Business Against Democracy
A new book details the political choices of big business in the Egyptian and Tunisian transitions
Robert Kubinec, Making Democracy Safe for Business: Corporate Politics During the Arab Uprisings (Cambridge University Press, 2023)
Crony capitalism was one of the defining features of MENA political economy in the years leading up to the Arab uprisings (if you haven’t read Amr Adly’s great book on the Egyptian version, you should). The protest movements which swept the region often directly targeted those arrangements tying big business to authoritarian regimes, as economic reforms enriched a few well-connected elites while impoverishing wide swathes of the population. At the same time, those politically connected economic elites felt understandably threatened by the potential impact on their interests (or worse) from genuinely revolutionary change.
While there’s obviously been a huge amount of great scholarship on the political economy of the region, and on the structural connections between business and authoritarian politics, there’s been surprisingly less work focused on the political behavior and decisions of the business class itself (for exceptions, see classic books like Pete Moore’s 2004 Doing Business in the Middle East and the more recent fantastic collection Crony Capitalism in the Middle East edited by Ishac Diwan, Adeel Malik, and Izak Atiyas). In his incisive new book Making Democracy Safe For Business, Robert Kubinec focuses specifically on moments of sudden, unexpected regime change where business elites needed to navigate revolutionary uprisings which threatened to overthrow not just long-ruling leaders but the entire system by which they turned political connections into economic opportunities.
Kubinec articulates the dilemmas of business elites in Tunisia and Egypt’s 2011 uprisings and subsequent transitions very clearly and effectively. Where political science might in other conditions expect business elites to push for democratization — that whole middle class demanding a political seat at the table thing — in these cases only well-connected businesses could thrive. Crony capitalism meant that big business both benefited from and remained existentially dependent upon the regime, which controlled access to contracts, raw materials, licenses, markets, finance and everything else needed to survive. When such regimes were suddenly toppled by popular mobilization, big business elites might like the idea of democracy in principle (I mean, they might), but at a concrete level they were more likely to see the threats. The cost of doing business would go up as they needed to figure out who to bribe. The cozy political and personal relationships with regime elites and state bureaucrats that gave them access and market dominance might not help if those figures were purged. And should there be an actual revolution and real regime change, the crony capitalist class might itself be the target of investigations, lustration, and prosecution for corruption. So the stakes were high.
After establishing the similarities between Egyptian and Tunisian business politics, Kubinec focuses much of the book on explaining key differences in their response. At one level, the outcomes look the same: those businesspeople for the most part rode out the storm, aligned with authoritarian political forces, and found their place in the new order. But in key ways, the two cases look remarkably different, with highly significant implications for the overall political trajectories of the two countries. Put simply, Kubinec argues that Tunisian business worked all sides of the political arena, looking to support whoever might benefit their interests, while Egyptian business found itself dragooned into supporting an economically expansionist military even where that harmed their bottom line.
Kubinec’s argument is built around the logic of different forms of rent seeking. In general, he argues, businesses prefer broad rent seeking, keeping their options open to work with anyone inside the bureaucracy (or outside of it) who can deliver what they need to make money. They don’t want to openly commit to one party, because the other party wins then they might be shut out of the market access and opportunities they need. But sometimes, the configuration of power creates a situation where businesses find it necessary to instead engage in narrow rent seeking — offering political and financial support to one party because it, literally, is the only game in town.
After the 2011 revolution, business elites connected to the Mubarak regime had good reason to think that they might be targeted. A few of them actually did face investigations, though not as many as revolutionaries would have hoped. Their efforts to stand up political parties to contest the Parliamentary election largely failed, showing them a bleak political horizon. And so their support for the 2013 Tamarod movement and the July military coup isn’t that hard to explain. Kubinec convincingly argues that Egypt’s military after 2013 then forced businesses to fall into line and support the Sisi regime because of its total domination of the political landscape, which meant that there was no room for hedging: nobody else was going to take power anytime soon, and a failure to be on the team would be noted. Beyond the standard political repression and violence, Sisi’s military regime had specific leverage over big business through its control over the bureaucracy and the spread of its own economic interests. It wasn’t only the military’s political domination and repression following the coup which kept them in line, although that did leave them with He draws on the meticulous work of scholars like Yezid Sayigh, Amr Adly and Shana Marshall to show the rapid expansion of the military into every niche of the economy.
In Tunisia, by contrast, businesses played all sides, building connections with anyone who could deliver the export/import licenses, materials, and markets they needed. Ennahda’s Islamist ideology wasn’t much of an obstacle to their pursuit of crony or clientalist connections to keep their businesses running. Some did get into politics, setting up TV stations or financing politicians; many aligned with the Nidaa Tounes coalition. Kubinec’s account of the rapid splintering and political failure of Nidaa Tounes is essential reading; he makes a compelling case that divergent interests among the business community, and the absence of any powerful broker able to harness them into a single project, explains the weakness of what on paper looked like a prototypical authoritarian coalition.
Kubinec supplements his research and interviews with extensive use of an increasingly popular, though controversial, method entailing targeted Facebook ads to enlist online survey participants. This offers at least some insights into the experiences of businessmen across multiple sectors, including their increased exposure to petty corruption and their general disinterest in ideology. There’s a lot more to be said about this dimension, and I’ll be talking about it soon in relation to another recent publication. Enough for now!
Making Democracy Safe for Business is a really impressive addition to the literature on business and politics in the Middle East, and adds a new perspective to the familiar Tunisia-Egypt comparison. Highly recommended!