Two-level negotiations in a fragmented system: Saudi Arabia's WTO accession.

Based on a case study of Saudi Arabia's WTO accession, the article offers a critique of conventional factor- and sector-based models of trade policy, proposing instead a two-level institutional account that is likely to be relevant for non-democratic states in general. Historically grown patterns of institutional fragmentation in both public and private sector in Saudi Arabia have made interest formation and the building of policy coalitions difficult. Various WTO-related economic reforms have therefore been held up as long as they were negotiated within the disjointed Saudi system. However, as soon as the Saudi leadership decided to directly follow the reform demands of its international negotiation partners, changes were rammed through rapidly - as institutional fragmentation of interests prevented an encompassing veto coalition against a comprehensive policy package which was in its substance imposed from outside. Fragmentation of state, business and relations between them can hence mean policy stalemate, but can also make for rapid policy adjustment under conditions of external pressure. In its conclusion, the article relates these findings to the institutionalist literature on trade in general.

Arab Gulf States : an assessment of nationalisation policies

GLMM - Gulf Labour Markets and MigrationGaps in labour rights and labour prices between nationals and migrant workers are the main causes explaining the low participation of GCC citizens in the region's private labour markets. Past policies of 'Gulfization' have not directly addressed these structural constraints but have rather attempted to impose higher nationalization quotas by fiat, with limited success. More recently, some of the Gulf governments have started to use taxes and subsidies to try to narrow the labour price gap; at the same time, some have improved the labour mobility rights of foreigners. This paper provides a preliminary assessment of these ﾓsecond generation' policies. It concludes with general observations on how the rights and price gaps could be closed more systematically and on the broader distributional reforms this might entail.The GLMM programme is conducted by the Gulf Research Centre (GRC) and the Migration Policy Centre (MPC) and financed by the Open Society Foundations (OSF)

Rent distribution, labour markets and development in high rent countries

This paper argues that hydrocarbons producers with high rents per capita constitute a specific category in the broader universe of rent-dependent countries, facing a specific set of development challenges that are not shared by mid-rent countries (MRCs). The paper surveys patterns of rent distribution in high-rent countries (HRCs), focusing on energy subsidies and excessive public employment, and analyses their developmental consequences. It then proposes unconditional cash grants for HRC citizens in combination with energy subsidy and public employment reform as a mitigation strategy to minimise HRC-specific negative effects of rent distribution

Taking causal heterogeneity seriously: implications for case choice and case study-based generalizations

In mixed methods approaches, statistical models are used to identify “nested” cases for intensive, small-n investigation for a range of purposes, including notably the examination of causal mechanisms. This article shows that under a commonsense interpretation of causal effects, large-n models allow no reliable conclusions about effect sizes in individual cases—even if we choose “onlier” cases as is usually suggested. Contrary to established practice, we show that choosing “reinforcing” outlier cases—where outcomes are stronger than predicted in the statistical model—is appropriate for testing preexisting hypotheses on causal mechanisms, as this reduces the risk of false negatives. When investigating mechanisms inductively, researchers face a choice between “onlier” and reinforcing outlier cases that represents a trade-off between false negatives and false positives. We demonstrate that the inferential power of nested research designs can be much increased through paired comparisons of cases. More generally, this article provides a new conceptual framework for understanding the limits to and conditions for causal generalization from case studies

EU-GCC relations in the era of the second oil boom

Die Golfstaaten haben sich in den vergangenen Jahren schrittweise ökonomisch neu orientiert und sich in geostrategischer Hinsicht weg von den USA und in Richtung Asien bewegt. Sie besitzen eine Vorreiterrolle in einer neuen Phase der regionalen Wirtschaftsliberalisierung und bei grenzüberschreitenden Handelsbeziehungen. Der Autor beleuchtet vor diesem Hintergrund die Wirtschaftsbeziehungen zwischen der Europäischen Union und dem Golf-Kooperationsrat (GCC), welcher der wichtigste Handelspartner der Union in der arabischen Welt ist. Er zeigt, dass die GCC-Region für die EU von strategischer Bedeutung ist und welche komparativen Vorteile sich hieraus in der Ära nach dem Irak-Krieg ergeben. Er gibt einen Überblick über neuere politische Entwicklungen in der Golfregion und beschreibt die veränderte Stellung des GCC als Global Player in der regionalen und globalen politischen Ökonomie. Er geht außerdem auf das Freihandelsabkommen zwischen der EU und dem GCC ein und diskutiert zukünftige Leitlinien und Ansätze für ein stärkeres wirtschaftliches Engagement der EU in der Golfregion. (ICI)"The main results of the analysis of recent developments in the GCC and the chances they offer for the EU are as follows: The GCC has emerged as a hub of supreme economic and political importance, overshadowing the rest of the MENA region, but at the same time becoming increasingly integrated with it. As economic powers, GCC countries have a vested interest in regional peace. A much deepened European commitment towards EU-GCC cooperation is needed, and needs to be explicitly reconciled with large EU members' bilateral strategies and interests. The EU needs to formulate a clear vision and benchmarks of cooperation, draw in high-level commitment, and create follow-up mechanisms for its GCC policies, which thus far have been too haphazard. The EU will have to overcome certain hurdles in multilateral cooperation with the GCC and needs to pursue a differentiated approach that allows for bilateralism when it is necessary, but strives for collective solutions where it is possible. It needs to recognize both its diplomatic advantages and its limits towards the GCC: While its economic influence and its technocratic prestige are considerable, its political leverage will always be very limited, even more so than in other parts of the Middle East. Yet, the liberalization processes that have unfolded during recent years in the Gulf provide new access points for cooperation on reform in places as different as Kuwait, Bahrain and Qatar. The EU needs to play up its comparative advantages as multilateral body with wide regulatory experience, as something the GCC itself aspires to become." (author's abstract

Segmented market economies in the Arab world: the political economy of insider-outsider divisions

This paper argues that the low dynamism of low- to mid-income Arab economies is explained with a set of inter-connected factors that constitute a particular variety of capitalism which we call ‘segmented market economy’. These include an over-committed and interventionist state; deep insider-outsider divides in private sectors and labor markets that result from and reinforce lopsided state intervention; and an equilibrium of low skills and low productivity that results from and reinforces insider-outsider divides. These mutually reinforcing features undermine encompassing cooperation between state, business and labor. While some of these features are generic to developing countries, others are regionally specific, including the relative importance and historical ambition of the state in the economy and, closely related, the relative size and rigidity of the insider coalitions created through government intervention. Insiders and outsiders exist everywhere, but the divisions are particularly stark, immovable and consequential in the Arab world

Reforming labour market and migration regulation in Gulf states

The six states in the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) employ close to 20 million foreign labourers, with Qatar alone employing an estimated two million migrant workers. Foreign workers are subject to vastly different conditions and wages compared to citizens of the countries. They are governed by restrictive sponsorship systems, constraining labour mobility. Steffen Hertog‘s research on the political economy of labour market segmentation in Gulf rentier states has influenced labour reforms throughout the region