Patrimonial Legacies and Social Organization: The Constraining Effect of Embedded Norms on Institutional and Economic Development in the Kingdom of Saudi Arabia

This thesis contributes to the body of literature that attempts to identify the reasons behind the long-standing inability of various Middle Eastern and African states to implement the international guidelines of sustainable economic development. By integrating the findings of historical sociology, rentier state theory, and political economy within the New Institutional Economics framework, it opens a path towards explaining the relative resilience of some developing autocratic regimes to social change and consolidation of impersonal markets. For this purpose, the Kingdom of Saudi Arabia has been selected for a case study as, more clearly than others, it demonstrates the remarkable ways in which traditional social norms can be appropriated by the leadership and constrain institutional development. At the center of the historical narrative, the work puts the concept of patrimonialism as an informal system of embedded customary rules that fundamentally enhanced the chances for...Show moreThis thesis contributes to the body of literature that attempts to identify the reasons behind the long-standing inability of various Middle Eastern and African states to implement the international guidelines of sustainable economic development. By integrating the findings of historical sociology, rentier state theory, and political economy within the New Institutional Economics framework, it opens a path towards explaining the relative resilience of some developing autocratic regimes to social change and consolidation of impersonal markets. For this purpose, the Kingdom of Saudi Arabia has been selected for a case study as, more clearly than others, it demonstrates the remarkable ways in which traditional social norms can be appropriated by the leadership and constrain institutional development. At the center of the historical narrative, the work puts the concept of patrimonialism as an informal system of embedded customary rules that fundamentally enhanced the chances for survival of the pre-state Arabian communities. In order to assess the extent to which it shaped the subsequent evolution of institutional matrix and its particular societal incentives until the most recent form, the author traces its institutional, organizational, and economic manifestations over a century of state building process from its tribal origins. Based on the analysis of historical sources it firstly argues that the centralized hierarchic distribution has characterized the social organization long before the discovery of oil, though it heavily depended on secondary elites due to the material shortage at that time. While the oil-related fiscal surpluses enabled expansion of the allocation state and diminished the influence of elites on policymaking, the pre-state governance structures were instrumentalized for personal interests of the autocratic ruler and gradually emerged as the cornerstone of modern institutional environment. This allowed for neopatrimonial strategies of co-option and domination that helped to enlarge the social hierarchy during the fiscal surplus and sustain it over crises. Accordingly, the following process tracing analysis demonstrates this correlation by analyzing the significant legislative decisions and personnel shifts of the Council of Ministers between 1953-2018, and compares them to the macroeconomic developments. Although there are occasional disruptions caused by exceptional external or internal events on one side and, increasingly, authoritarian learning on the other, an apparent pro-cyclical pattern stands out throughout the study, in which the weakness of distributional networks leads to greater institutional and organizational concessions that in turn facilitate decentralization and socio-economic development. Thereby, the author urges for an alternative approach to economic reforms in the Gulf, pointing out the significance of institutional reform for an actual change towards an effective, market-based and sustainable development, and warning from socio-economic impacts of further centralization.Show less

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Patrimonial Legacies and Social Organization: The Constraining Effect of Embedded Norms on Institutional and Economic Development in the Kingdom of Saudi Arabia