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Article Excerpt
Democracy in the Middle East has been in the spotlight of the world media for a number of years now. Along with the ever-growing international debate on the importance of democratizing political systems around the globe, questions such as how seriously the Arab countries take the calls to adopt real democratic practices and how far they have gone in implementing political reforms continue to arise. While some signs of change have apparently emerged, these questions remain difficult to answer, even for practitioners in the field.
In a broad sense, democratic societies are defined by the adoption of political practices such as public debate, freedom of speech, elections, representation, transparency and accountability, as well as consensus building and active decision making. However, a broader definition of democracy also encompasses attributes of economic democracy such as economic justice, property rights, freedom of contract, broad access to information and education, and poverty reduction. (1) This view is strengthened by the correlation among political democracy, economic freedom, governance and the private sphere. In fact, it is said that the institutionalization of economic reform and corporate governance around the world is one of the fundamental challenges of promoting democracy and economic stability. A link has also been identified between democracy and economic growth, especially when proper governance mechanisms are prevalent. (2)
Focusing on the economic, financial-market-development and governance aspects of these issues, this paper further explores some of the reforms being introduced in the region that are expected to pave the way to real democracy. In particular, we attempt to answer the following questions: (1) What types of reforms are being undertaken? (2) How do these reforms relate to democratization? and (3) How would they eventually trigger the need for reforms at the political level?
Transition to democracy is not easy or fast, and the road chosen to introduce and implement democratic and political reform varies across countries. However, certain prerequisites, such as a strong will at the authority level and awareness of the importance of such reforms at both the ruling and public levels, remain the common ground for any move in this direction anywhere in the world. The commitment of politicians and policy makers, the motivation of government employees, the introduction of entrepreneurship and dynamism by profit-seeking risk takers, and the implementation of a democratic process for citizens are crucial for reform implementation. (3)
In fact, a closer look at the Arab countries suggests that many of their ruling elite show a will to forego some of their power over economic interests and to encourage the participation of the private sector and ordinary citizens in the process of wealth creation to alleviate poverty. This is being achieved through the privatization programs that are currently in progress in a number of the Arab countries and the continuous development of the region's financial markets.
The countries of the region also seem eager to liberalize and expand their economies and markets and attract international capital flows. As much as these markets appeal to international investors, the achievement of these ends and the ability to sustain them place regulators under pressure to establish well-governed financial markets. Consequently, a culture of sound corporate governance, where shareholders ensure that they are treated equally, their rights are respected, their best interests are pursued by directors and managers, and transparency and disclosure rules are imposed, will gradually emerge among all market participants. Citizens will come to realize that their rights as shareholders in companies are to a large extent equivalent to their rights as nationals in their countries. This is in line with Gompers, Ishii, and Metrick's (4) description of companies as republics in which the rights of shareholders mirror those of citizens in their nations, and the fiduciary duties of boards of directors and managers, respectively, resemble to a great extent those of parliamentary members and ministers. Thus, citizens will learn to adopt an active, rather than a passive, role in their countries. Consequently, an awareness of democratic practices will become prevalent among the communities of the Arab countries. These include the right to elect representatives who are accountable for acting according to the will of the people and responsible for delegating decisions to ministers and examining the performance of the government. An environment in which citizens have the power to hold ministers and governmental authorities accountable and to replace them when necessary is regarded as a democracy. In such a setting, citizens would also press to be allowed to express their opinions freely, have access to transparent information on the activities of governmental and public institutions, and impose disciplinary actions on corrupt behavior. In the Gulf Cooperation Council (GCC) countries, improvements at the public level have already started to take effect. According to the World Bank, regulatory quality and control of corruption are two aspects of public governance that have particularly improved. Over the past decade (19962006), the two measures respectively increased from averages of 0.44 and 0.11 to averages of 0.54 and 0.69 for the GCC countries. (5)
FACTORS HINDERING DEMOCRACY
An overwhelming majority of Arab countries have been lagging behind in the practice of democracy for many reasons. Countries within the region were believed to be reform resistant and to have little hope of moving toward democracy because they lacked the required democratic experience. Kedourie states that constitutional rule in the region is hindered by the fact that the people are accustomed to "autocracy and passive obedience." (6) To Cantori, the region is characterized by narrow political and economic power interests and lacks means of political transition. (7) Deegan considers that the countries of the Middle East are "weak institutionally; divided ethnically; tethered to authoritarian structures of government; and lacking in unity, political legitimacy and tolerance of opposition." (8) Furthermore, Richards claims that the low dependence of these countries on their communities and the sufficient resources available to the authoritarian governments have undermined incentives for reform and hindered the transition to democracy. (9)
In addition to serious social problems such as unemployment and poverty, Richards cites the lack of accountable governance structures and corruption as key detriments to democracy in the region. (10) These factors reflect the close ties among democracy, governance and anti-corruption. Marquette notes that good governance, or good government, is equivalent to democratic government. (11) The relationship between governance and democracy is also revealed in Leftwich's definition of good governance as including "some or all of the following features: an efficient public service; an independent judicial system and legal framework to enforce contracts; the accountable administration of public funds; an independent public auditor, responsible to a representative legislature; respect for the law and human rights at all levels of government; a pluralistic institutional structure and a free press." (12) Corruption, on the other hand, is defined as the abuse of power resulting in the reaping of benefits at the expense of the rights of an individual, a group or the whole society; the making of public institutions controlled by private interests; and the hindering of the transparency of governmental operations. (13) The high levels of corruption in Morocco, for example, have also long been caused by the concentration of wealth and economic power, the meager scrutiny of public affairs and dealings, and the favoring of officials and entrepreneurs who hold close ties with the monarchy in terms of unfair advantages and non-transparent business transactions. (14)
SIGNS OF POLITICAL CHANGE
In 1998, Kamrava argued that democratic governance in the Middle East is hard to attain because the necessary social and cultural dynamics do not exist. (15) Yet since...
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