Independent in All Things, Neutral in Nothing

The Importance of Institutions: Analyzing the Egyptian Case

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The Middle East, from the Persian Gulf to the Maghreb, is currently in the throes of revolution.  Western journalists, in my opinion, suffering from myopia, are celebrating these revolutions as “the next 1989,” a series of revolutions that overthrew the political order in an entire region—the Eastern Bloc—and created a new world order in its place.  Let us examine this claim, with an eye toward institutions.

Institutions matter.  They shape the underlying constraints and interactions between people.  They determine and engender political participation, economic growth, and civil society.  Institutions are “path dependent,” in other words, decisions made today constrain the possibility for future decisions or institutional adaptation due to “sunk costs” and expended resources.  Most importantly, institutional change and adaptation is predominantly an endogenous process, receptive to the underlying incentive structure.  To be sure, occasional exogenous “shocks” can change institutions, but these are not as frequent as the organic change of institutions, through people’s interactions with them, the political bargaining process, economic exchange, and civil society.

In the Egyptian case, Mubarak claimed power 30 years ago in a military coup.  Any regime dominated by a small cadre of people over time will eventually use the position to enrich themselves.  For instance, Muammar Ghadafi, President of Libya, was once a vociferous pro-Soviet revolutionary.  Over time, however, revolutionary zeal fades; after a while, it is difficult to maintain its relevance.  Once this zeal fades, two related and motivating factors present themselves: power and avarice.  A noticeable arrogance accompanies a long rule based upon power (Ghadafi is a case in point).

Thus, a classic case of kleptocracy characterizes the regimes and individuals of the region.  Add nepotism to the list.  Most of these leaders planned to maintain family power and money by installing their sons as political heirs, and Mubarak was no exception (ultimately, many senior members of the military rejected the idea of Mubarak’s son, Gamal, taking over).  Revolutionary movements are now staring in the face a generation of leaders who were once genuine revolutionaries.  Yet, if anything, these movements are in response to regimes and particular individuals who have remained in place for an extraordinary amount of time.

Mubarak held power through a state security apparatus that ultimately played the ambitions of military and police officials off one another.  The military was immensely powerful before Mubarak’s coup, and he augmented its power in a path dependent manner.  The military performed his ouster; they will rule the country until elections take place in September.  This is important because it makes the military the strongest organization presiding over Egypt’s political institutions, and any endogenous change that occurs before the elections will likely be minimal.  Many of the same leaders continue to have their hands on the levers of power and influence.

Rhetoric is finite.  It only goes so far, and nothing about the underlying institutions, power dynamic, or incentive structures has changed in Egypt.  Unless something drastic happens in Egypt, this is a perfect setup for a change in face only.

Given the emphasis on institutions, institutional change, path dependency, and underlying incentive structures, which are more “hidden” than the probe of many journalists, the Middle East faces a situation more analogous to 1848.  In that year, revolutions known as “the Spring of Nations” spread throughout Europe, sparked by the French Revolution of 1848.  They ended in utter failure.  The state quashed most of these revolutions, or quelled them via elite concessions (much to the chagrin of Karl Marx and Friedrich Engels, who collaborated to pen the Communist Manifesto just months earlier).  Similarly, the Middle East will not experience massive regime changes as in 1989, but the effects will not be ephemeral, either.  I surmise that like 1848, the case of Egypt will not transform the Middle East, but it will plant seeds that may germinate in the coming decades.  Given the staid, path dependent reliance upon the military and the security apparatus for control in Egypt and other Middle Eastern regimes, these seeds may portend democratic, but not liberal revolutions.


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