist Jan Winiecki (Winiecki, Benacek and Laki, 2004, pp. 39-77) pointed to the role of newly created small and medium-sized private enterprises (SMEs). In those countries where there was a massive wave of start-ups, the transition from so-called transformational recession to transformation recovery was rather fast. The necessary (though not sufficient) condition for that was the widespread presence of an entrepreneurial spirit in society. It was more often encountered in the Baltic States, Poland, the Czech and Slovak republics, Hungary and Slovenia than in Russia, Belarus, Ukraine, Bulgaria, Romania, Moldova or Serbia. But this divide coincides with the historical divide between the Western and Eastern Christendom. Graph 3 shows a map of this division in the 16th century, but many would argue it could be traced back to the 6th century as well. Winiecki argues that these divisions are still reflected in todays entrepreneurial spirit and work ethics, thus they influence economic outcomes. In the context of the Arab world, the question is to what extent Islam and its particular schools and branches are conducive to or at least compatible with exigencies of modern economic organization and international cooperation in the era of globalization? This is a question to be considered by other papers in the volume.


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Graph 3. East-Central Europe: Countries embarking on economic transformation in the 1990s and the continental division into Western and Eastern Christendom in the 16the century (maps show contemporary national boundaries).

Source: Winiecki, Benacek and Laki (2004), pp. 66-67.

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The above may be considered bad news for those economies where predominant religion is not conducive to hard work ethics and discipline, along with entrepreneurial behavior. The good news is, though, that societies learn from others and adopt new ways of behavior which may speed up the process of social change substantially. Apart from that, there are two other mechanisms that may substantially speed up the process of adopting new (economic) institutions. One is when a powerful shock is hitting society and its source is internal. It may take a form of a revolution or a refolution like those in Eastern Europe in the 1990s or in the Arab world nowadays. The old rules are abolished and since society cannot live in an institutional vacuum, new laws are quickly drawn up. Thus, new formal institutions are designed and implemented. Two paramount questions are: What will these new institutions be? And will society at large accept them as being in accord with prevailing values? Here we return to the Polish example: after the collapse of the communist regime, society quickly adopted new pro-market (in essence capitalist) economic institutions. The reforms were fast and deep. By adopting them, Poles were coming back to their old values that remained dormant during the long communist night. But these values were there. And although many Poles later on became disenchanted with capitalism and its not always easy ways, at the moment of change, and immediately thereafter, support for promarket reforms and the willingness to incur short and medium run sacrifices was predominant. And the Church was supporting it, as well. In terms of the formal-informal institutions connection, all this means that informal institutions were by-and-large in accord with new formal institutions. This was crucial to get things rolling in the direction of economic growth and prosperity. There were countries, though, where the reforms stopped short of achieving this critical mass and momentum. Russia itself, Ukraine, Belarus and a score of former Asian Soviet republics. Their new institutions turned into


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Olsonian redistributive coalitions (Olson, 1982), and state institutions were captured by interest groups. There is always a threat of that. There is another possibility that I will mention only briefly. An external force is imposing new sets of political and economic institutions on a nation. This happens after wars or foreign military interventions. To some extent, it happened in the aftermath of World War II in Bizonia (West Germany) and Japan. It repeated in South Korea. It did not repeat in Iraq. There are other, less known examples of both successes and failures of this mechanism of institutional change. Generally it seems that successes are coupled ether with unchaining old and dormant societal values or with socalled tipping-over mechanism. An informal institution continues to exist, but the way people perceive it undergoes a slow change. The change of attitude towards this informal institution remains latent until some particular fact or phenomenon not necessarily powerful in itself tips the equilibrium over. As a result a new informal institution gains a dominant position and quickly replaces the old one. But this, again, is based on new values that a society is ready to accept. This brings us back to the cultural values of particular societies.

What to do when society is split on core values ?

All the above arguments implicitly assume that values may differ among societies, but that each society is internally homogenous. One society, one set of coherent values at least in crucial moments of history, when the future fate of the nation is decided upon. But what if a society is split on the issue of values to adhere to? Different segments of society may have different internalized sets of values and as a consequence differing views on the institutional order that should be implemented. One unpleasant possibility is a growing social conflict with all the known negative consequences, including overall economic decline. Another is an effort at mitigating conflict by negotiations.

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What could be the basis for negotiations if values are different? An interesting proposal comes from a not widely known American political scientist, legal scholar and philosopher, Bruce Ackerman (1980). He argues that social and political discourse cannot be based on values and sentiments. If the parties start negotiations from positions of being the only depositories of truth, and exponents of the only genuine values in society (especially if based on religious beliefs), then there is no room for compromise. Thus, the parties should start from agreeing on procedural rules. These rules should be based on the adoption of the principles of rationalism and neutralism in discussion. This pertains to parliamentary debates and to any other political forums. We can only add that this all remains within the tradition of Western liberal democracy, in which rights of minorities in terms of any of the values mentioned in the context of the InglehartWelzel cultural map of the world are recognized and protected. One can only hope that this is the path that will be chosen in Egypt and other Arab nations. Otherwise these countries may fall into the trap named by some political scientists as an anocratic political regime, or just anocracy.1 This is a regime that exhibits mixed features of democracy and autocracy a combination that makes it virtually impossible to run the country efficiently, both in political and economic terms. Democracies have their problems, but some of their features may be highly relevant to solving important problems that may arise in Egypt and other Arab countries in the short and medium run. For lack of space, I will just briefly enumerate them. Democracy as a reasonable insurance against a malevolent despot possibility.

This is the term used in the POLITY IV Project measuring democratic and autocratic features of countries. See: Marshall and Cole (2011) and Marshall, Jaggers and Gurr (2011). Dimitrios Katsoudas indicated to me the inappropriateness of the term: it should be acracy (Greek akratia).


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Democracies are never at war with one another (for evidence, see: Weart, 2000) Democracies provide mechanisms of limiting violence, and for internal conflict resolution, within society. North, Wallis and Weingast (2009) talk in this context about socalled open versus limited access societies. In limited access societies, privileged groups act as violence limiting agents, but at the same time they hinder economic and political development. Like in Egypt under Mubarak, or in Libya under Gaddafi. Open access societies create popular access to institutions/organizations that control violence and at the same time foster economic and political development. The relevance to the Arab world is obvious. One final question: Can economic freedom contribute to adopting such liberal-democratic and political freedom-oriented solutions? There is a lot of evidence to support an affirmative answer. This is what is known as the Hayek-Friedman Hypothesis. In light of the above on the relevance of Euckens Ordoliberal thinking on issues of institutional change, I would suggest calling it the Eucken-Hayek-Friedman Hypothesis. It states that in the long run economic freedom enhances political freedom. That is why it is worth studying, and measuring as well.

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Ackerman, Bruce, Social Justice in the Liberal State (New Haven: Yale University Press, 1980). Aoki, Masahiko, Endogenizing Institutions and Institutional Changes, Journal of Institutional Economics, Vol. 3, No. 1 (2007), pp. 1-31. Accessed 3 March 2013: Bowles, Samuel, Microeconomics: Behavior, Institutions and Evolution (New York and Princeton: Russell Sage Foundation and Princeton University Press, 2004). Eucken, Walter, Die Grundlagen der Nationalkonomie (Jena: Gustav Fischer, 1940). [English translation: Eucken, Walter, The Foundations of Economics: History and Theory in the Analysis of Economic Reality (London: William Hodge & Company, 1950)] Friedman, Milton, Capitalism and Freedom (Chicago: University of Chicago Press, 1962). Garton Ash, Timothy, The Magic Lantern: The Revolution of 89 witnessed in Warsaw, Budapest, Berlin, and Prague (New York: Vintage Books/Random House, 1993). Garton Ash, Timothy, Velvet Revolution: The Prospects, The New York Review of Books, 3 December 2009. Accessed 9 June 2012: Gwartney, James, Robert Lawson and Joshua Hall, Economic Freedom of the World: 2012 Annual Report (Vancouver: Fraser Institute, 2012). Hayek, Friedrich von, Law, Legislation and Liberty, Volume II: The Mirage of Social Justice (London: Routledge & Kegan Paul, 1976). Helmke, Gretchen and Steven Levitsky, Informal Institutions and Comparative Politics: A Research Agenda, Perspectives on Politics, Vol. 2, No. 4 (2004), pp. 725-740.


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Inglehart, Ronald and Christian Welzel, Modernization, Cultural Change and Democracy (New York: Cambridge University Press, 2005). Inglehart, Ronald and Christian Welzel, Changing Mass Priorities: The Link Between Modernization and Democracy, Perspectives on Politics, Vol. 8, No. 2 (2010). Marshall, Monty and Benjamin Cole, Global Report 2011: Conflict, Governance, and State Fragility (Vienna, US: Center for Systemic Peace, 2011). Marshall, Monty, Keith Jaggers and Ted Gurr, POLITY IV Project. Political Regime Characteristics and Transitions 18002010. Dataset Users Manual, (Vienna, US: Center for Systemic Peace, 2011). Accessed 22 October 2012: North, Douglass, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 2010). North, Douglass, John Wallis and Barry Weingast, Violence and Social Orders: A Conceptual Framework for Understanding Recorded Human History (Cambridge: Cambridge University Press, 2009). Olson, Mancur, The Rise and Decline of Nations (New Haven: Yale University Press, 1982). Weart, Spencer, Never at War: Why Democracies Will Not Fight One Another (New Haven: Yale University Press, 2000). Weber, Max, Die protestantische Ethik und der Geist des Kapitalismus, Archiv fr Sozialwissenschaft und Sozialpolitik, 20: 1-54 and 21 (1904/05), pp. 1-110. [English translation: Weber, Max, The Protestant Ethic and the Spirit of Capitalism (London: Routledge Classics, 1930, 2001)] Winiecki, Jan, Vladimir Benacek and Mihaly Laki, The Private Sector After Communism: New Entrepreneurial Firms in Transition Economies (London and New York: Routledge, 2004).

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The role of religion in Arab politics and society

Mohammed Tamaldou
In order to effectively address the role of religion in politics and society in Arab countries it is necessary to clarify some concepts and clear up some confusion at the outset. Religion in the Arab world is Islam. Though there are number of other religions in the Arab world, with varying degrees of importance, all share a belonging to the Arab world and sometimes to Islamic civilization along with an Islamic component. All share in the political and social repercussions resulting from the nature of the relationship between Islam and politics, and between Islam and society, in addition to the relationship between Muslims and religious minorities. While questions on the rights of religious minorities have been raised, and solutions recommended so minorities are not governed by the religion of the majority, it is worth noting that the religious rights of non-Muslims have been always preserved. The Islamic state, for example, has recognized the rights of Jews, or the Sabians. Yet in trying to explain the concept of religion in the Arab world and the relationship between Islam and politics and Islam and society (and within this article there will not be enough room to discuss all aspects, despite the deep impact of religion-related concepts and visions on behavioral conduct), dilemmas remain. Among such dilemmas, one is the relationship between the religion of the majority and freedom of belief; another is raised when trying to formulate unified concepts of secularism and citizenship as two concepts that do not fundamentally encounter the tolerant values of Islam, besides being cornerstones for the comprehensive establishment of democracy. Add to that side


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dilemmas emerging from polarized mentalities, which can only interpret secularism as elimination of religion, citizenship as a threat to religious values, and liberalism as non-believing and moral decay let alone regarding anything that belongs to the West in an antagonizing manner, as the Arabs archenemy. Finally, we also have the dilemma of extremism and fundamentalism and conflicting Islamic currents a dilemma that impacts the destiny and being of the Arab and Islamic world, and greatly influences life inside Arab societies, given the highly respected status of the religious institution and the considerable role afforded to the religious jurist (or Fakih), the Guide, and the Imam of the mosque. Therefore, the struggle of today seems not only centered on the duality of modernism versus conservatism, but rather goes beyond this, including the struggle within and between Islamic currents whether moderates, radicals, jihadists, Salafists, or Sharia advocates in order to maintain their predominance in both the social and political scenes. It is no surprise that the question of credibility in handling democracy arises, particularly with groups that emerged recently as new players in this part of the world after the Arab Spring uprisings, and amid demands for dignity, democracy and freedom.

The complex nested structure of Arab society

In discussing Arab society, other, non-Arab components are necessarily involved, along with all the interactions related to their different and diverse belongings, be it belonging to ethnic or religious affiliations, or any other minority, and the relationship between such belongings and ensuring full rights for all Arab citizens. Indeed, the Arab world comprises a complex structure, where elements are nested, components overlapping, and ethnicities, sects and races are interwoven. Arab society is a dispersed entity, as if it emerged from a vast historical and demographic explosion, scattered in its parts everywhere. Tribes and clans are widespread throughout the whole Arab space, religious sects and groups pitted

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here and there, and ethnicities are everywhere whether Amazigh or Kurds or others. It is also unfortunate to face the utter lack of interest, whether by intellectuals and social analysts, or by politicians, in this exceptional structure of Arab society that can be regarded as an obstacle in the path to a modernized society unless the phenomenon is addressed and citizenship becomes the wider space that encompasses all particular belongings. Debates today are ongoing and heated on the civic state, or as some prefer to call it, the national democratic state. Again, one encounters political Islam and the necessity of understanding its meaning and functionality, and the degree of closeness or otherwise to universal human values the links between Islam as a divine message, and earthly matters of individuals enjoying free choices, and how far guarantees exist that engagement with establishing a modern state within the boundaries of the Arab world can comply with the principles of democracy, freedom and rotation of power amid attempts to Islamize the concepts and terms of modernism in general. Such attempts can be seen and understood as a part of a protectionist atmosphere that is no different in its results from economic protectionism. It is no surprise, then, that the Arab world is unique in its affiliation with its Arab origins or the Islamic religion, in comparison to the other worlds (especially the West) that define their affiliation to a greater extent geographically. Such affiliation on the part of the Arab world is not haphazard. It is structural, and it is a defensive, protectionist reaction that needs to be psychologically analyzed in depth in order to reveal its underlying causes.

Islam, politics and society: Are they inseparable ?

A question poses itself: Are Islam and politics and society necessarily inseparable elements? Considering politics the mechanism that regulates the relationship between the ruler and the ruled, according to agreed-upon positive (or man made) norms that help individuals to crystalize their own form of society as they wish


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it to be, and prefer to live within, and to contribute to its growth, what exactly is the role of Islam? Why is the Islamic world living in such polarization? And what is the reason for the insistence on making inseparable the relationship between religion and politics? At the outset, it is worth mentioning that the duality of religion and politics was registered as a phenomenon since the early times of the civilized experience of Islam. Politics, or power, has always tried to derive legitimacy from religion. Interpretation played the biggest role in this regard, with each group trying to manipulate the interpretation of religious text to find proper justifications for their political tendencies, and to enhance their own legitimacy. Islam, however, never legitimized, imposed or even recommended any particular form of governance or a certain regime, throughout the successive forms of governance known during the rule of the orthodox Caliphs after the death of the Prophet Mohammad (peace be upon him). Islamic society has always been preparing through the sequence of events to become an exemplary in coexistence and conformity with the updates of life and requirements of reality. Abu Bakr As-Seddiq received the pledge of allegiance after a long intense dispute at Saqifat Beni Saeida. The dispute ended with an agreement on two main principles: the first was weighing a balance of powers among the factions and tribes of society; the other was prioritizing the public interest. These two principles are part and parcel of the modern culture of democracy. Omar Ibn Al-Khattab was appointed through a different method, coming to power after a consultation made by the Caliph then Abu Bakr resulted in agreement to appoint Omar as Caliph. Omar, in turn, chose a different path when he decided to name six candidates from whom one would be picked as his successor. Thus, we have three models and three cases for coming to power and rotation of power, each of which adopts in one way or another the principle of consultation or Shura. Something different happened during the Caliphate of Othman Ibn Affan, which followed Omar Ibn Al-Khattab. This time witnessed the events of The Great Rebellion, regarded as the first political

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uprising in the history of Islamic rule. Caliph Othman who was advanced in age failed to respond to his peoples demands for reform. His hands were tied by a lobby that manipulated and directed him to fulfill their own interests. When people realized that Othmans kin had full control over their money, they demanded they be replaced, but Othman refused to respond. The agitation soared and the people demanded Othman step down. He refused and was murdered. At that time, there was no document or contract between the ruler and the ruled to define the term of the Caliph in office, the responsibilities of the Caliph, and the mechanisms for a transfer of power. Muslims recognized this problem early in the Islamic regime, yet they failed to anticipate its impact. This brief review of historical events suggests at least one conclusion: any attempt to bind religion and state, or religion and politics, or religion and governance in an inseparable duality should not by any means go beyond Islamic ethics. This term, as defined by the intellectual Mohammad Abed Al-Jabri in his book Religion, The State, and the Enforcement of Sharia, can be interpreted in three elements: consultation, or Shura, responsibility, and a third element that can be read in the Prophet Mohammads saying, You know better about your earthly matters. This Hadith provides that a space must exist between earthly matters and heavenly matters, or between the religion that governs the relationship between man and his or her God, and the earthly affairs that govern relations among people. Therefore, it is clear that earthly, civic and societal matters should be managed according to intellectual convictions and ethical tendencies. Management of such manners should also take place according to the priorities set by institutions and through representatives elected by the people to manage their public affairs, with legally binding terms and mechanisms that should produce representative and executive institutions through democracy and freedom of choice. This, simply, is the conclusion of all successive experiences in Arab countries governing systems since the death of the Prophet Mohammad (peace be upon him).


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The question remains: Why did the Arab Islamic state not find ways to achieve a modern renaissance in a way that guarantees conditions for sustainability and stability?

In search of an Arab renaissance

Has the Arab Islamic state ever undergone renaissance? Has it ever followed the modernism curve, at any given time? To answer the question, two principle points should be made. The first pertains to the meaning of the Arab Islamic state, and whether it applies to country borderlines, as defined by the classical definition of the state, or to imperial expansion, as was the case of the Ottoman Empire, for example. If applying the limited country concept, a very limited number underwent comprehensive and integrated renaissance. But applying the concept of imperial expansion, a genuine renaissance can be found in the history of Andalusia during the Abbasid Era, more exactly between the 9th and 13th centuries. At that time, the state expanded to reach the East Mediterranean, Africa, and central Asia. The economy boomed, trade flourished, and fleets grounded at all maritime ports. Simultaneously, enlightening intellectual movements emerged, based on individual initiative and creativity in general. Science evolved, philosophy flourished, dialectic theology appeared. The full creative, intellectual and scientific wealth produced by Arab minds during this short period has not, until even now, been properly recorded or evaluated. It calls for a second reading, to ascertain the points of connection to modern human thought in general, and liberal thought in particular. It is enough, in this context, to mention some of the many names who have enlightened free Arab thought: Alpharabius (Al-Farabi), Averroes (Ibn Rushd) and Al-Jahiz. The last is worth a short pause, as he believed centuries prior to Descartes in the power of the mind, and said: I swear to my life, eyes make mistakes, the senses lie; true judgment can only be attained through the mind. Al-Jahiz is among the pioneering founders of what is now understood as critical thinking

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the use of reason to acquire truth and laid the ground for the skepticism, or methodological doubt, later advocated by Descartes. The second point is that a renaissance can only flourish in an environment that is suitable for freedom and protective of human dignity. Such freedom and human dignity have been achieved relatively speaking only when the grip of central power loosened in the Arab empires. This loosening resulted in a genuine desire in the Arab individual to promote his or her reality and, subsequently, to revive movements of creativity and innovation, and to get in touch with other cultures through translating works in foreign languages particularly Greek, Syriac, Persian and Hebrew into Arabic. That created an enabling environment, also, for a boom in science and the arts, and improved the quality of living quality. This leap often took place through pure individual initiatives, diverse and various, flourishing only because the dominant eye of the state blinked and looked to other matters. Arab Islamic society at that time was close to modernist society, if compared to prior and post periods. Moreover, Arab society could achieve religious enlightenment, which helped in the reform and purification of belief systems and religious behavior. The religious enlightenment also led to intellectual, cultural and philosophical enlightenment, which contributed to the expansion of the space of the rational. This religious-intellectual enlightenment duality had been curbed by despotism and authoritarianism sheltering behind armies; an overestimation of physical powers along with an underestimation of the power of intellect. Apparently, the expansion of reason and influence of intellect started to annoy existing rulers, especially when intellectual braveness replaced classical, physical or military braveness. Rulers could feel the threat to the pillars of their empires, and their decision was to quash the elements of the renaissance. A campaign was launched to persecute free thinkers in general, and mutazilah (religious rationalists) in particular. Books were burned and sources of freedoms and intellectual plurality dried up altogether. Even the door to diligence (or ijtihad) was closed to jurists and scholars,


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accelerating the plunge of the Arab and Islamic world into the dark ages. This paved the way to the Wahhabi movement, succeeded much later by the Muslim Brotherhood and other radical Islamist currents. Grounds were laid for the stabilization of despotism in the Arab world, enabling rulers to control peoples lives and livelihoods. As a result, the Arab individual stopped all attempts to move forward and became preoccupied with immediate concerns. The conservative tendency deepened, promoting backwardness and satisfaction with less, and a reluctance to aspire for another kind of life. This is the reality in the Arab world a disabling reality nonetheless enabling for radical movements. Thus continued the Arab world until the Arab Spring revolutions, by which time conservative, political Islamist movements had become widespread.

Political Islam in the Arab world today

A deep conflict is unfolding at present between aspirations for the establishment of a modern secular civic state and another tendency towards the establishment of an Islamic state. That was clearly apparent after the first electoral results in some Arab Spring countries. As a matter of fact, both tendencies are still immature in their visions and understandings, let alone the ulterior agenda of reviving the Islamic Caliphate state, which is not bluntly pronounced, yet is widely-believed to be the ultimate goal for all currents of political Islam. Although that model was never achieved whatsoever, at any given time and remained a pure utopian aspiration, it is important to reflect on concept of the Islamic state within the reality of political Islam in the Arab world today. In his book, Concept of State, Abdellah Laroui says that the concept of the Islamic state remains incomplete, ... unless we realize the raw material of politics, namely the psychology of the individual and his or her ideas about the state and rule. All of which are results of education neither exclusively nor mostly

Bridging the Gap conducted by the state. Education that is mainly the responsibility of parents at home, the Imam at the mosque, or sheikh at praying corners, who are all influenced by Sharia writings and what we call Islamic utopia.


Hence, the battle around modernism in the Arab and Islamic worlds centers on the human being. The gains made by political Islamic movements in the Arab world will never distract such movements from their preoccupation with man the raw material for the desired model and classical mentality. The role of religion in general, and Islam in particular, is undeniable especially in establishing values and ethics, and regulating relationships. It is true that absorption of religious values in general, and Islamic tolerant values in particular, should result in an Arab society raised on norms of justice, mercy, truthfulness, coexistence, and peace. However, such a relationship between religion and society needs to be based upon the principle of respect for human personality and individual freedom, rather than upon superiority and guardianship over individuals and the whole society. Such superiority and guardianship are exercised in order and only to gain recognition that the source of legislation and power is heavenly and sacred, instead of man made, revisable and challengeable. In this way, the function of state is understood as coercive, socially and doctrinally, and does not tolerate free choice or independent opinion, or even a rotation of power, still less a purely rotating and social function responsible for fulfilling the Arab individuals need for security, stability, education, healthcare, dignity, welfare, and other common interests that should be established by consensus. In a religious state, there is no room for negotiations or bargaining with religion or its consequences. The real struggle in the Arab world now is purely educational and cultural. It is not limited to direct political practice, but rather extends to the entire social arena particularly education. Political change cannot be successful unless solidly based on religious reform


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first, then cultural and philosophical reform. Islamists understand that approach, and have dedicated their full capacities to fulfilling their desired outcomes. At-Tarbiyyah, or education, is in the literature of the Muslim Brotherhood the core of doctrine. The Muslim Brothers developed certain steps and stages for their work on education, starting with advocacy, then preparing supporters and soldiers, and then implementing their vision in practical work. Their main objective in that educational approach is to separate themselves from the non-Muslim society as they like to call it in order to make a radical change in the general society and politics. A change that would take place through religion, and by hands of the rightly elected group. It is unfortunate indeed that a counter-strategy does not exist. Neither at level of reforming religion and developing a better understanding of Sharia, nor at level of improving formal educational curricula in the Arab world. Instead, cultural and societal structures in Arab world are still governed by traditional and classical tendencies. Educational curricula are still full of superstition, instead of educating enlightened generations to fight superstition.

Dilemmas of tradition and religion

To anticipate what it might be like if traditional education, which dictates obedience and submissiveness and discourages critical reasoning and free opinion, continues to prevail, here are some statistical results from studies conducted by specialized think tanks on levels of adherence to religion within certain peoples. In May 2013, a survey was conducted by the Pew Research Center an American think tank of 39 countries around the world, showing that considerable percentages of Muslims support enforcement of Sharia as their local law. Furthermore, the survey showed that Muslims differ on how they interpret Sharia, even among highly educated elites. The study indicated that outspoken adherence to religion by the vast majority does not negate the fact

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that huge disparities exists when it comes to understanding religion and how it should be practiced. Moreover, the study referred to signs of silent conflict inside society between inherited traditions and modernist values. It is unnecessary here to elaborate on these dilemmas, such as combining majority adherence to religion with variant understandings of the practice of the same religion. It is also unnecessary to recall the eras of Western colonization in the Arab world, when adherence to Arabism and Islam were matters of survival, with the identity, religion, civilization, and history of Arab society a focus of colonial concern. Ultimately, interaction among human societies obliged the Arab world to follow different patterns of intellectual and societal development. Women, in particular, and the family in general, played the biggest role in accelerating that development. Changes related to the family, its components, relations among its members, the status of women, the way it deals with both inherited and modern values, the decrease in the size of Arab families in some countries (from seven or more, to lower averages), and the spread and development of education, alongside broadening of spaces of communication in all its forms all these elements contributed to opening the way for practicing democracy and freedom, and questioning old ideas. Arab families have become more of a club, where discussion, debate and an exchange of views occurs in a frank and open manner, compared to past times when norms and customs imposed a separation of boys and girls, even inside the family, and banned children from expressing their opinions before their parents or older relatives. Furthermore, the engagement of women in ever more aspects of life is a crucial turning point in terms of the great Arab societal revolution. Now, one can confidently say that the more liberal women are in an Arab society, the more qualified this society should be to move towards modernism and to greater universal values. Where womens issues are recognized and addressed in Arab societies, traditional sets of values are increasingly questioned.


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Liberal approaches and the Arab world

Modernizing the Arab Islamic world is becoming, today, a more urgent need than ever, in order to empower this part of the world to benefit from the innovations of mankind and the development of human civilization. One may say that the trigger of modernization has already been pulled across the Arab world. In some parts of the Arab world, modernization is still fresh; while in other parts it is reaching a peak. In all cases, modernization has been unleashed. It is, then, our duty as Arab liberal forces to set proper strategies to accelerate it, and to put into our consideration that concerted efforts on both sides of the Mediterranean are needed to achieve positive outcomes. Bertrand Badie writes: Thinking that other cultures could fully accept Western values is pure fantasy. He also believes that the project for the globalization of Western values will always be hit by the truth that these values have been tailored by one history: the history of the Western people. In this regard, he is mistaken. The West is not homogenous in its thinking. Neither are Western peoples unique and different from others. The human being is the same everywhere, regardless of the contexts and conditions he is subject to. Similar to the current situation in Arab societies, Western societies had as well experience of religious rigidity and corruption within Christianity. The reform revolution finally started under the leadership of Martin Luther, who succeeded in renewing and changing Christianity to match the developing era where printing was promising in spreading knowledge, which in turn was an incentive to accelerate religious reform. The events of the Arab Spring witnessed unprecedented participation by all segments of Arab society, and proved Badie mistaken, rather revealing that such sentiments were simply being used by despotic rulers as a pretext to block change. The history of universal values is a history shared by human groups both East and West, because man is very much the same whether Arab or otherwise. However, I do agree with Badie that, not all values can be generalized, unless established equally by everyone. Indeed. We

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have seen the Arab masses uprising in Egypt, Tunisia and Libya to establish values of freedoms, human dignity and democracy, and this process is still ongoing and will be stamped by their trademark: Made in Arab countries. A common mistake occurs when researchers and specialists in Arab and Islamic affairs address these affairs with a preset vision of a geographically limited Arab and Islamic world. The reality is that it goes even further than its real borders, up to the furthest point of the Western world itself. The Arab and Islamic world is even very likely to further penetrate the Western world, thanks to the values we advocate as liberals such as freedom of movement for people and goods and thoughts. It is certain that such penetration, when it happens, will carry negative qualities along with positive ones. We need, therefore, to launch a joint program for mutual understanding of our common reality in the Arab and Western worlds, and to start developing common solutions for the issues emerging from that reality. The Western world did try, through a number of intellectuals, to reflect deeply on Islamic affairs and social and cultural phenomena experienced in this part of the world. Orientalists, who flourished as a movement in a certain time, produced important works that helped in better understanding Islam and the psychological and ethical components of Arab societies. However, some dishonest approaches destroyed the trust others had built up, replacing it with question marks as to the real intentions of the producers of knowledge. Liberals today need to work on reviving noble and genuine Orientalist practices, such as the dialogue of civilizations and cultures, and must encourage common and regular intellectual exchange on the means to give root to modernist thought and liberal values, giving ground for that genuine dialogue of civilizations.


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Rebuilding Arab foundations: Islam, citizenship and development

It is evident that religious reform can lead to enlightening cultural reform, and subsequently to political reform. For us, the gateway to comprehensive reform in Arab states depends on updating Islamic jurisprudence and modifying Sharia to become more enabling and harmonious with the times, and therefore more applicable. That requires internal corrective movements to work on reconsidering Islamic jurisprudence and Sharia. It also necessitates better utilization of contemporary concepts, and this can only be achieved if those who are open and capable of diligence start renewing existing thinking in all fields according to the necessities of the time. This should link religious reform to intellectual enlightenment, and should pave the way for developing contemporary knowledge and methodologies. The Arab world suffers a mass schizophrenia. If one asks an Arab citizen, Who are you? the same citizen gets confused. Should he say Arab, non-Arab, Kurd, Amazigh, Druze? Or should he say Muslim, non-Muslim, Arab Copt, Arab Christian, or even Shia Muslim, or Sunni Muslim let alone his clan, or tribe, or other sect. Add to that plurality of belonging a lack in the sense of citizenship, which should encompass all these belongings and return them in the form of rights and duties, the rule of law and equal opportunities. Arab societies need also to revisit understandings on more institutionalized liberal principles, including the right of ownership. Ownership is generated from acknowledgement of Arab citizens right to own his or herself in whatever variances of that self, starting with a gender approach. Women in our Arab world are still in urgent need of having their rights of full ownership acknowledged and recognized, in order to fully enjoy other rights. Moreover, the Arab citizen needs to completely get rid of the privacy complex, and to get engaged in added human value. Arab societies also need to move forward towards levels of full respect for the unique character of Arab citizens, which should be interpreted as the faculties enjoyed by every person if equal opportunity, freedom

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and dignity safeguards are provided. In such a case, the Arab citizen would be, indeed, an added value to the development of his or her society. Only such a citizen is capable of making a new modernist society. It is strange that all the successes achieved by the liberal model in economics, based on market economy and economic freedoms, failed to translate to adequate studies of the poor, or to properly promote successful liberal models and experiences in eradicating poverty all over the world. The Arab world is in dire need of that. Studies such as those of Professor Hernando De Soto may prove useful. He analyzes the obstacles that may hinder the poor in benefiting from the market economy and economic freedoms, in addition to enjoying full rights of ownership. The Arab world needs a serious and humane approach to help the Arab citizen get out of the vicious cycle of need and poverty a cycle many try to sustain because their narrow electoral interests lie in its continuance. This is a point of difference between a liberal and a non-liberal: the liberal seeks to build the citizen, so he or she is able to make free choices, independently and freely, with no ulterior considerations. Poverty alleviation is another field for potential cooperation between Arab liberals and their Western friends, where all may share in its study, to come up with better recommendations.


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The role of religion in society and politics in Europe, or: three myths of secularity in Europe
Sven Speer
Nine out of 10 people will mention secularity as a defining characteristic of contemporary societies when asked about the relationship between religion, society and politics in European countries. Only few will note that the notion of a secular Europe has been from the very beginning a case of abstract normative theorizing rather than a state of lived political reality. The myth of secularism has been told as follows: economy, science and state would be increasingly separated and independent from religious influence; this would result in the privatization of religion, its removal from the public sphere and in the most extreme vision, in the disappearance of religion as known thus far (Casanova, 2004, pp. 19-39). During my time at the Cluster of Excellence Religion and Politics at the University of Mnster, a colleague of mine a philosopher once gave a presentation on Jrgen Habermass concept of the secular state. I was next in giving a presentation that discussed the relationship between the state and religion in Germany. My colleague was the first to raise his hand and asked: Sven, has there never been a secular state in Germany? My response was straightforward: No, there hasnt at least not in Western Germany. The philosopher was puzzled. Indeed, the majority of people in Europe adhere to what I refer to as the three myths of secularity. In this paper I would like to disprove: 1) the myth of secular societies in Europe; 2) the myth of secular states in Europe, and; 3) the myth of the superiority of secular states. Finally, as a political activist, I would like to introduce an alternative to the secular state, namely my vision of Open Religious Policy.


Bridging the Gap

The myth of secular societies in Europe

To what extent are European societies secular in reality? In 2010, Eurobarometer conducted a representative study that included 27,000 participants from across Europe (this amounts to approximately 1,000 participants from each of the 27 member states). The participants were asked whether they believe in God, in some sort of spirit or life force, or in neither of the given options. Only 20 percent of Europeans do not believe that there is a sort of spirit, God or life force; 26 percent believe in some sort of spirit or life force, and 51 percent believe in God. Although supposed to be secular, a thin majority of European citizens believe in God. When evaluating the results from individual countries the responses are more complex. Religious beliefs differ starkly amongst European societies. In Cyprus and Romania, more than 90 percent believe in God, whereas in the Czech Republic and in Sweden less than 20 percent do. But as a rule, in countries where believe in God is weak, believe in some sort of spirit or life force is stronger than disbelief. Only in France are the strict nonbelievers the largest of the three groups, with 40 percent of the population (TNS Opinion & Social, 2010). Nonetheless, European societies are becoming more secular (Norris and Inglehart, 2011, pp. 85-89). However, this trend does not result in homogenous but in increasingly pluralistic societies. Many European societies are home to strong secular minorities and it cannot be taken for granted anymore that European citizens belong to the Christian faith. In many societies, affiliation to traditional churches has become but one option amongst many (Roy, 2011, p. 43). Not despite but precisely because religious participation rates are declining among Europeans, religious differences are becoming more important and more disputed (Roy, 2011, pp. 275-277). One major impact on the religious landscapes of European societies is the immigration of Muslims. However, one would be mistaken to overemphasize the impact of immigration. Many of todays immigrants and their descendants are agnostics or atheists; at the same time Europeans without any past ties to Islam

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have become Muslims. Religious diversity in Europe cannot and must not be reduced to mere cultural diversity. We are not observing a clash of civilizations but a new dimension of individual religious choice. The same is true for societies around the globe. In former Confucian South Korea, the majority of the population is Christian now; there are growing numbers of atheists in the United States, atheistic Russians re-discover their Orthodox tradition, Pentecostal Christians proselytize successfully in Arab states, and Europeans convert to Islam. To sum up: European societies are not secular. They may become more secular but more importantly, there is a trend towards a new diversity.

The myth of secular states in Europe

The continental European branches of liberalism and socialism relentlessly criticize the entanglement of state and religion in their own countries. To the outside world they continue to promote the model of the secular state as a European invention and reality. However, the United Kingdom, Malta, Greece and most of Scandinavia have state churches Finland has even two. With the Vatican State, Europe is de facto home to a theocracy. The heads of state in the United Kingdom, Denmark and Norway are simultaneously the leaders of state churches (Fox, 2008, pp. 111118). In continental Europe, parties of religious defense, such as Christian Democratic parties, have gained about 30 percent of votes in national elections and held government positions for an average of 43.5 years in the time from 1945 to 1999 (Manow, 2008, p. 69). One can even trace the differences between European welfare states back to religious differences: the Social Democratic welfare state is predominant in Northern Europe with its tradition of Lutheran state churches; the corporatist approach dominates Catholic countries, and the liberal welfare state characterizes those countries where Calvinism and other free Protestant churches have been strong (Manow, 2008, pp. 11-31).


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Today, state churches and the impact of religion on society may be seen as historic relics of the past. However, even the present European states are strongly intertwined with at least some of their respective churches. In Finland, Greece, Luxembourg, Portugal and the United Kingdom some members of the clergy are appointed by state officials. In most European countries optional religious education is offered at public schools, and schools run by religious entities are state funded. In many of them, the state funds religious charities as well. The state collects church taxes in Austria, Belgium, Germany, Italy and others. In at least every second European state, religious entities have to register with the state to gain some form of privileges. Some states maintain a strict sect monitoring policy against new religious movements (Fox, 2008, pp. 112-113, pp. 144145). Even the officially laicistic France that has banned headscarves from schools even pupils are prohibited from wearing them has no strict separation of state and religion. The state funds religious schools (mainly Catholic) up to 80 percent; these are attended by every fifth French pupil. Catholic, Protestant, Jewish and Muslim chaplains serve in the military. Some areas of France are characterized by an even stronger entanglement between state and religion. In Alsace-Moselle, the laicistic laws have never been applied as the area was part of Germany at the time of their commencement. Today, there is four officially recognized religions in Alsace-Moselle: Catholicism, Lutheranism, Calvinism and Judaism. The salaries of their clergy stems in part from public funds, there are crucifixes and mandatory religious education in public schools, and the University of Strasbourg hosts a theology department (Kuru, 2009, pp. 109-111). In the whole of Europe, state and religion are far from separated; instead they are intertwined in various different ways. Even France, the ideal of laicism in theory lacks a strict separation in practice.

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The myth of the superiority of the secular state

For many continental European liberals (and socialists), a secular state, strictly separated from religious influence, embodies the perfection of neutrality. However, there is no factual evidence to prove such claims quite the contrary, throughout history secular states have been far from neutral. Revolutionary France in the 1790s was one of the first secular states. The French Republic confiscated church property, dissolved ecclesiastic orders and congregations, removed iconography from places of worship, destroyed crosses and bells, introduced a non-Christian Cult of Reason and killed reluctant clergy. Antireligious regimes in the former Soviet Union and other socialist states attempted something similar. The theoretical foundations of secularism are found in streams of liberal thought that emerged predominately in countries with overly powerful religious institutions, such as France and Turkey. Non-liberal statesmen like Aristide Briand (1862-1932) and Mustafa Kemal Atatrk (1881-1938) proponed the idea of a popular supremacy against the real or fictional supremacy of the church or religion. The means of the state were thereby exploited, and marginalized religious influence (Kuru, 2009, pp. 14). Instead of confining the expanding state, liberals supported state expansion at the cost of religion. This had a negative impact of public freedom in general (Raico, 1999, p. 37). Today the bloody wars of secularizing the state are over. Paradoxically, it is the secularization of European societies that undermines the neutrality of the secular state. As the number of European citizens who adhere to secular ideas becomes greater, these citizens seize the opportunity to advocate and lobby for policies that maintain and/or support the secular state. This is a fairly recent development at no point in the religious past has the secular state had a party made up of its stakeholders in society (Willems, 2001, p. 231). This is even more problematic in combination with the expansion of the state into areas dominated by religion in the past, especially education and welfare. When a state only provides or funds secular supplies in these areas, it


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marginalizes its religious citizens (Monsma and Soper, 1998, pp. 5-7). While governments supported specific religious traditions in the past and many still do the expansion of the secular state often equals a hostile takeover of religious activities (Reuter, 2007, p. 184). A strictly secular state with no attachments to religion is not neutral as it has its own stakeholder party among citizens. The more extensive the secular state is, the more it interferes with the personal belief and non-belief of its citizens.

The alternative to the secular state: Open Religious Policy

There are alternative approaches other than secularism that allow the liberal state to organize diverse societies. Such approaches are found within the liberal thought of John Stuart Mill and Isaiah Berlin. Both authors warned against the monopolization of state policy by one group or another even when such measures are considered to enhance the good of all (Mill, 2010, p. 29, p. 24). Berlin measured the freedom of a society by the number of choices it allows its members. In order to guarantee a variety of choices, the power of the state has to be limited (Berlin, 2006, p. 249). However, this does not imply a reduction or even an abolition of the state. As Mill stated, the critique against public education is not that there is public education, but that the state is the executive of public education (Mill, 2010, p. 151, p. 153). The state has no right to influence its citizens to become adherents of religious traditions, nor has it the right to influence them in such ways that may result in an abolition of religious practices. But it has the right, and I would argue the duty, to guarantee the availability of services to all of its citizens. This entails that the state must provide the policy framework and the funding for such services. These arguments are central to the development of what I have termed Open Religious Policy. The concept of Open Religious Policy aims to establish a relationship between the state and religion

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that provides all religious and secular entities with the same access to the public sphere and state funding, whilst safeguarding the right of religious choice for the individual citizen. I thereby define Open Religious Policy through four core principles: 1) the unbiased state; 2) public expression; 3) guaranteed individual freedom; 4) free choice. Allow me to introduce these principles briefly.

1. The unbiased state

If we accept that every person is a freely thinking and acting being, the state must not shape its citizens according to the ideas of others (Berlin, 2006, pp. 245-255). The state has to respect the free choice of its citizens when it comes to religious matters. It must neither privilege nor proselytize individual religions, religion in general or non-belief. Open Religious Policy does not homogenize citizens; instead it fosters the practice of tolerance so that the acceptance of diversity is socialized (Willems, 2003, pp. 107-108). This process is as challenging for individual citizens as it is for the societies they form. Nonetheless, citizens have to learn that there must be a difference between legitimate public indignation and illegitimate interference of the state (Mill, 2010, pp. 16-17).

2. Public expression
While the state must be impartial in the religious sphere, citizens are free to express their belief or non-belief in public (Willems, 2003, p. 108). Religion is a private matter, but at the same time, citizens have the right to show their faith in public life. Neither the public nor the state are reserved primarily for one group of religious or secular beliefs (Willems, 2003, p. 106). However, the public sphere must not be a place of state-imposed harmony. The state must allow for conflicting views to be expressed publicly (Mill, 2010, p. 109, p. 121). Different opinions of religious traditions and nonreligious systems can therefore be articulated peacefully as the public visibility of differences is the only way to learn to deal with them.


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3. Guaranteed individual freedom

The state must respect the freedom of choice of each individual citizen. But the same is true for religious and secular congregations. The right to freedom of each individual citizen is unalienable: no individual can permanently relinquish his or her freedom in favor of a congregation. There is no right not to be free (Mill, 2010, p. 147). The individual citizen, therefore, has the right to leave his or her congregation, but also has to live with the consequences that stem from this decision, such as termination of contact by the former community. Nonetheless, the state has to prohibit physical harm by the former community against the breakaway by all means.

4. Free choice
The state has to provide access to public funds for services and initiatives of all groups in society, be they faith-based, secular or indifferent. Any such services, whether organized by the state or groups, are equivalent in what they offer the members of society and therefore equally worthy of funding. Every group has the right to receive state funding to provide healthcare, childcare, care for the elderly, shelter for the homeless and so on, according to their belief. Precisely because the services of the state cannot be neutral, the state has to make funding available for private initiatives (Monsma and Soper, 1998, p. 1). This, however, does not mean that the state gives up its coordinating function. For example, the state sets the amount of funding allocated to certain services. It cannot decide, however, how and by whom services should be provided. To guarantee the freedom of choice for everyone and to avoid monopolies of individual faith groups in the provision of certain services, the state has to provide its own services that should accommodate all traditions and try to be as neutral as possible.

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In this paper I have attempted to disprove the perception of European secularity. Large sections of European societies remain religious. Part secularization has resulted in an even greater diversity in society. The secular state is dominant in European thought, but not in practice. As I have argued, in times of religious diversity it is not even preferable to organize society through secularism. A better approach to guarantee individual freedom regardless of religious belief or non-belief may be found through what I have termed Open Religious Policy. Crucially, this concept requires the state to be open to all religions and secular traditions. In essence, Open Religious Policy is based upon four key ideas: 1) the state must be unbiased towards religious and secular ideas; 2) citizens have the right to practice their religious and secular ideas in the private as well as public sphere; 3) the state guarantees the rights of its citizens to leave their congregations; and 4) the state has to fund faith-based services in education and welfare besides providing its own.

008 References

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Berlin, Isaiah, Freiheit: Vier Versuche (Frankfurt: FischerTaschenbuch-Verlag, 2006). Casanova, Jos, Public Religions in the Modern World (Chicago: University of Chicago Press, 2004). Fox, Jonathan, A World Survey of Religion and the State (Cambridge Studies in Social Theory, Religion, and Politics), (Cambridge: Cambridge University Press, 2008). Kuru, Ahmet T., Secularism and State Policies Toward Religion. The United States, France, and Turkey (Cambridge Studies in Social Theory, Religion, and Politics), (Cambridge: Cambridge University Press, 2009). Manow, Philip, Religion und Sozialstaat: Die konfessionellen Grundlagen europischer Wohlfahrtsstaatsregime (Frankfurt: Campus-Verlag, 2008). Mill, John Stuart, ber die Freiheit (Stuttgart: Reclams UniversalBibliothek, Band 3491, 2010). Monsma, Stephen V. and J. Christopher Soper, Introduction, in Monsma, Stephen V. and J. Christopher Soper, (Eds.), Equal Treatment of Religion in a Pluralistic Society (Grand Rapids, Michigan: Eerdmans Pub Co, 1998), pp. 1-8. Norris, Pippa and Ronald Inglehart, Sacred and Secular: Religion and Politics Worldwide (Cambridge Studies in Social Theory, Religion and Politics) (Cambridge: Cambridge University Press, 2011). Raico, Ralph, Die Partei der Freiheit: Studien zur Geschichte des deutschen Liberalismus (Stuttgart: Schriften zur Wirtschaftspolitik, Band 7, 1999). Reuter, Astrid, Skularitt und Religionsfreiheit ein doppeltes Dilemma, Leviathan Vol. 35, No. 2 (2007), pp. 178-192. Roy, Olivier, Heilige Einfalt: ber die politischen Gefahren entwurzelter Religionen (Mnchen: Siedler Verlag, 2011). TNS Opinion & Social, Biotechnology, Eurobarometer 73:1 (Brussels: European Commission, 2010).

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Willems, Ulrich, Skularisierung des Politischen oder politikwissenschaftlicher Skularismus? Zum disziplinren Perzeptionsmuster des Verhltnisses von Religion und Politik in gegenwrtigen Gesellschaften, in Hildebrandt, Mathias, Manfred Brocker and Harmut Behr (Eds.), Skularisierung und Resakralisierung in westlichen Gesellschaften: Ideengeschichtliche und theoretische Perspektiven (Wiesbaden: Westdeutscher Verlag, 2001), pp. 215-240. Willems, Ulrich, Religion als Privatsache? Eine kritische Auseinandersetzung mit dem liberalen Prinzip einer strikten Trennung von Politik und Religion, in Minkenberg, Michael and Ulrich Willems (Eds.), Politik und Religion (Wiesbaden: VS Verlag fr Sozialwissenschaften, 2003), pp. 88-112.


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Blueprints for the future of liberalism in the Arab world

Alexandra Thein
In case this has ever been in doubt, there is a future for liberalism in the Arab world. Revolutions in the Middle East and North Africa (MENA) region have created a point of no return for democratic institutions in post-revolutionary countries of the region, creating a similar point of no return for liberalism. There are risks, however, that a more fundamental entrenchment of liberalism in the Arab world may not follow. The process of promoting liberalism in the Arab world requires acceptance of past mistakes and disregard of short-term interests, a hurdle that will be difficult to surmount for actors on both sides of the Mediterranean, to ensure that the revolutions will not merely remain a transitory process down the path of future authoritarianism. The European Union (EU),1 including the European Parliament (EP),2 and the Alliance of Liberals and Democrats for Europe (ALDE)3 group in the EP, can play a crucial role in this transition process.

For reasons of simplicity, the EUs main institutions the European Parliament, the EU Commission and the Council of the European Union are referred to in this article as the EU. Where relevant, note will be made of the institution in question. The European Parliament currently has 754 members, elected through EUwide elections in all 27 soon to be 28 Member States of the EU for a period of five years. The current mandate runs from 2009-2014. The liberal Alliance of Liberals and Democrats for Europe is the third largest group in the European Parliament with 86 members. There are six other groups in the EP.


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Contemporary context in the framework of past experiences

Clarifying the concept of liberalism, and especially liberal values, is a necessary first step in order to ascertain the future of liberalism in the Arab world, and how liberal parties in Europe can facilitate this process. Fundamental liberal values encompass individual and civic rights, respect and implementation of the rule of law, equal rights for all, including minorities, political and cultural pluralism, free economic enterprise and democracy based on these liberal principles. A further aspect, which bears particular relevance in the Middle East, is the notion of individual responsibility, which is currently incompatible with the structure of Middle Eastern societies and families. In Europe and the Middle East, liberalism developed along very different historical lines. However, there are striking similarities between the two regions and their interpretation of liberalism, and this has proven to be one key building block upon which to encourage a process of dialogue, mutual assistance and common strategies. Despite the revolutions of the Arab Spring, which in themselves were an expression of the popular demand for democracy based on the respect of the rule of law, and human and individual rights, liberal parties in the Arab world have not enjoyed electoral success, except and for its own individual reasons in the recent elections in Libya. There are several reasons for this, both domestic and international. The scope of this article does not include a detailed analysis of these reasons, but rather focuses on the EU and EU member states roles in this electoral reality and what steps can be undertaken by both international and national actors to overcome this problem in the future. In the past, the EU and its member states engaged with the region on the basis of interest-based policymaking. The bilateral Association Agreements laid out paths to reform in the political including human rights economic and social sectors, but engagement has largely focused on energy, security and immigration policies. In some regards, the EU did pursue reform in

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the three mentioned policy areas, but its member states individually pursued different strategies, in some cases even contrary to the EUs stated policy goals, particularly in the advancement of human rights. Instead, violations of human rights were, and still are, widespread, the principle of rule of law is not universally applied, and individual rights have not been achieved. Despite this, European countries have not been consequential in their approach to the region, continuing to pursue deep economic, political and security ties with countries that in some cases violate these principles. This begs the question as to what can be done to reverse this trend and how liberalism can reclaim lost ground in a region of vast potential.

The future of liberalism in the Arab world

These patterns of engagement explain some of the current problems for liberal reform in the region. There are distinct approaches that can help alleviate these issues and further steps would not only mitigate the challenges liberalism faces in the region, but also lay the foundation upon which to build institutions that would enable the growth of liberalism as a defining ideological force in the region. The EU and the relevant actors in the region including politicians, activists, NGOs and other stakeholders need to rethink their strategies for the region if liberalism is to succeed. These measures are very different in their scope but are of equal importance and all of these processes and reforms must go hand-in-hand if they are to fully succeed. These measures range from policymaking, political campaigning and dialogue, institutional reform to boosting economic entrepreneurship. The EU, comprising several actors and stakeholders in itself, must also take certain paths to achieve this aim. It is necessary to note, however, that due to the different historical contexts within which liberalism developed in the Middle East and Europe, Europe cannot not export its own form of liberalism as a blueprint for liberalism in the Arab world. Despite this slightly disparate development, the EU, and more specifically liberal parties, activists


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and other stakeholders, can use past experiences with the Eastern neighborhood and policymaking in the Middle East to assist the liberal reform process in the Arab world. These steps, briefly outlined below, would give the necessary impetus for long-term establishment of liberalism in the Arab world. The steps must be applied at different levels and involve different actors on the local, national and international levels.

An entrepreneurial middle class and economic reform

The driving force of liberalism in Europe is and has been the entrepreneurial middle class, not only in terms of economic growth and progress, but also as a bulwark against extremism. A strong middle class has always been a guarantor of liberal democracy. In the Arab world, this entrepreneurial middle class plays a slightly different role with regard to the European entrepreneurial middle class in terms of the societal, political and economic structure within which it operates. The role of the middle class within countries of the Arab world had thus far been mitigated and limited by the bureaucratic structure of the state within an authoritarian political system. This middle class has to develop and grow beyond the limits of the previously existent authoritarian bureaucratic apparatus, to drive economic growth forward, thereby strengthening and solidifying itself and playing a similar role to that which its counterpart played in Europe. The development of strong economic and institutional foundations is necessary for the solidification of liberal democracy in the states in question. However, it is equally important to ascertain that economic reform and rapid privatization to encourage free enterprise in itself is not the answer to entrenching liberalism in countries in transition rather the opposite. In states in transition, especially where institutions were and continue to be weak, rapid economic liberalization will not entrench liberalism in a lasting manner. The case of Iraq is an example worthy of note. The current

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political and economic instability stem from the implementation of the idea that unfettered economic liberalization will inevitably lead to economic growth, which in turn will lead to the development of a free society, respect for the rule of law, and individual rights for all. The case of Iraq provides a particularly useful example because the political conditions in the country before the fall of an authoritarian regime and after the establishment of a weak political system in a state in transition bears some resemblance to the conditions existent in other now post-revolutionary countries of the region. This onesided policy approach will, by virtue of the fact that in the Arab context this will most likely fail to achieve the stated goals, only serve to deepen mistrust towards European and more generally Western ideals, thus achieving the opposite effect of the stated goals, leading to the alienation of the regions peoples from liberalism as a set of values. Hence, economic development for a sound and politically educated middle class must include a particular role for the state and state institutions.

Role of the state and its institutions

One of the fundamental requirements for the further development and entrenchment of liberalism in the Arab world concerns the role of the state and its institutions. Despite one of the fundamental liberal ideals espousing a reduced role of the state, a facilitating actor or vehicle is nevertheless required in the initial phases of the reform process in post-revolutionary political contexts. Setting up effective, functioning and facilitating institutions in turn requires a sound, efficient and functioning bureaucracy able to contribute to the societal, infrastructural and economic development of the country all necessities for the further development of an entrepreneurial middle class, the core building block of a liberal democracy. This would necessarily need to include a democratic system of checks and balances to ensure no one institution has more power than another. Paradoxically, the current problems observed in Egypt, Iraq and Lebanon highlight the need for a functioning


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institutional structure in order to develop the necessary framework for liberalism to thrive. The forces and actors of the old regimes cannot be excluded in this process of reform. Lasting and thorough reform of political and institutional systems consists of inclusionary approaches. Disenfranchisement and exclusion are potent forces that lead to elements of former regimes becoming alienated, leading to instability and in some cases prolonged violence, either on behalf of one group towards another or versus the state. This can severely damage the potential for reform. Previous experiences highlight this, with the current crisis in Iraq serving as the starkest example. Consequentially, institution-building mechanisms must be at the forefront of the EUs engagement in the region, which encompass reform of the administration, judiciary and other institutions that make up a liberal democracy. Separately, police and security forces must also be reformed to uphold the rule of law, whilst respecting human and individual rights. Once the relevant infrastructural, institutional and political structures are in place, the bureaucratic structures would provide a slender and efficient structure ensuring economic growth based on an entrepreneurial middle class whilst preserving individual and human rights, respect for the rule of law, and equal rights for all.

The role of liberal political parties

Currently, in some MENA countries, liberal political parties remain fragmented. This is especially true in Egypt. To some degree, this is the result of the prevailing system of political tribalism, but other factors also play a role. Liberalism cannot thrive and develop in a context of intense personal political rivalry, especially if these parties are linked with a particular personality, rather than a party program. Further, infighting within a partys leadership and between parties severely dents public opinion of the party or parties in question. Credibility can be restored if the leadership of an individual party stands united and fights for a

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common goal. Liberal parties in the Arab world must find a way to work together on a common platform and must unite if they are to succeed. Fragmentation in most cases translates to electoral defeat. In order to avoid this, sacrifices and difficult choices must be made, as facing elections in unison bears more chances of success. Additionally, it remains paramount that liberal parties continuously engage with other stakeholders and actors. Complete boycott of political proceedings may not always be the answer to a situation in which liberal parties are in the opposition. Especially in a state in transition, influencing the policymaking process is of vital importance. Placing liberal values and a liberal programmatic platform at the center of its political work is a further necessity for continuous success of liberal parties in the Arab region. Connecting political ideals with the work of political parties not only serves to ensure continuity, but also generates trust in a party. In this sense, parties need be founded on a solid base of membership from which its leaders emerge, as opposed to individual politicians creating parties from a set of followers. This process must be accompanied by cooperation and dialogue between liberal parties; otherwise the dismal election results in Egypt will repeat themselves not only in Egypt, but also in other Arab countries. In essence, liberal political parties face a painful choice: succumb alone or thrive together. Liberal parties and liberal politicians in the Arab world can achieve this by reengaging with the street and with common voters. In a context where several liberal parties exist on the political landscape, this is particularly important. Liberal European political parties also need this fundamental, long-term reengagement with the street in a context of shifting party landscapes with swing voters.

Political campaigning and programing

Political campaigning and party programs is a factor that is closely related, yet distinct from political parties. The fundamental method to engage with voters is direct contact on the street, in


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educational establishments, and in public space in general. Most recently, this was forcefully brought forward in the ALDE council meeting in Pula, Croatia, in May 2013, especially for those European liberal parties struggling on the national level. This process of political campaigning needs to be decoupled from electoral cycles. Campaigning outside electoral cycles increases credibility and inspires more trust from voters in the electoral program, as well as increasing their exposure to liberal values in general. Over time, the rewards of this type of direct engagement serve to establish liberalism as a particular brand of values and ideals distinct from other parties. Shared experiences and best practices are but two ways that European liberal parties, specifically through the ALDE group in the EP and the ALDE party, can assist Arab liberal parties, and vice versa. Political campaigning is an activity that needs to be tailored to specific circumstances, but techniques and methods could be developed together. Established links, constant dialogue and cooperation between parties on both sides of the Mediterranean can help to create this culture of direct engagement by fostering longterm partnerships, which could serve as an exchange mechanism to share best practices and lessons learnt. Even if the electorate is slightly different, electoral techniques are similar. Additionally, this would provide a potent means to break the hindrance to liberalism and especially individual rights and responsibility in the Arab world: political tribalism. Cooperation through regional liberal networks is one method of achieving this, as well as the liberal ALDE groups active engagement with regional actors. Facilitating actors such as liberal foundations that also have vast experience in dealing with countries in transition play a crucial role as facilitators, connectors and communicators. A successful model for engagement would thus consist of liberal parties on both sides of the Mediterranean being connected through organizational vehicles such as the Friedrich Naumann Foundation for Freedom, using this vehicle to further expand and grow in their respective political space.

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Demography: including the entire populace

Institutional reform, as mentioned earlier, together with political campaigning, plays a central role in other relevant reform processes. Demographic realities in Europe and the Arab world vary to a large degree, yet measures and steps that need to be undertaken are very similar for both regions, bearing more relevance in the MENA region, as the demographic structure shows a younger population on average. The vast majority of the MENA regions population is under the age of 30. This demographic context provides for an immense opportunity for liberal political parties to engage with the age group that will define the regions future for the coming decades. This engagement needs to be of a continuous nature as opposed to being sporadic and linked to electoral cycles, as already mentioned, comprising youth in all geographic areas, both urban and the youth in rural areas. This requires work with and through youth movements and youth wings of liberal political parties in an organized and coherent manner. Concrete strategies are required that set out work plans that take into account geographic specificities, and link these youth organizations together on a national level through regular intra-party dialogue and exchange. A sense of togetherness, cooperation and the notion of working for a common, attainable future are strong motivational factors for young people to join national liberal political movements. Youth wings and youth organizations are feeder organizations for national political parties, and are imperative for generational change to occur, whilst ensuring generational continuity for political parties. At the same time, this will guarantee that within the framework of generational change, liberal values are entrenched in the political and social landscape. Especially after decades of authoritarianism, planting the seeds of liberalism in a region fraught with turmoil is a key factor in ensuring the success of liberalism in a context where the social and political make up has been dominated by tribal structures.


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Lastly, the role of women in public and political life must be supported. Through our dialogue with parties and activists in the region we see alarming signs concerning the deterioration of womens rights. Having initially played a fundamental role in the revolutionary processes, in some countries their rights are being systematically violated. Especially in Europe, women have proven to play a key role in positive societal change, and incorporating women in the Arab world in this process is essential in instilling liberal values in the region. Since women face certain restrictions in daily life in most societies, they could prove to be more receptive to the ideals of freedom. The same holds true for minorities their rights must be respected and they must be included.

The EU and liberal European actors

The EU, in particular the European External Action Service (EEAS), knows of the historic opportunity in the MENA region. They are equally aware of and in part bound by the different geopolitical interests of member states, other allies in the region, such as the US, and financially important players such as the Arab Gulf countries. The latter play a key financial and cultural role in the region in terms of exporting their brand of Sunni Islam, supporting state budgets, such as the Palestinian Authoritys budget, as well as financing some of the rebel groups in Syria and other organizations in the region, to name a select few. The long-standing influence of some Arab Gulf countries in spreading conservative interpretations of Sunni Islam has further expanded through regional revolutions that have swept to power conservative governments, consequentially increasing their influence even further. In this setting, the EU finds itself competing with other external players in each MENA country, thus impeding its ability to manoeuver. As much as the EU should remain coherent with regard to the values it is seeks to uphold, the measures it applies and the value system it seeks to export, the institutional set up of the Union can also play a hindering role. In part, the arising problem of policy

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consistency is related to the institutional structure of the EU. The distribution of decision-making powers in the field of foreign policy hinders the development of a unified and common approach in response to the Arab Spring. In this respect, it must also be mentioned that the EUs engagement is also negatively affected by the ongoing financial crisis of the Eurozone, which shifts resources and attention away from the Arab world. Therefore, increasing calls have been made for the use of conditionality1 as a tool to achieve greater coherence in EU policymaking in the region, as has been mentioned on numerous occasions in plenary discussions of the EP, especially in the context of discussions on the situation in Egypt. This is a particularly sensitive matter, with some EU stakeholders fearing that the use of conditionality will have an exclusionary effect for the EU as an actor in the Arab world. The reasoning follows the idea that placing conditionality on governments in a region where a plethora of international actors are actively involved, the EU will risk excluding itself and thus losing influence in its immediate neighborhood. Yet, clear red lines should be established in order for the EU to be able to continue to influence the reform process through policy initiatives, such as the support of individual NGOs, whilst retaining its credibility within the region. Losing credibility will have a negative effect on the EUs ability to project its values, not only in the Arab world but towards all external actors it engages with. For reasons mentioned above, the EEAS remains slightly reluctant to apply

To explain this concept, the definition used by Rosa Balfour will be applied: Conditionality refers to a complex set of issues including the ability to attach strings to demands, the linkages between political demands and economic incentives, the attraction and credibility of these incentives for them to be effective, the ability of the EU system, including its member states, to coordinate and deliver such incentives, and the relation between establishing general principles to govern conditionality and the need to devise tailor-made policies towards individual countries. Rosa Balfour, EU Conditionality after the Arab Spring, Papers Euromesco (2012) 16, IEMed. Retrieved on 5 June 2013 from:


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conditionality to its assistance programs, instead preferring to additionally address these issues and promoting peace, stability and the rule of law through the EUs special representatives for the Southern Mediterranean region and for human rights.1 The EU can also retain influence through its use of other soft power tools. The projects supported through human rights instruments, such as the European Instrument for Democracy and Human Rights (EIDHR) and funding to civil society actors, are tools that can serve to promote its value system as it has done over several years. Continued engagement between civil society and state and non-state actors is useful in cementing liberal values. Success remains limited, however, precisely because of the competing policymaking between the EU, on the one hand, and member states on the other. The EP can continue to play a role by continuing to set up political linkages through regular dialogue via inter-parliamentary meetings that the European Parliaments Delegations2 hold twice annually, as well as through other channels. As the EUs only democratically elected body, the EP can also hold other institutions to account through particular legislative measures regarding the EUs budget, debates with the EEAS in the plenary of the EP on matters of current importance, questions to individual institutions,

See: for more information on the EUs special representatives. The EU special representative for the Southern Mediterranean region is Bernardino Len. The EU special representative for human rights is Stavros Lambrinidis (as of June 2013). The European Parliament upholds its bilateral and regional relations with countries through its so-called Delegations. Delegations meet once per month in the European Parliament to discuss current affairs in the country or region in question. Twice annually it holds inter-parliamentary meetings with parliamentarians and other stakeholders, such as NGO representatives and members of the government, to continue bilateral dialogue and to address issues of mutual concern. I am personally member of the Delegation for relations with Mashreq countries Egypt, Jordan, Syria and Lebanon and Iraq, the Palestinian Legislative Council and Israel.

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adoption of resolutions by the plenary, and pushing for democratic accountability regarding the work of other EU institutions. Furthermore, the ALDE group in the EP has also promoted liberal values through dialogue with liberal political parties, engaging with NGOs and political activists, as well as regularly hosting liberal leaders in the EP to facilitate an exchange of information between MEPs and liberal stakeholders in the region.

This article sought to address current problems facing liberalism in the Arab world in a post-revolutionary context in order to explore ways to further promote liberalism through the vehicle of liberal political parties and actors in the region. The measures outlined above provide a solid basis upon which to promote liberalism in the Arab world, through creating functioning and efficient institutions to establish a basis for the development of an entrepreneurial middle class, which in turn will provide a solid anchor for the development of liberalism under the right conditions. However, the political reform process must include reform based on the respect of all liberal values, not only of economic liberalism. Further, political engagement with voters on all levels through active campaigning and with a clear electoral program ensures necessary exposure, which will serve to establish liberal party programs in the political arena. This political activity must particularly include engagement with the youth in light of the demographic realities in the region, which will be crucial for the entrenchment of liberalism in the Arab world. Liberal parties in the region must unite and work towards a common goal, otherwise they will continue to be sidelined in political processes and risk complete political marginalization. Lessons learnt by European liberal parties can serve as useful experiences in moving forward. The EU itself must find a coherent method of engagement with the region, and the EP and the ALDE


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group in particular can and must keep up its active engagement through the help of local liberal facilitators. If these steps are undertaken, then success in the promotion of liberalism in the Arab world lies firmly in our hands.

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A liberal program for the future: Guidelines for Arab and European countries
Mounir Rached
The concept of economic freedom was propagated as early as the mid-1800s, and in particular by economist and liberal thinker John Stuart Mill in his famous book, The Principles of Political Economy. There, he clearly stated that aside from internal and external security and law and justice, governments have failed in any other function. Then, he was calling for limiting the size of governments. In the Middle East, many voices have similarly called for economic freedom and limiting state intervention in economic activity, including as early as 1912, when well-known liberal thinker Ahmad Lutfi Alsayed defined the role of government and limited it to three basic functions. These liberal thinkers were not well heard by their respective governments. In the Middle East as well as in many other parts of the world, economic freedom has not and until now been very well comprehended. Freedom is not anarchy, and for freedom to be effective and real, it needs to be constituted. Government or civil government, to use John Lockes phrase is necessary. There is no real freedom without the state. The question then is: How much state, and how is it to be organized? Middle Eastern countries in particular have regressed over the years since independence. We have seen massive government economic intervention and takeovers that swept many countries, particularly Algeria, Egypt, Iraq, Syria, Libya, and nearly full ownership of natural resources in oil rich Arab countries. Although state intervention in ownership and pricing proved ineffective and deleterious in all cases, reform was partial, and in many ways acted


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as a placebo in order to convince not only their own public but donor countries (in the case of some) that reform is ongoing. In addition, governments feared the social implications of reform. In most cases, this was a hoax, as there was only damage from the unwarranted interference of such governments in every aspect of economic activity, including state monopolies in power production, transportation, strategic industries, banking and credit, capital flows, and labor movement. Larger government gave upper civil service echelons more power and wealth. Misconceptions about the role of the public sector have rendered the population in Middle Eastern countries passive. Even today, after the uprisings in many Middle East countries, the benefits of economic freedom are not well understood. The uprising was driven by tyranny, a quest for freedom, dire economic conditions, high unemployment among the youth, but didnt help define a new economic agenda. The Middle Eastern countries score very low on global freedom in almost all the five key indexes: size of government, legal framework, access to sound money, freedom to trade internationally, and regulation (FNF, 2012). These classifications, following the Fraser Institute, have been studied carefully and proven to provide a good measure of unnecessary government intervention. Without delving into the detail, I would like to provide some interpretation of these concepts, as they are extremely important and not well understood by both the public and governments in the region.

Middle East misconceptions

Often we hear that the public is exerting demands on the government in many areas, such as health, education, transportation, jobs, etc., with a strong belief that it is the governments obligation to provide such services. This perception has become a deflector as

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governments created dependence on them through mismanagement that inhibited growth development and employment. The interventionist policies of governments have been excessively damaging, which is why the Middle East draws wealth mainly from its natural resources. A typical quotation often heard from critics is that the exports of Singapore alone exceed those of the Middle East and North Africa (MENA) region combined, with oil exports excluded. With regard to the size of government, in all Middle Eastern countries, public enterprises are numerous, even in countries that are considered to enjoy relatively more freedom. For instance, public enterprises provide 22 percent of state revenues and at the same time absorb 20 percent of expenditure in Lebanon. In order to allow the public sector to operate in a non-competitive market almost all state enterprises in the Middle East are granted monopolies. It is believed that state enterprises can produce at a lower cost and a lower price since they are not profit motivated. To the contrary, nearly all of them operate at a higher cost. And in the case they charge lower prices than average costs, they eventually end up dependent on subsidies that are covered by taxes or government borrowing. Therefore, instead of the higher price, consumers pay taxes to cover the subsidy emerging from the higher operating cost of public enterprises, or pay in the form of higher inflation created by liquidity generated through borrowing. The critical issue is whether governments can use income in a better way than the private sector? Often its the private sector that can make the right decision to maximize its utility function. Taxes as well pose another serious problem. How much taxes should governments collect and in what form? Often Middle Eastern countries rely on regressive taxes that are applied to consumer products and imports. Such taxes deprive governments from using tax policies in order to attain better income distribution. What even more serious is that such taxes raise prices directly almost by the magnitude of the tax (depending on the elasticity of demand for the


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product), which in turn reduces real incomes and renders the economy less competitive in other products and services. Until today, we have governments calling for protection of domestic industry in order to preserve employment, but such policies breed inefficiencies in production and result in a dis-benefit for millions of consumers in order, supposedly, to protect a limited number of producers. Other misconceptions prevail, in particular towards the role of the banking system. Subsidizing credit creates several distortions; in particular, it creates a distribution issue of credit, it artificially reduces interest rates and instead of promoting investment as is generally believed to the contrary it suppresses investment as low interest rates dont encourage savings, thus creating a shortage of capital that is needed for investment. A suppressed credit market, therefore, achieves opposite results from those that are originally intended. Subsidized credit also distorts production and encourages allocation of resources to uncompetitive products, and creates a mismatch between demand and supply. Some governments in the region have been promulgating Islamic banking as a solution. Islamic banking is different from conventional banking and is being guided by Islamic principles, prohibiting interest charges that are perceived as usury. In Islamic banking, a depositor becomes a shareholder without a predetermined rate of return as in conventional banking. An Islamic bank also lends money, but it is a business agreement between the bank and the borrower. The borrower will run the business while the profit of that business will be shared between the bank and the borrower in a prefixed rate, documented in the original agreement. Islamic banks also provide services and charge money. Therefore, when agents deposit money in an Islamic bank, they become shareholders of the banks overall business. Islamic banking can coexist with traditional banking, but each plays a different role never mind that businesses should not be guided by religious principles. Without having a clear distinction between

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risk and return, capital markets become less efficient and banks global integration becomes constricted. Allowing competition in the banking sector is key to advancing intermediation. This includes countries opening their doors to foreign banking and to liberalize ownership of banks. Laws regarding proper auditing and misuse of funds that apply to corporations shouldnt be different from those that apply to banks. Banking is a service industry that matches savers with investors and with each bearing his own risk. Governments in the Middle East, meanwhile, have failed to provide full protection for property rights. Security of property rights protected by law is an unwaverable right. Enforcement of contracts by a properly running legal system is indispensable for the promotion of a liberal economic system. Another cornerstone of economic freedom is the freedom to trade internationally. Freedom of exchange across boundaries is a key ingredient of economic freedom. High tariffs, exchange rate distortions and capital controls inhibit trade and growth. The reasoning supporting free trade is very simple. As domestic trade and internal specialization promotes wealth and standards of living, so does international trade. If each household produces all its needs (which is impossible, given all the skills needed), the standard of living will remain low. Its not true that countries need to protect their markets from those foreign markets that have cheap labor. India has cheap labor but it is a net importer country, whereas Germany has one of the highest average wages in the world and its the largest net exporter in the world, exceeding that of China. A common misconception is that capital controls preserve capital from being taken abroad to benefit other countries. This is a fallacy, as when a country institutes controls on capital outflow, foreign capital will not flow in as well. It limits inflow of capital. Such a policy deprives a country of much needed capital (that normally is accompanied with advanced knowhow) otherwise not available in the country.


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Most countries that have restrictive labor regulations suffer from high unemployment. Minimum wage regulation is such an example of regulatory restraint that limits freedom in the labor market. It raises labor costs, renders an economy less competitive, and creates unemployment. Many types of labor market regulations infringe upon the economic freedom of both employers and employees. Employers should have the freedom to employ whomever they want, and have the freedom to agree on a wage with the employee. Rigidity in working hours and dismissal regulations and costs has hampered business initiatives and growth (Ben Nasser Al Ismaily et al., 2012). Governments should be concerned only with the production of public goods and provide government services related to law and order, and protecting property rights and providing security. These services and goods, in turn, determine public expenditure levels. Governments can have social protection programs; however, not at the expense of the performance of the economy and by suppressing job creation opportunities. Social programs should be targeted and not based on broad-based subsidies.

The outcome of existing misconceptions

These prevailing impediments in the Middle East have had a visible impact on the growth of private investment, with the region less successful in attracting foreign direct investment (FDI) than other regions, except in the hydrocarbon sector. This by itself signals the lack of opportunities for foreigners to invest, the unattractiveness of local business, ineffective bureaucracy, and the perception of higher risk. And most FDI outside the energy sector has been directed to non-tradables: typically tourism, telecommunications, and real estate, with a little to export-oriented manufacturing. Even domestic investment has flowed predominantly into non-traded sectors (World Bank, 2009). These trends weakened growth and employment opportunities, especially for the educated youth. They also suggest that the

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regions countries may be suffering from Dutch disease, with investment flowing to non-tradables due to low and declining competitiveness of tradable manufacturing sectors. Among all indicators, weak exports are a strong reflection of the potential of the Middle East countries private sectors to sustain economic growth. Based on research, it is beyond doubt that diversified exports were evidence of sustained and strong growth in fast growing economies. Nearly every episode of long-term sustained growth has had exports as a prime driver. Middle East countries dont show yet strong signs of non-oil export growth and diversification that increases competitiveness in global markets. Even in Middle East countries that improved their exports, the technological structure of their exports weighed towards resource-based and low technology products. This unfavorable performance is a reflection of the following key factors embedded in economic freedom indicators: The macroeconomic environment: inflation, interest rates, and terms of trade The degree of market openness: trade openness, the regulatory barriers to entry and exit of firms from the market The protection of property rights: the judiciary and the enforcement of court decisions The nature of factor markets: labor markets and skills, capital, land, infrastructure and information

These factors affect a firms performance and behavior through different channels. They affect the cost of doing business, the uncertainty investors face, and the competition and the market structure firms face.


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Guidelines for a corrective blueprint

A principal indicator of freedom is freedom from government. A reform plan to liberalize an economy should have a clear vision of the size of government. If the function of government is not well defined and understood, then a liberal reform program cant be designed and achieved. As stated previously, government function should be limited to the provision of the following: law and order, property rights, and public goods, and external security. The government should make enough room for the private sector to use its resources effectively, both capital and labor, dependent on freely operating markets for the distribution and allocation of goods and services. Evidence supporting the benefits of this approach is outline in nearly in all relevant research; numerous studies that have proven the effectiveness of free markets. Once the role of government is well defined, along with what public goods should be produced, the share of government in economic activity can be easily determined. This means that the consumption share of government can be quantified. A country can draw on many cases in order to be able to define the size of its activities. For instance, what is the optimal size of the police force per, say, 1,000 residents? Similarly, the size of the court system can be determined. Recent economic research on the size of governments has not taken fully into account the concept of optimality. The concept of government size has to determine the size of governments current spending/consumption of goods and services. In most Middle Eastern countries, public consumption constitutes a larger than optimal magnitude and its effective level is often concealed through suppressed wages and salaries, or controlled prices. Another expenditure item, transfers and subsidies, is not well managed in almost all countries in the region, both in terms of its size and allocation. Subsidies have been used in two forms and both are equally harmful. Price subsidies, especially in utilities (power and water) and transportation, are widespread. Their negative implications have been researched and compared to their relative

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benefits. In many countries, Lebanon for instance, subsidies to electricity are 18 percent of the budget; yet Lebanons consumer cost of power production, and capital spending, is one of the highest in the world. The other form of subsidy consists of direct transfers that often has not been well managed and has been applied in a discretionary manner, in providing health services, in aiding certain industries and farm products, etc. Substantial savings can be realized by targeting subsidies and cutting spending in general. Most governments dont have a proper wage policy and public sector wages are not linked to market indicators. Focus should be on effectiveness and efficient return versus cost. Governments should weigh the cost-benefit of fewer civil servants with higher wages compared to the current situation where most governments have an excess of employment combined with significantly lower salaries than the private sector. Countries should develop their social programs, such as pensions and health insurance. These protective instruments should be self-financed rather than being a burden on the budget. Employees should carry most of the cost of these security schemes, instead of employers. Wage compensation should be transparent and fully monetized (International Labour Organisation, 2012). Once the role and size of government is properly determined, a government then has a guideline that allows it to determine the size of taxes to be collected to cover spending. The tax issue will then have two components to be determined: size and composition. The latter implies how best to collect taxes and from what bases. Should it be income based or consumption based? Each type of tax has its advantages and disadvantages. Income taxes can be progressive and aid a government in reducing inequality among its citizens, while consumption based taxes are regressive but more effective in collection. The decision process and optimal taxation has been researched extensively and governments can be aided by these principles to determine how best to collect taxes and which tax is more efficient, including cost of collection relative to total revenues. In principal,


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taxes should be balanced and few, based on broad tax bases. Today, most governments, including many European countries, have numerous and overlapping taxes with extensive exemptions. Property rights and a modern efficient legal system are an indispensable component for an economy to move forward and to attract foreign investment. These are not difficult to design and apply. Free trade has proven to benefit all countries, and as we realize that domestic trade provides efficiency in the use and allocation of resources, so does international trade. The classical economist David Ricardo introduced the theory of comparative advantage over two centuries ago, concluding that a country can benefit from trade even if it has an absolute advantage (relative to other countries) in the production of all of its goods. He refuted Mercantilist thinking that a country should export more and import less. A country can easily reform its trade (and trade taxes) policies; China, Asia, and Latin American are moving on a fast track with open trade being the main ingredient in their modern policies. Ricardo had another important theoretical contribution to add, which is referred to as the Ricardian equivalence which is inter-temporal optimization by taxpayers. If deficits are financed by borrowing, taxes are expected to rise, to pay for debt. Governments have to have sound monetary policies, as debt can be monetized and reduces a countrys competitiveness and hinders trade and growth. Finally, an effective regulatory system in financial (credit) markets, labor and capital markets, as well as an effective system of business regulations, are highly essential to move forward. Monopolies are created by governments and dont evolve on their own; the minimum needed is: Credit should be available without discrimination Interest rates should be market-determined only Wages and prices have to be market-determined Apply nondiscretionary licensing

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Reform is not an impossible task. Eastern Europe dismantled a complex controlled economy and today it is moving forward in just less than two decades. In the Middle East region, we have countries hold to bad polices year after year (like bread subsidies in Egypt), and still believe its optimal. What is needed is full comprehension of reform, determination, and a transition mechanism that may take many forms. Countries should seriously consider smooth transmission processes. The alternative, through revolution, may be very costly and will take much longer to bear fruit.

Eliminating discretionary practices

Rules, policies and regulations and the way they are applied and enforced by the relevant public institutions matter for investors, and subsequently for growth. Expectations about the future and the credibility of governments in reforming the rules and implementing them are also taken into consideration. It is not surprising that many growth acceleration measures followed changes in the political regime, such as in the case of Eastern Europe. In Middle Eastern countries, as well as in other countries, it may not necessarily be the rules and regulations that only matter, but also how they are applied. For many of the regions countries (and according to the World Bank), the diagnostic evidence points to a gap between the rules and how they are implemented, which in turn has made the private sector reluctant to respond positively to reforms that were considered as promoting private sector growth. Private investment, for instance, has been less responsive to reforms in the Middle East than elsewhere. Symptoms show that the business environment is not the same for all investors and firms. Barriers to competition are advantageous to older firms and more seasoned businesses in general. The business sector and the business environment have not improved to a degree commensurate with the reforms measures taken during the past two decades.


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In many countries, a central problem is the unpredictability of laws and regulations affecting enterprise investment, operations and employment. Improved policies may not overcome inept or discretionary application of reforms. There are countless examples in many if not all Middle Eastern countries of administrative weaknesses, ranging from inconsistent to unpredictable interpretation of rules and regulations. For instance, in Algeria, Morocco and Lebanon, more than 50 percent of investors complain that the regulations are interpreted inconsistently or unpredictably. Unequal implementation of policies has taken place in all areas of the business environment, including: trade, entry and exit, regulations, product market regulations, and factor and labor markets. Therefore, what is needed is good policies and good implementation. A prelude to that is full comprehension of the relevant economic factors and how they operate, and strong determination in order to be able to institute transition.

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Ben Nasser Al Ismaily, Salem, Azzan Al-Busaidi, Miguel Cervantes and Fred McMahon, Economic Freedom of the Arab World: 2012 Annual Report (Cairo: Fraser Institute, 2012). The World Bank, From Privilege to Competition: Unlocking Private-Led Growth in the Middle East and North Africa, (Washington, DC: World Bank, 2009). International Labour Organization, Rethinking Economic Growth: Towards Productive and Inclusive Arab Societies, (Beirut: ILO Regional Office for the Arab States, 2012).


Bridging the Gap

Bridging the Gap Giulio Ercolessi


Giulio Ercolessi is a member of the Board of Directors of the European Liberal Forum and the author of the book LEuropa verso il suicidio? Senza Unione federale il destino degli europei segnato (Europe towards Suicide? Without a Federal Union the Fate of Europeans is Inescapable) and other published essays. As a member of the board of LibMov (a newly-born organization aimed at reassembling Italian liberals), he is one of the initiators of and represents the major umbrella organization of Italian advocates of separation of state and religion in the board of the European Humanist Federation.

Dr. Hala Mostafa

Hala Mostafa is a liberal political commentator with the Al-Ahram Foundation and the former Editor-in Chief of Al-Ahrams (Egypts largest newspaper) political quarterly Democracy Review, issued from 2000 to the present. In her professional career, Dr. Mostafa has held many positions, including director of the Political Department at the Al-Ahram Center for Political and Strategic Studies. She is a Member of Casa Arab (under the Ministry of Foreign Affairs, Madrid, Spain), the Arab Thought Forum (Amman, Jordan), and the Advisory Board of Al-Ahram International Political Journal Relations. She is the author of many books, policy papers and articles and received her academic honors including a PhD in comparative politics from Cairo University.

Prof. Dr. Aristides N. Hatzis

Aristides Hatzis is professor at the University of Athens and the National School of Judges and is a renowned expert in the fields of law and economics. Professor Hatzis has taught in excellent institutions, among them Chicago University, Yale and Witten/Herdecke University in Germany. He established The Greek Crisis Blog and is a member of the Scientific Advisory Board of the Hellenic Foundation for European and Foreign Policy (ELIAMEP) and of the Advisory Board of the Society of European Contract Law. He is a fellow of the European Law Institute in Vienna and a member of the Steering Committee of the European Network for Better Regulation. Additionally, he is a practicing attorney in Greece.


Bridging the Gap Prof. Dr. Asteris Huliars

Asteris Huliaras is professor of comparative politics and international relations at the Department of Political Science and International Relations of the University of the Peloponnese, Greece. He specializes in North-South relations, international development assistance, African politics and foreign policy analysis. His research agenda is interdisciplinary, combining politics, international relations and development economics, and focuses on Africa and Southeast Europe. His work on these issues can be found in several peer-reviewed publications (books, articles, research reports and conference papers). He has a record of advising the Greek government and other major institutions (NATO, Human Security Network) on public policy and other subjects. He is the editor of the Hellenic Political Science Review and vice president of the Governing Board of the Hellenic Political Science Association.

Dr. Yusuf Mansur

Yusuf Mansur is an advisory committee member at AIESEC and the CEO of EnConsult in Amman, Jordan. He is specialized in economic consulting in the areas of policy, trade, antitrust, competitiveness and strategy. In his career, he worked as a CEO for the Jordan Agency for Economic Development and the Jordan Investment Board. Within the Jordan Upgrading and Modernization Program, Dr. Mansur worked as an international industrial upgrading adviser. He has also engaged with the UNDP where he supervised and coordinated all UNDP activities in Kuwait, and held the position of DR with the Jordan Telecom Regulatory Commission. Dr. Mansur received his MBA with honors from the United States International University and his PhD from the University of Oklahoma.

Prof. Dr. Andrzej Kondratowicz

Andrzej Kondratowicz holds a Ph.D in economics from Warsaw University and an M.A. from State University of New York. Currently he teaches economics at the SWPS University of Social Sciences and Humanities in Warsaw and is a member of the Forecasting Committee of the Polish Academy of Sciences. He sits on the boards of the Society of Polish Economists and the Adam Smith Research Centre in Warsaw. He is a Polish representative to the World Economic Freedom Network. His recent research concentrates on theory and measurement of economic freedom, selected aspects of institutional economics and the public sector, including good governance, and the SME sector.

Bridging the Gap Mohamed Tamaldou


Mohamed Tamaldou is a member of the Union Constitutionelle from Morocco and a founding member and former president of the Arab Alliance for Freedom and Democracy (AAFD, formerly Network of Arab Liberals), which comprises of Arab liberal parties and organizations. Mr. Tamaldou currently serves as vice president of Liberal International and treasurer of the Arab Center for Scientific Research and Human Studies in Morocco. He is author of several studies on the Arab world and has translated a variety of books from French to Arabic.

Sven Speer
Sven Speer is the founding chairman of the Forum Open Religious Policy, an advocacy network campaigning for the opening of the state to all religions and secular outlooks. He is a scientific staff member at the German Bundestag focusing on integration and Islam. He has worked at the Institute for Migration Research and Intercultural Studies at the University of Osnabrck and the Cluster of Excellence Religion and Politics at the University of Mnster. He was a fellow with the Friedrich Naumann Foundation for Liberty and with the German Marshall Fund of the United States in Washington, D.C.

Alexandra Thein, MEP

Alexandra Thein is a German politician and member of the European Parliament with the Free Democratic Party of Germany, and a member of the Alliance of Liberals and Democrats for Europe parliamentary faction. She entered politics with her first run for public office in 2009, when she was elected to the European Parliament. She sits on the European Parliament's Committee on Legal Affairs as a member, and in the Committee on Constitutional Affairs as a substitute member. She is a member of the Delegations for relations with the Palestinian Legislative Council and with Iraq, and a substitute member of the Delegation for relations with Afghanistan.


Bridging the Gap Dr. Mounir Rached

Mounir Rached is the vice president and a founding member of the Lebanese Economic Association (LEA) since 2007. Recently he was an economic advisor to the Ministry of Finance of Lebanon and worked primarily on budgeting and tax evaluation. At LEA he worked on several projects, including evaluation of the Paris III reform plan, tax reform, debt management, pension reform, privatization and public sector reform, trade agreements (WTO in particular). He is a consultant to several financial institutions as well as regional and international organizations, primarily in public financial management, policy evaluation, and financial programming. Between 1983 and 2007, he served at the International Monetary Fund (IMF) where he focused on the Middle East, Africa and the Caribbean. He was primarily engaged in country economic analysis, policy evaluation and design of IMF conditionality. He spent several years at the IMF Institute for Capacity Building where he was engaged in training and designing training programs in economic and financial analysis. He also served as IMF resident representative for Africa and the Caribbean.