The main idea of “Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation” is the discussion of the economic underdevelopment of the Middle Eastern countries with references to the historical context. In his article, Timur Kuran pays attention to the fact that the modern recessing processes in the economy of the Middle Eastern countries in comparison with the economic growth of the Western countries can depend on the peculiarities of the historical development of these Eastern countries with basing on the elements of the Islamic law and traditions.
Thus, Kuran states that it would be possible to contribute to the further progress of the Middle Eastern countries’ economy by concentrating on the role of the public capital and investments at the highest levels in the countries because the contemporary orientation on the traditional Islamic institutions only provokes the poor economic performance of the countries at the global arena (Kuran).
Thus, Timur Kuran determines several main factors that can be discussed as the influential ones for affecting the peculiarities of the Middle Eastern economy. To identify and analyze the peculiarities of these factors, Kuran uses the causal mechanism for examining them. That is why the main method used for the research is the analysis of the causes which led to the observed outcomes and influenced the development of the economy in the Middle Eastern countries.
According to Kuran, one of the most important factors is the tradition of the property inheritance which is historically supported. This social mechanism makes the idea of wide partnerships irrelevant. Thus, the economy of the Middle Eastern countries is based on small partnerships. Moreover, in this case, it is impossible to speak about the idea of corporations which is actively used in the Western world.
The factor of the absence of corporations is closely connected with such traditional aspects of Islamic law as the waqf which is the method to realize the idea of trust in public services of the Islamic world. In his article, Timur Kuran presents a detailed discussion of the problem of impossibility to change the waqf system with its peculiarities into the system of corporations which is typical for the Western countries.
Analyzing the details of the Islamic contract law, the author concentrates on small partnerships, the role of governance, banks, and the peculiarities of the system of taxes as the necessary elements for forming the basics of the Islamic economy. Moreover, Kuran also emphasizes the differences in discussing the aspects of the business and economic activities provided by the minorities in the Middle Eastern countries.
Having presented the extensive analysis of the economic development of the Middle Eastern countries with references to the historical peculiarities, Timur Kuran concludes that the poor economic performance of these countries within the global market and in the context of the modern tendencies is influenced by the progress of such significant elements as the absence of corporations which are the alternatives to the small economic partnerships, the dependence on the traditional Islamic law with accentuating the concept of waqf as the main regulator of the public services, the fact of paying much attention to the innovation in the field of economic strategies, and few possibilities for using the private capitals for the effective investments.
All these factors make the economy of the Middle Eastern countries less competitive within the global market.
Works Cited
Kuran, Timur. “Why the Middle East Is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation”. Journal of Economic Perspectives 18 (2004), 71-90. Print.