Maha Yahya
50 μ¢¤³£ ¬μμ¬
Iran’s Mohammad Reza Pahlavi, who
could provide political stability and pro-
tect Western interests.
This attitude changed after 9/11.
Drawing on the work o international
experts, such as those at the £², U.S.
policymakers concluded that the ex-
tremism emanating from the Middle
East was, in part, a byproduct o the
Arab world’s dismal development
record: its repressive governments,
entrenched inequalities, and stagnant,
state-managed economies, which denied
opportunities to ordinary Arab citizens.
Democratizing the Middle East and
unlocking the human potential o its
citizens were touted by the Bush
administration as a justiÄcation for its
wars in the region. After invading
Afghanistan in 2001 and Iraq in 2003,
the United States cast its subsequent
occupation o both countries as an
extended exercise in democracy build-
ing. Bush announced the broader
freedom agenda for the Middle East,
creating programs, such as the Middle
East Free Trade Area Initiative, to
promote free markets and the growth o
civil society.
The freedom agenda did not work
out as planned. After the United States
deposed the Iraqi dictator Saddam
Hussein in 2003, Iraq sank into a
decade o civil conÁict that combined
an anti-U.S. insurgency with a regional
proxy war. This led to a decline in many
o the key development indicators that
the £² had identiÄed as the source o
Iraq’s problems. But the Middle East’s
diculties went deeper than this
high-proÄle debacle. Throughout the
Ärst decade o this century, the authori-
tarian bargain that had long been the
foundation o the region’s governments
began to come undone. During this
period, the region came to be deÄned
by three key trends: growth without
well-being, lives without dignity, and
liberalization without freedom.
On the economic front, many Arab
countries, encouraged by experts at
institutions such as the International
Monetary Fund, began to privatize
state-owned Ärms, liberalize their trade
policies, and end price controls in an
eort to spur growth and reduce budget-
ary pressures on the state. In Egypt, for
instance, the share o people employed
by the government dropped from 32
percent in 1998 to 26 percent in 2006.
Yet although these policies produced
some growth, they did not result in the
sort o “trickle down” prosperity prom-
ised by their architects. Instead, well-
connected insiders captured nearly all the
beneÄts o these reforms. In Tunisia, 220
Ärms aliated with the family o Presi-
dent Zine el-Abidine Ben Ali captured
close to 21 percent o all net private-sector
proÄts between 2000 and 2010—a fact
that was revealed only when the Ärms
were conÄscated after the revolution
that began in late 2010. State-connected
Ärms also managed to evade $1.2 billion
in import taxes between 2002 and 2009.
A similar pattern held in Egypt and
Lebanon, where insider Ärms were able
to secure lucrative contracts for housing
and construction projects and receive
government licenses to invest in key
sectors, such as oil and gas and banking.
As part o this push to liberalize their
economies, Arab states also ended their
employment guarantees and scaled back
on the provision o public services,
education, and health care. This led to
declining living standards among large
swaths o the region’s middle class,