Fluent Essays

one discussion questionYour response should directly address the content required by the prompt.a. It shows that you have read and synthesized the readings.b. It addresses some of the implications of the discussion prompt or question.c. It stimulates additional ideas or responses. It furthers the discussion. Phoned in or superficial responses will provide obvious information that lacks depth or evidence of thought.Your writing is clear and pertinent; minor grammatical or stylistic errors do not detract from the meaning.1- Timur Kuran argues that the interaction of several Islamic institutions had unintended effects on development. Specifically, he argues that trusts, egalitarian inheritance, legal pluralism, and a lack of corporate structures can explain the underdevelopment of the Middle East today. Do you agree? Why or why not? In addition to understanding Kurans argument, I want you to be thinking about how you critique arguments. For example, if you believe that high levels of foreign involvement explain underdevelopment in the region, then be cognizant that at least one claim that you are likely making is that it is not (primarily) Islamic Institutions but foreign intervention that matters or it is not X but Y. The latter is a generalized form of a critique that you may be able to apply to other readings or scholarly arguments. Read through what your classmates write both to learn the critiques specific to this argument but also to find the more generic criticisms.I HAVE ATTACHED THE FOLLOWING READING TO ANSWER THE QUESTION. I dev.barriers.1.pptx dev.barriers.2.pptx kuran.2004.pdf pol.economy.pptx Unformatted Attachment Preview Why is the Middle East UnderDeveloped? Hurdles to Developme nt in MENA ▪ Conflict ▪ Islamic Institutions ▪ Resource Curse Claim: The region has experienced high levels of conflict and instability that impede development. Hurdles to Development: Conflict and War Conflict-torn states in the region have experienced de-development. (Iraq, Syria, Occupied Territories, Yemen)  Declines in education, healthcare, and infrastructure Lack of secure investment opportunity  The Occupied Territories: lower GNI per capita, increased unemployment, decreased industrial and agricultural production. (e.g. closures, insecure property rights) • Islamic institutions and their legacy can explain underdevelopment – and the long divergence -in the Middle East today. Islamic Institutions and Development • • • • Inheritance law Contract law based on individuals Islamic trusts (waqfs) Legal pluralism • Together, these institutions suppress collective action and encourage stability/stagnation. • Egalitarian inheritance law (vs. primogeniture) • Limits capital accumulation Why did the West rise and the Middle East decline? • Contract law based on individuals not corporations • Not suited to modern economies • Legal pluralism • Multiple legal systems to reflect the multiplicity of religions  Islamic trusts (waqfs)  Elites in the Middle East and the West suffered from arbitrary taxation and expropriation  In the West, elites agitated  Prop Rights→ROL and political reforms→state provision of public goods Why did the West rise and the Middle East decline?  In the Middle East, the introduction of Islamic trusts resolves the property rights quandary.  Deal: Elites agree to finance public and semipublic goods, and leaders agree to refrain from arbitrary expropriation or taxation.  To prevent misuse, trusts are relatively fixed and inflexible to change.  Dampens the demand for property rights and the rule of law , perpetuate the weak provision of public goods, and depress the emergence of civil society and collective action.  If these institutions were widespread and significant, these countries should have similar levels of development. Critical thinking: Do these Islamic institutions impede development ?  If they don’t -- AND THEY DON’T -- other factors certainly play a role and arguably a more important one . . .  These institutions may matter but other factors may account for under-development in MENA better.  Levels/quality of education, foreign intervention.  Many of these institutions were no longer in place a century ago . . . Do they still explain underdevelopment today? NATURAL RESOURCE ABUNDANCE THE RESOURCE CURSE • The resource curse, also known as the paradox of plenty, refers to the puzzle that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. RESOURCE CURSE • Why is there a resource curse? • Appreciation in currency/exchange rate → increase income, imports → decimation of other domestic industries • Swings in natural resource prices • Govt mismanagement of natural resources STATE-LED DEVELOPMENT: CURSE OR BLESSING? • Why are SOEs (state owned enterprises) traditionally inefficient? ▪ Diffuse oversight ▪ Unclear incentive structures ▪ Conflicting priorities • Employers of last resorts/cash cows • Algeria, Iraq, Iran . . . yet some countries have successful SOEs . . . Why? WHY DO SOME STATES HAVE SUCCESSFUL STATE OWNED ENTERPRISES? • On the whole . . . GCC countries have been able to develop more successful SOEs than other states in the region and globally. • Absence of a populist mobilizational history • Autonomy in economic policy making POPULIST MOBILIZATIONAL HISTORY ▪ Most GCC countries lack a populist mobilizational history (exceptions Kuwait and Bahrain) ▪ What is this? (Economic/Left-wing) populism… ▪ A rhetoric of anti-elitism & redistribution. ▪ The use of patronage by incumbents to mobilize lower and middle class support. AUTONOMOUS ECONOMIC POLICY A small number of elites set SOE related strategies ▪ Unified principals with a clear goal of profit maximization) ▪ Escape the pitfalls of most resource rich countries ▪ Conflicting priorities ▪ Unclear incentives WHAT DOES THIS TELL US? • It is one explanation that accounts for variation in the level of development across resource-rich and broadly across countries in the region. • Some countries have avoided the traps commonly associated with SOEs (SOE-heavy development). They’ve thrived! • Thinking about Kuran, does the mismanagement of resources and the heavy reliance on SOEs in the region explain the divergence between the Middle East and the West? American Economic Association Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation Author(s): Timur Kuran Source: The Journal of Economic Perspectives, Vol. 18, No. 3 (Summer, 2004), pp. 71-90 Published by: American Economic Association Stable URL: http://www.jstor.org/stable/3216807 Accessed: 05/05/2010 17:24 Your use of the JSTOR archive indicates your acceptance of JSTORs Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTORs Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=aea. 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American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The Journal of Economic Perspectives. http://www.jstor.org of Economic Perspectives?Volume fournal the Why Middle East Institutional Timur is Historical Underdeveloped: of 18, Number 3?Summer 2004?Pages 71-90 Economically Mechanisms Stagnation Kuran millennium ago, around roughly the tenth century, the Middle East was an advanced region of the world, as measured economically by standard of or institutional creliving, technology, literacy agricultural productivity, A however, ativity. Only China might have been even more developed. Subsequently, the Middle East failed to match the institutional transformation through which western coordinate Europe vastly increased its capacity to pool resources, produc? tive activities and conduct the of the institutional endowment True, exchanges. Middle East continued to evolve. But in certain areas central to economic modchange was minimal, at least in relation to the structural transformation of the West and, for that matter, the Middle Easts own evolution during the early Islamic centuries. In eighteenth-century credit Cairo, practices hardly differed from those of the tenth century. Likewise, investors and traders were using enterprise forms essentially identical to those prevalent eight centuries earlier. By the nine? ernization teenth the entire century, western Middle and its offshoots Europe it had fallen markedly This essay offers behind East was clearly underdeveloped relative to in the new world; and by the twenty-first century, parts of the Far East as well. In why the Middle East became underdeveloped. it to in certain Middle Eastern ones rooted institutions, particular, points including the regions dominant in as and some cases also obstacles religion, past continuing to economic The institutions that generated bottlenecks development. evolutionary include: which inhibited accumulation; 1) the Islamic law of inheritance, capital of Islamic law and its lack of a concept of corporation, 2) the strict individualism which hindered society weak; reasons organizational and 3) the waqf, and contributed to keeping development Islams distinct form of trust, which locked civil vast ? Timur Kuran is Professor of Economics and Law, and King Faisal Professor of Islamic Thought and Culture, University of Southern California, Los Angeles, California. His e-mail address is (kuran@usc.edu). 72 of Economic Perspectives fournal into organizations over time. These insti? likely to become dysfunctional at the time of their emergence. Nor did not pose economic disadvantages into did they ever cause an absolute decline in economic turned activity. They resources tutions handicaps developed themselves by perpetuating the institutions during of the modern the long economy. the Middle in the eighteenth century, Beginning to dominate and Jews came increasingly the most period when the West Easts indigenous Chris trans sectors of the local lucrative economy. They did so through the choice of law to which they had been entitled their choice of law in favor of modern legal since the dawn of Islam. By exercising of Islamic economic systems of the West, they were able to escape the limitations in institutions. new economic sectors, Especially including banking and insurance, more than the became decidedly competitive they regions Muslims, who lacked of law. Muslims choice began Islams to economic legal obstacles reforms launched from the mid- overcoming development largely through secularizing legal nineteenth century onward. Until those reforms, Muslims commerce and finance under Islamic law. were required to conduct In spite of a long string of institutional reforms over the past century and a remain a factor in the Middle Easts economic half, traditional Islamic institutions sectors For example, weaknesses of the regions private economic backwardness. of human and their deficiencies Nothing economic in this essay implies, growth, innovation modern economic abroad, because this was not because institutions of unintended of Islamic law. capital are rooted in applications with however, that Islam is inherently incompatible If the Middle East failed to develop or progress. to transplant them from but blocked economic advancement, Islamic institutions to serve designed on its own and was forced Islam expressly interactions among such as objectives, efficiency and equity. In the historical The term Middle East admits many definitions. laudable economic sweep of this I in to am using it a broad and elastic sense, not only the entire comprise paper, which was Arab world and Iran, but also Turkey, along with the Balkan peninsula, under Turkish rule during much of the period of interest. Spain belongs to the reversion, by the end of the fifteenth century, region up to the Reconquista?its from Muslim to Christian control. The Middle Eastern c. Economy, 1000 did not emerge all at once, during the lifetime of elements were not present in 661, the end of Islams Key Prophet of Muhammad and canonical age of felicity, which spanned the helmsmanships in the his first four successors. Few economic institutions are even mentioned Islams economic institutions Muhammad. Quran, classical let alone Islamic until around described civilization in detail. evolved 1000 were the central in place. These the nineteenth institutions century. were What The distinguishing economic features of or so, and not over the next three centuries of the Middle East firmly economic institutions to remain follows critical to the regions selective is a deliberately economy account up to of the Timur Kuran 73 infrastructure around 1000. As we shall see, each of the identi? regions economic fied institutions to the observed delay in economic modernization. contributed Individually Oriented Contract Law the first few centuries During following the rise of Islam, Islamic law produced a rich set of principles, and procedures to govern contractual relation? regulations were to of There were There rules the also ships. support joint ownership property. rules to support the pooling of resources for commercial missions. Commercial established under Islamic law typically involved one sedentary investor partnerships who financed a trading mission run by a single traveling merchant. There could be of partners, but in practice the number six. The any number rarely exceeded was to a mission. to limited Nevertheless, cooperative enterprise compared single legal systems of the time, this legal structure allowed in circumscribing abundant the mission and flexibility other traders and investors setting profit shares 1970; Cizakca, 1996). (Udovitch, To modern eyes, a striking aspect of classical Islamic law is that it provides no room for corporations?collective enterprises possessing legal rights distinct from or serve it. A corporation can make and those of the individuals who finance remake its own internal rules, possess Its debts are not owed by its members property, make contracts and file legal claims. as individuals. Its decisions do not require the It can live on after its founders die or retire. approval of each of its members. Islamic law recognized members of a flesh-and-blood individuals. Whereas the only could sue one another as parties to a contract, their association had no partnership of its own. A third party could legal standing partnership Finance sue one or more partners, but not the itself. without Banks of Islam, money lending was a flourishing pursuit in the Middle East. By one interpretation of the Quran, Islam banned the use of interest in loan contracts. However, early Muslims did not achieve a consensus on the scope of this or even on of the persistent the definition interest. prohibition Notwithstanding At the advent and often it involved transfers recognizcontroversies, money lending continued, able as interest. The jurists of Islam supported credit markets by devising, as in Muslims to territories under Christian that allowed rule, European stratagems circumvent 1966 Islams interest ban without violating its letter (Rodinson, [1973]). That interest does not mean that credit markets were common payments the legitimacy of a modern about Uncertainty economy. as combined with the lack of corporate law, meant that lenders resembled those of interest, as borrowers well vided ble presumed through of pooling (Udovitch, 1979). individuals. some loans were pro? usually Although there were no banks capa? short-lived partnerships, shareholders resources and of outliving their initial were small vast and 74 Journal of Economic Perspectives Taxation and Weak Private Property Rights of of the Middle Ages followed two basic principles an on and en tails securfiscalism. Provisionism emphasis provisionism governance: of critical commodities, usually to keep urban populations ing steady supplies of imports and the discouragement content. Often it required the encouragement Arbitrary states Muslim-governed of exports. Fiscalism signifies the relentless drive to extract resources from ones subjects.1 Starting were defined taxes that with Muhammad, the earliest Muslim statesmen imposed in relation to commodities of Arabia. Within known in the economy as Islam spread to areas whose pre-Islamic civilizations the span of a generation, Iran?these became obso? were relatively complex?Palestine, policies Syria, Iraq, for adjusting tax rates to suit prevailing needs. lete. Precedents thus emerged In practice, since In principle, Muslims paid lower taxes than non-Muslims. rulers imposed new taxes and fees wherever possible, faith-based tax discrimination was unsystematic, and Muslims did not necessarily receive more lenient treatment. also endure expropriation and the corvee?the could Any community requirement to contribute labor to state-sponsored projects, for example, resorted to confiscation and imposed of crisis, rulers often Egalitarian Ofthe In times Inheritance System rules set forth in the Quran, the most detailed and most to to inheritance. Two-thirds of any estate is reserved according few economic explicit pertain intricate rules for a list of extended parents, relatives. road building. new taxes. relatives under spouse (s), siblings and, The individuals testamentary certain of both sexes, including children, also more distant circumstances, are limited to one-third of his or her powers no mandated In addition, at least in the Sunni interpretation, in a will (Fyzee, 1964, chapters 11-13; Powers, 1990). be included of wealth. This inheritance the concentration system limited estate. heir may also By the same or other assets, across of successful enterprises, the preservation token, it hindered undivided one could hold True, any property by forming a proprietary generations. a the systems net or heir out the rest. Nevertheless, buy partnership having single wealth. effect was to fragment property, especially financial through the Waqf System in states the Middle East did not seek to micromanage era, their economy. only to pursue limited ends. Nor did they seek They intervened sanitation, health, welfare and mass major roles in such areas as productivity, disinclined to provide public education. modern were standards, By they strikingly Private Provision Before of Public Goods the modern or semipublic goods. charitable complexes libraries, caravanserais Thus, few of the great mosques, of the time were financed or built by a state. and 1 These are two of the three principles that Gene (2000, chapters 1-4) identifies as the pillars of economic governance in the Ottoman Empire after it reached maturity. But they apply with equal force to earlier Muslim-governed states. The last of Gencs three principles, conservatism, was not yet an identifiable principle around 1000, which followed a period of sustained institutional innovation. Why the Middle East is Economically Underdeveloped 75 A vast array of social services, including public and semipublic goods, were called the waqf, known also as a pious foundation supplied through an institution trust founded under Islamic law by or an Islamic trust. A waqf is an unincorporated of a designated a person for the provision service in perpetuity (Cizakca, 2000; Kuran, 2001). an endowment a lighthouse, innumerable establishes a waqf by turning immovable private property into to support any social service permissible under Islamic law: a school, an orphanage, a neighborhoods water supply, a mosque, among other possibilities. The beneficiaries need not be Muslims. The waqf One came to play an increasingly important words of Marshall Hodgson vehicle for financing Islam as a society. memorable in Muslim-governed states. In the the primary (1974, p. 124), it became for founding The incentives waqfs were role related to certain institutions intimately already Islams original institutions did not include not mention. The waqf was incorporated almost certainly as a creative presented. the waqf, which into Islamic culture the Quran does after the rise a century of private to the precariousness response and The lack of taxation exprosafeguards property rights. against opportunistic source of concern to high officials, many of whom were priation ... Purchase answer to see full attachment