2012 Department of Economics School of Business American University in Cairo ECONOMICS 215: Economic History of the Middle East Prof. Mohamad M. Al-Ississ Office: Abdul Jamil Latif, Office # 1039 Email: alississ@aucegypt.edu Office Hours: Wednesdays 11:30 am -1:00 pm (Otherwise by appointment) Course Description: This course takes an analytic journey through economic history of the Middle East. It starts by analyzing the causes that led the Middle East to ascend to the helm of scientific and intellectual pursuit in the 9 th & 10 th centuries and its deterioration thereof after. Second, it examines the nineteenth century which witnessed a period of stimulating economic reform activity in the Middle East after decades of stagnation. During this period, there were attempts to reform the taxation system, create modern industry, invigorate the agricultural practices, and integrate commercially and financially with the rest of the world. These attempts dictated the economic, social and political trajectory of the region into the twentieth century and beyond. Economics 215 analyzes the motivations behind these reform attempts, assesses their success, evaluates their impact, and ascertains their consequences. Third, the course discusses the enabling circumstances that led the region to fall under colonial control, and scrutinizes the empirical and theoretic economic impact of colonialism. Finally, the course studies the post independence economies of the region inspecting the leading industrialization strategy and exploring the economic and political effects of natural resource wealth, namely oil. The course concludes with an overview of the current challenges and future trajectory of the region. Format: The class will be a combination of regular lectures by the professor and class discussions. The professor will highlight key points, explain theoretic frameworks and lead the discussions. One or more students will present an overview of the topic each lecture providing a critique of the readings, stressing key points and raising discussion questions. YOU ARE EXPECTED TO COME TO CLASSES HAVING READ AND UNDERSTOOD THE MATERIAL AND EAGER TO ANALYZE IT. Course Prerequisites: Comfort with economics (preferably introductory level economics), basic knowledge of the Middle East, curiosity, and a good sense of humor! Course Requirements: Active attendance and participation, map quiz, at least 10 quizzes on the readings, a presentation, and a final exam. Class Attendance: Regular attendance is essential to success in the course. 15% of your grade will be based on your participation. Class attendance means your alert, active, and respectful presence in class. I have a zero tolerance policy towards disrespectful presence in the class. I take this very seriously, and ask you to do so as well. Use of mobile phones and other materials not 1
relevant to the course while in attendance is prohibited and will be enforced. I will treat you as intelligent and mature adults and will expect nothing less from you. Grading: The grading rubric is as follows: Syllabus Quiz 2% Map Quiz 5% Participation 15% Presentation 15% Reading quizzes 33% Final Exam 30% Letter grades will be assigned as follows: A 90-100 A- 87-89 B+ 84-86 B 80-83 B- 77-79 C+ 74-76 C 70-73 C- 67-69 D+ 64-66 D 60-63 D- 50-59 F 49 and below Decimal marks 0.5 and above will be rounded up, and decimal marks 0.49 and below will be rounded down. ALL GRADES ARE FINAL. Missed Quizzes & Exams: Taking the quizzes and exams is mandatory. Unacceptable excuses for missing a test include: extracurricular commitments, malfunctioning car, job interview, temperamental alarm clock, nonrefundable airline ticket, multiple exams in one day, and uncooperative weather. An unexcused absence will count as a zero. Textbooks: The textbook for the course is: Owen, Roger. The Middle East in the World Economy, London, I.B. Tauris and Co., 1993. 2
Tentative Schedule The course schedule below lists the chapters in the textbook and other sources that will be covered by each lecture. IT IS REQUIRED TO READ THE MATERIAL PRIOR TO CLASS. YOU WILL BE COLD CALLED EACH CLASS TO DISPLAY UNDERSTANDING OF THE READINGS. Lecture 1: Sep 5-- Introduction Lecture 2: Sep 8 --The Middle Eastern Economy: Historical Overview Charles Issawi, The Modern Middle East in the World Economy, in The Middle East Economy: Decline and Recovery, by the author (Princeton: Markus Wiener, 1995), pp. 31-56. Topic I. The Rise And Fall Of Middle Eastern Economic Advancement Lecture 3: Sep 12 -- The Islamic World s Golden Age Chaney, 2008, Tolerance, Religious Competition and the Rise and Fall of Muslim Science." Lecture 4: Sep 15 -- its Decline, Owen (1993): The Middle East economy in the period of so-called decline, 1500-1800, pg 1-23. Timur Kuran. The Logic of the Ottoman Capitulations, Chapter 10 of a manuscript in progress: Islam and Economic Underdevelopment: Legal Roots of Organizational Stagnation in the Middle East, 2005. Lecture 5: Sep 19 & Sep 22 -- and What Explains the Reverse in Fortunes. Timur Kuran, Islam and Underdevelopment: An Old Puzzle Revisited, Journal of Institutional and Theoretical Economics 153 (1997): 41-71. Timur Kuran, Institutional Causes of Underdevelopment in the Middle East: A Historical Perspective, in Institutional Change and Economic Behavior, ed. János Kornai, Laszlo Matyas, and Gérard Roland (New York: Palgrave-Macmillan, 2008), pp. 64-76. Topic II: The Middle East in 1800: The Need for Reforms and Their Impact Lecture 6: Sep 26 -- The Middle Eastern Economy in 1800: A Snapshot Owen (1993): The Middle East economy in 1800, pg 24-56. Lecture 7: Oct 3 -- The Need For Reforms Timur Kuran. The Logic of Financial Westernization in the Middle 3
East. Lant Priychett, Divergence, Big Time, The Journal of Economic Perspectives, 1997, 11(3), pp 3-17. Lecture 8: Oct 4** -- The Economic, Social and Political Consequences Of Reforms Across The Middle East Owen (1993): The Economic Consequences of the Age of Reforms, pg 57-82. Special Focus: Taxation Lecture 9: Oct 13 -- Special Focus on Taxation: the Principle Agent Framework, Moral Hazard, Adverse Selection, Credible Commitment, and Property Rights (I) Stanford J. Shaw, The Nineteenth-Century Ottoman Tax Reforms and Revenue System, International Journal of Middle East Studies, 6 (1975): 421-59. Lecture 10: Oct 17 -- Taxation continuation Lecture 11: Oct 18** -- Special Focus on Taxation: the Principle Agent Framework, Moral Hazard, Adverse Selection, Credible Commitment, and Property Rights (II) Douglass C. North, The Paradox of the West, in The Origins of Modern Freedom in the West, edited by R. W. Davis (Stanford: Stanford University Press, 1995), pp. 1-34. Special Focus: Trade Lecture 12: Oct 20 -- Trade between the Middle East and Europe Owen (1993): The Expansion of Trade with Europe, 1800-1850, pg: 83-99. Lecture 13: Oct 31 -- Special Focus on Trade: Basic Trade Theory and Welfare Impact Special Focus: Finance Lecture 14: Nov 1 -- Special Focus on Finance and its Role in Development Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June. Lecture 15: Nov 3-- Financial Reforms and Debt: The Ottoman Empire Owen (1993) The Ottoman Road to Bankruptcy and the Anatolian Economy, 1850-1881, pg: 100-121. 4
Lecture 16: Nov 10 -- Financial Reforms and Debt: Egypt Owen (1993), Egypt, 1850-1882: From Foreign Borrowing to Bankruptcy and Occupation, pg: 122-154. Lecture 17: Nov 14 -- The Levant & Iraq In The Second Half Of The Nineteenth Century Owen (1993), The Provinces of Greater Syria, 1850-1880, pg. 153-179 Owen (1993), The Iraqi Provinces: 1850 1880, pg. 180-188. Lecture 18: Nov 17 -- Economics & History: Bridging the gap Topic III: Colonialism Lecture 19: Nov 21 -- The Economic Impact of Colonialism La Porta, López-de-Silanes, Shleifer and Vishny, Law and Finance, Journal of Political Economy (1998), 106(6), pg. 1113-1155 Acemoglu, Johnson, and Robinson. The Colonial Origins of Comparative Development: An Empirical Investigation, The American Economic Review, Vol. 91, No. 5 (Dec., 2001), pp. 1369-1401 Lecture 20: Nov 28 --The Ottoman Empire: Bankruptcy and Consequences Owen (1993), Anatolia and Istanbul, 1881-1914, pg. 189-215. Lecture 21: Dec 1-- Egypt & the Levant at the end of the Nineteenth Century Owen (1993), The Egyptian Economy, 1881-1914, pg. 216-243. Owen (1993), Mount Lebanon, Syria and Palestine, 1880-1914, pg. 244-272. Topic IV: The Middle East Post-Colonialism Lecture 22: Dec 5 -- Economic De-colonialism and Import Substitution Industrialization Lecture 23: Dec 8 -- The Resource Curse: Oil and Dutch Disease Ross (1999), The Political Economy of The Resource Curse, World Politics, 51, pg. 297-322. Lecture 24: Dec 12 -- The Political Economy of Rentier States Ross (2001), Does Oil Hinder Democracy? World Politics, 53, pg. 325-361. 5
Friedman (2006), The First Law of Petropolitics, Foreign Policy; May/Jun 2006; 154, pg.28. Lecture 25: Dec 15 -- Overview of the region s development, current challenges and the path forward & Recap Robert Springborg and Clement Henry, The Middle East and Globalization: The Political Constraints of Economic Development (2001), chp 2 United Nations Development Programme, Arab Fund for Economic and Social Development, Arab Human Development Report 2002 (New York: United Nations, 2002), overview & chaps 2, 4, 5. ** Out of sequence meeting day (i.e. Lecture on a day other than Monday & Thursday) *** No class on Sep 29, Oct 10, Oct 24. I reserve the right to call for make-up classes on Saturdays and Tuesdays. 6