Bread, water, no Ben Ali – Debating the Social Contract

In a recent article World Bank economist Jean-Pierre Chauffour argues that the transitions in the Middle East and North Africa are a moment when the Arab people can throw off the shackles of economic illiberalism and create a new social contract. I think he has misread the will of the Arab people.

The end of the regime

“Bread, water, no Ben Ali”

I agree fully with his point that this is truly the remaking of the social contract for the Arab world (a 21st Century Social Contract, if you will ;)). Even in countries that are not undergoing widespread unrest or a transition period, it is clear that Arab citizens have changed the way they view their relationship with the state. This is an incredible change to witness.

But he goes on to say:

…what the Arab people and  their leaders, and to some extent the international community, have yet to fully contemplate is that the social contract has to be seen as a whole, and modified as a whole.  With one side of the contract gone (hopefully for good), the other side–i.e., the various social entitlements, privileges and rents—must also go.

If I understand the argument correctly, Chauffour is saying that one cannot make the difference between the destructive, authoritarian leaders, and the paternalistic, subsidy driven states they controlled. With one gone, the other must go too. He calls the continuing of one without the other a “self contradiction” in the movement toward democracy. He uses the slogan from the Tunisian revolution “Dignity before bread,” implying that the uprising was for individual freedom and against the overarching power of the state.

The logic here does follow. When he is referring to the corrupt system of rents and mismanagement, he is absolutely correct – this is a vestige of the past dictators ,and one that the uprisings have rightly fought to replace.

But when he refers to social entitlements, he is stepping into dangerous territory. These social entitlements include basic social services, education for women, and investments in higher education. Another slogan from the protests was “Bread, water, no Ben Ali.” This is hardly the call of a people who would like the end to their bread subsidies.

Wholesale reform or a democratic debate

In my opinion, Chaffour’s point that the social contract has or must be changed as a whole, rather than gradually or in various stages is flawed. The reality is that social contracts are always evolving. Arguably, one has seen a great deal of change in the social contract in the U.S. over the last thirty years with the liberalization of financial markets and the slow dismantling of the welfare state. This has been the result of continuous public debate in America. These debates continue in all democratic societies as people look for more or less state control over their lives.

More critical than a wholesale change in the social contract (the baby with the bathwater), is a public debate over the role of the state as part of the democratic transitions in the Arab world. While economic liberalization will be part of this debate (for and against), it is more important that these transition countries engage in a public discourse upon which the majority of the people can agree on the correct role of the state in their lives.

Indeed, Mr. Chauffour makes this point eloquently:

The opportunity for the young Arab generations to learn, work, save, own, invest, trade, protect, and eventually prosper will critically depend on how the “new” Arab countries strike the balance between freedom and coercion in the new social contracts. Italics added.

Striking the balance – through public debate and democratic elections – is the first and most important step for these newly free countries. The rest will follow.