Is improving economic conditions for Palestinian Arabs conducive to peace?

Is improving economic conditions for Palestinian Arabs conducive to peace?

No, the opposite is true! A landmark study on the subject indicates that the prerequisite for Peace-seeking is not better economic conditions but rather democratic forms of government. Since most Arab countries are far removed from multi-party democracy (see table above), the conditions are not ripe for overall peace in the Middle East. The study concludes that "making  inherently aggressive dictatorships of the region more prosperous will not make them more pacific only more powerful" and more willing to pursue armed violence (see article). This is true not only for conflict with Israel but for Intra-Arab conflicts as well (see most recent examples of Iran-Iraq war, Gulf War, etc.).

One of the assumptions of the "Oslo Peace Process" was that it would increase stability by improving the economic conditions for the Arabs of the region. Ironically, since the establishment of the Palestinian Authority (P.A.) the per capita GDP among the P.A. Arabs dropped from $3,500 in 1987 to around $1,000 in 1999. There are many factors responsible for this drop, prominent among them is the corruption of the P.A.

Paradigms of Peace for the Middle East

Martin Sherman

Policy Paper No. 19, 1998

In recent years, two major paradigmatic alternatives have been proposed for the attainment of peace and prosperity in the Middle East. One envisages the solution lying in political reform, the other in economic development. Of the two most recent Prime Ministers there are the same two positions: both have expounded their views in two widely reviewed books, Netanyahu, adopting the political approach his A Place Among the Nations, and Peres, the economic one in his The New Middle East. Both of these paradigmatic perspectives articulate a rationale based on the fundamental principles of their respective disciplines.

According to the political paradigm, the achievement of regional stability must necessarily be predicated upon the democratization and liberalization of the Middle Eastern regimes - only by inducing greater accountability and plurality in polities can governments be made sufficiently sensitized to the fate of the citizenry, and hence more circumspect in embarking on policies inimical to the public interest, such as costly, destructive wars. the economic paradigm sees progress toward peace as a process driven by accelerated economic advancement. Here the prescription is based on the assumption that eliminating (or at least reducing) privation and poverty will also eliminate (or at least reduce) the fundamental motivation for violence.

Fundamentally, both the political and the economic paradigms endorse greater "system decentralization", either explicitly as in the case of the former (where increasing plurality and competition in centrally controlled polities is the express objective), or implicitly as in the case of the latter (where the liberalization and deregulation of centrally controlled economies are generally considered essential pre-requisites for attaining the desired objective - a sustainable capacity for wealth creation).

The Invisible Hand and the Arm of the Law

Politics as the discipline of power, authority and compliance, determines the framework in which the "invisible hand" mechanisms of economics, as the discipline of efficient resource allocation and wealth creation, operate. Economics determines the resource base on which and by which the authoritative political process can operate. For the wealth created by economic processes of manufacturing and commerce constitutes the basic inventory of assets which determines the capacity of a politician to exert power and authority at home and abroad. While it is the economy of a collectivity which determines its overall capability, it is the structure of its polity which determines how that capability is administered. This is a distinction which has significant policy implications, particularly in a Middle Eastern context.

It seems plausible to infer that the "conceptual space" mapped out by the theoretical "ideal types", defined in terms of maximal or minimal decentralization, participant plurality and competition, does in fact depict adequately the full range of possible diversity in which empirical variants of polities and economies manifest themselves in reality. The modus operandi of a highly centralized economy should at some point become incompatible with that of a highly decentralized polity, and conversely themodus operandi of a highly decentralized economy, inimical to the exigencies of a highly centralized polity. Accordingly, at some point, the degree of centralization (decentralization) in one area should begin to operate as a brake (spur) to decentralization in the other, and hence as a brake (or spur) on the effects associated with such decentralization. This is a crucial element in the debate about the relative efficacy of political reform and economic development as instruments for the promotion of peace.

Predictions and Performance

1. The Political Paradigm

In spite of the traumatic vindication of those (like Churchill and Eden) who warned that regime structure should be a major issue to be addressed in the formulation of foreign policy, it was only several decades later, in the early 1980’s, that a serious, systematic effort was started to investigate the phenomenon of what has become to be known as "democratic peace". This has assumed a status of almost a law in international affairs despite various explanations for it, which chiefly agree that in a democracy it is the multiplicity of polity participants, the effective competition between them and the consequent dispersion of political power that result in more restrained and prudent international behavior. Elections alone are not enough: the term "democracy" must be taken to comprise a number of basic elements which are all essential to the maintenance of on-going polity plurality and accountability. These include not only the widespread legitimacy and tolerance of organized and overt oppositionary institutions, and effectively entrenched mechanisms which limit the power of the incumbent executive authority, but also the independence of mass media from government control, and restrictions on the use of state resources for the purposes of the regime. Only together with them that popular elections can be free and meaningful, and become a genuine vehicle for allowing the public to decide who will govern, and an effective means for making those elected, accountable to those who elect them. As Randolph Rummel, one of the pioneers of "democratic peace" research, points out, " a necessary condition of violence between two states is that at least one of them be ...nonlibertarian". It would thus appear that there is much to validate the political paradigm.

2. The Economic Paradigm

While the lack of democracy may be a necessary condition for war, the existence of democracy is clearly not a necessary condition for peace - as evidenced by the fact that war is neither a permanent nor a ubiquitous feature of relations among non-democratic states. The economic paradigm proposes an alternative perspective for the causality of inter-state violence.

Because of the structure of the world economy, the commercial and financial disruptions that would result from war between advanced wealthy countries would be far more severe than would be the case if poorer, less developed states were involved. By contrast, for the less affluent, less advanced countries, whose economies are often highly dependent on natural resources and raw materials, rather than on a complex manufacturing, commercial and financial base, war may have some economic incentives, if it focuses on the struggle for such resources. Moreover, underdeveloped economies, which are often centrally controlled, have less elaborate and complex mutual links with other nations. Thus the consequences of disrupting trade and financial relations, which ensue from war, would be less severe, because of the lesser dependence on these links. It would therefore seem to follow that the greater economic development and the more elaborate and interlocking commercial links associated with this development would constitute an inducement for greater international stability. Hence, according to the rationale of the economic paradigm, it is the generation of greater wealth (rather than democratic reform as in the political paradigm) that will generate greater stability.

However, the findings of empirical research into the effect of wealth, economic growth and trade on inter-state conflict have proved to be significantly less supportive than those pertaining to the effect of regime type. Different studies produce differing, indeed even conflicting results. It is difficult to overlook the fact that the most violent conflagrations of the century took place between the world’s more developed nations; making tyrannies more prosperous will not make them morepacific - only more powerful.

Two Kinds of Stability

In fact, some reflection will reveal that much of the rationale of the economic paradigm implicitly assumes, at least partially, the tenets of the political one and the presumption that domestic economic hardship may fuel the flames of foreign wars, seems more plausible in a dictatorial environment than in a done. For example, the argument that the sense of grievance, which may result from economic hardship, could foment war by governments channeling it against some "external enemy" , is predicated on the assumption that governments can indeed control the means by which to mold public opinion. Clearly this is far more likely to be the case in non-democratic regimes, where the mass media are in the hands, or under the command, of the incumbent rulers.

The basic rationale of the two paradigms militate toward a fundamental distinction as to the nature of the stability to which each is purported to aspire. On the one hand, in the political paradigm, the focus is mainly on international stability i.e. on stabilitybetween states and does not address (at least not explicitly) the issue of intranational stability i.e. the issue of stability within the state. The major thrust of the argument focuses on the idea that the greater accountability of the rulers to the citizenry will make them more averse to embarking on costly and destructive wars with other states.

The economic paradigm places greater emphasis on the issue of intranational stability, by focusing on the dangers of domestic political upheaval, arising from domestic economic privation.

If the primary effect of increased wealth is to facilitate increased regime stability; while the primary effect of increased democratization is to facilitate increased stability in the relations between regimes, the plausibility of aggressive behavior by well-to-do countries becomes a logical result of a well defined processes of cause and effect: if resources are utilized to bolster and entrench an inherently aggressive dictatorial regime in its position of power and to extend its capabilities, the prospects of war may well be increased. The prospects of military success, enhanced by economic wealth, are liable to weigh more heavily with dictatorial rulers, than contentment of their citizens, whose fate counts for little in determining their continued incumbency. Unless economic enrichment is accompanied by political reform, there is very little reason to suppose that economic development will induce greater pacificity in the external conduct of states.

The maintenance of a centralized polity requires vast resources whose allocation can only be effected by centralized mechanisms which are in opposition to the liberties required to engender sustained economic advancement such as the unhindered flow of people, ideas and merchandise, and the freedom to challenge accepted conventions, conceptions and perceptions. The distribution of national wealth across a wide base can only reduce the available resources which may be devoted to buttressing the regime in its position of power. In autocratic regimes, the armed forces frequently serve to protect the regime from internal as well as external enemies (examples are Egypt, Syria, Iraq and Saudi Arabia).

Two Types of "Peace"

"Peace" may be used in the sense of "mutual harmony" between states maintained by a mutual perception of a common interest in preserving a non-violent status quo as the preferred option of all protagonists or it may be used in the sense of the "absence of war", maintained by deterrence, in which one or both sides are dissuaded from embarking on a course of violence as a preferred option only by the threat of incurring exorbitant cost. It is not surprising to find that "peace" of the "mutual harmony" variant prevails almost exclusively between democracies, since its characteristics of openness and unfettered trans-frontier interactions run counter to the nature of dictatorial regimes.

Not only should a distinction be drawn between inter- and intra-state stability, but also between two different kinds of inter-state stability, the one, "democratic peace", being the product of a mutual preference of libertarian polities for non-violence, the other, "armed peace" being the result of coercive deterrence that dissuades the parties from engaging in hostilities, which otherwise might be their preferred option. It is "peace" of the second variety that can be expected to prevail between regimes of this type, and which is the prevalent variant in the virtually democracy-devoid Middle East.

The Path to Peace: Does Prosperity Induce Political Reform?

The crucial question for proponents of the economic paradigm is whether improved economic conditions can indeed be expected to engender greater democratization. (This should be distinguished from the previously debated question of whether economic success can induce peace directly, without the intervening variable of political reform.) The history of this century has shown causal relationships between economic prosperity and democratic reform to be far more ambivalent than may appear at first sight. For example, in Eastern Europe it was not economic success but economic collapse that was the impetus for democratic reform and economic wealth which flourished in the 70s and 80s in Saudi Arabia and the Gulf states did little to propagate significant democratization of the regimes in these countries. Nonetheless, quantitative studies of the relationship between economic development and democratization do generally seem to suggest the existence of a significant and positive correlation with Muslim Arab states an exception. Findings presented at the 1996 meeting of the American Political Science Association show that: "...the correlation between income and democracy holds within (sic) all but one region/culture... The one exception is Islam for which there is no significant correlation... Among Arab nations there is a negative correlation between wealth and freedom...".

Policy Prescriptions

1. While democratization of states seems to be a sufficient condition for non-belligerency between states, almost all the regimes in the Middle East, with the exception of Israel, are non-democratic.
    
2. While economic wealth, which facilitates reducing dissatisfaction with incumbent regimes operates mainly to induce internal stability, democratic reform, which imposes greater accountability of the incumbent regime to the citizenry and hence greater circumspection in foreign policy choices, induces greater external stability.
    
3. In the Middle East, greater economic wealth appears to be negatively related with democratization.

These elements impinge upon policy related issues on several different, yet interrelated levels - international, regional and the Israel-Arab conflict. For the international community, the implications seem to militate unequivocally toward thecaveat that unless significant (indeed, radical) reforms are undertaken in the Middle East, there will be no significant progress in reducing the inherent potential for violence in the region. The vision of a "New Middle East" of the kind advocated by the architects of the Oslo process, which sees peace being attained by establishing a new economic order on the basis of the existing political order, appears to be not only inappropriate and unattainable, but dangerously counter-productive. Unless democratic reforms are forthcoming, it seems highly unlikely that in the highly centralized polities, such resources will generate any long term, sustainably productive economic base. While subsequent economic decline may attenuate aggressive capabilities, this may also prompt a declining power to initiate a "preventative war" i.e. a war initiated in order to "head off" an ongoing deterioration of one’s relative power.

At the regional level, the major inference appears to be that in the absence of pervasive democratic reform, the chances of attaining peace of the "mutual harmony" genre are extremely low. In a climate in which rulers often tend to perceive "peace" more as a grudgingly accepted constraint rather than a desired value, the exigencies of self preservation will compel regional actors, even those not necessarily inherently belligerent, to continue to allocate huge sums for defense.

For the existing regional actors, the policy implications that arise from the foregoing analysis seem both clear and bleak: in the current environment in the Middle East there seem little option but to persist in a policy of heavy military spending. A government abandoning military might would be rash: just like a firm in a competitive market which abandoned its pursuit of profit in favor of loftier and less materialistic goals, its fate would most likely be woefully grisly.

The implications for the peoples (as opposed to the ruling elites) of the region seem equally clear and no less bleak: They appear destined to be locked into a pattern of spiraling military expenditure, burgeoning outlays for securing the positions of privilege of incumbent rulers with outbreaks of violence when strength permits foreign policy adventurism or forestalling further weakness makes it seem necessary.

Unless the peoples of the Middle East rise up and demand the liberties and the rights essential to a democratic society (over and above the formality of periodic elections) that facilitate open debate, expression of dissension, and criticism of government without fear of reprisal, imprisonment or execution, there seems scant chance of making the Middle East a more prosperous and peaceful region. It appears difficult to avoid the conclusion that the formula for peace and tranquility between Jew and Arab must focus on demands for democratic reforms in Arab regimes rather than on territorial concessions by Israel.

"While territorial expanse cannot provide any country with absolute deterrence, the lack of minimal territorial expanse [such as that implied by the Oslo Accords] will create a situation of almost compulsive temptation to attack Israel from all directions" (Shimon Peres. Territorial compromise also imposes on Israel the imperative for massive preemption at minimum provocation, thereby elevating the volatility of confrontation to new and unprecedented heights.

Only political reform that will transform the region into one in which the structure of the regimes make non-violence the preferred mode of interstate dispute resolution, can provide any hope of a durable and lasting settlement of the conflict between the Jewish and Arab inhabitants of the Middle East. Only then will the prospect of further war permanently recede.