Middle East Strategy at Harvard

MESH invites selected authors to offer original first-person statements on their new books—why and how they wrote them, and what impact they hope and expect to achieve. Paul Rivlin is senior fellow at the Moshe Dayan Center for Middle East and African Studies of Tel Aviv University. His new book is Arab Economies in the Twenty-First Century.

From Paul Rivlin

My book brings together two areas of research.

The first is an investigation into the balance between resources and needs in the Arab world. Resources can be thought of as the economy that provides the goods and services that a country requires; needs can be interpreted as the population, its age structure and growth. The reality is more complex because one of the factors of production is labor, which means that population is therefore part of supply as well as the source of demand.

The balance between supply and demand is crucially affected by changes in the age structure of the population. The proportion of those of working-age to the young and old (who do not work) in the Arab world is favorable at present and offers these countries the opportunity to develop with lower costs in terms of investment in education, health and other welfare expenditures. The working-age population is still growing more rapidly than the population as a whole, and this will continue for at least another decade. There is an increasing need for jobs, but if they are available, then more workers will be able to support relatively fewer dependents.

But over time this will change as the share of the elderly population increases, something that already presents serious challenges in Europe and Japan. Indeed, Arab population growth already has slowed in the last decade. That will push up costs and reduce the share of the population that can carry the burden.

So far, Arab countries have not taken advantage of this “demographic transition” or “demographic gift” in the way that East and Southeast Asian countries did in the 1970s and 1980s. Research has emphasized the major contribution that demographic transition made to rapid economic development in those regions. The danger is that in the Arab world, this temporary phase will pass and demographic trends will become more burdensome again.

The second area of research is part of what might be called the new economic history of the Middle East. In recent years, a number of economists and economic historians have attempted to provide new explanations for the poor economic performance of the region. They have examined religion, culture, institutions, geography, law, international relations and internal politics in ways that once were a taboo and, for some, remain so. This literature helps to provide answers to the questions that my first research area posed: why are such deep and prolonged imbalances permitted? These imbalances manifest themselves in high poverty rates, growing inequalities in income and wealth distribution, malnutrition and rates of illiteracy. Given the threats to stability that they pose, why have governments not been more effective? This book offers an explanation.

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