Annals of Economics
The economies of the Arab world lag behind the West. Is Islam to blame?
by John Cassidy February 28, 2011
February 28, 2011 Issue
ABSTRACT: ANNALS OF ECONOMICS about whether Islam has been a deterrent to economic growth in the Arab world. After the revolution comes the test of governing. From Paris in 1789 to Cairo and Tunis in 2011, the task is the same: translating the euphoria of the uprising into lasting material progress. If the new governments of Egypt and Tunisia are to have any chance of satisfying the demands of the revolutionaries, they need to start out with an accurate assessment of what has been holding back their economies. But what if a major culprit is Islam itself? An influential line of analysis points to that conclusion. “No one can understand the economic performance of the Muslim nations without attending to the experience of Islam as faith and culture,” David Landes, the Harvard economic historian, wrote in “The Wealth and Poverty of Nations.” After 9/11, Bernard Lewis, the Princeton historian, developed this narrative further, arguing that the pervasive influence of Islam prevented many Arab countries from properly addressing the issue of why they were falling behind. The notion that religion plays a central role in economic development dates back to Max Weber’s 1905 treatise, “The Protestant Ethic and the Spirit of Capitalism.” Modern economists tend to put greater emphasis on the way beliefs are codified and institutionalized than on the beliefs in themselves. Many Islamic societies were slow to develop banks, commercial courts, joint-stock companies, and other business organizations. In a new book, “The Long Divergence: How Islamic Law Held Back the Middle East,” the economist Timur Kuran blames social customs and religious rules dating back to the earliest days of Islam. Discusses the way business partnerships and inheritance practices traditionally worked in many Islamic countries. But, before consigning a fifth of humanity to the dustbin of economic history, one might consider, more broadly, whether it makes sense to place such an emphasis on religion in explaining the underdevelopment of so many Muslim countries. To start with, it’s worth noting—and Kuran and Lewis, to their credit, do note it—that Islam, at least in its original formulation, was far from hostile to business. As the centuries passed, many Muslim regions fell badly behind the West, but the most immediate explanation involves not Islam but predatory governance and colonialism. More recent history provides examples of Muslim countries seeking to engage in the global economy—and of some of them succeeding. Discusses the recent economic gains made by Indonesia, Malaysia, and Turkey. Also considers how demographic changes in Egypt and Tunisia may affect economic development there. Day-to-day worship of the sort practiced by hundreds of millions of Muslims is no more what is holding back the Middle East than Hinduism was what held back India or Roman Catholicism was what held back Ireland. Despite the arguments of new Weberians, people have always found a way to serve their gods and Mammon, too.