The Political Economy of Revolution–Egypt

In our last session of IS 210 we looked at the topic, political economy. O’Neil defines political economy as “the study of the role of economic processes in shaping society and history.” The recent overthrow of the Mubarak regime in Egypt is a good case study with which to highlight some of the links between political revolution and political economy. Anybody who has taken a political economy course in political science at the graduate level in the last 15 years or so has almost certainly read Stephen Haggard and Robert R. Kaufman’s influential work, The Political Economy of Democratic Transitions. The authors attempt to answer a series of inter-related questions related to the politics/economics nexus as it appeared to them in the early 1990s:

“What role have economic crises played in the near-global wave of political liberalization and democratization? Can new democracies manage the daunting political challenges posed by economic crises and reform efforts? Under what economic and institutional conditions is democracy most likely to be consolidated?”

Haggard and Kaufman ultimately eschew both liberal theories of modernization and (neo)-Marxist theories of dependency and turn to a rational choice framework that focuses on the strategic actions of political elites–especially presidents and military leaders–under conditions of economic and institutional constraint. In addition, the authors make a few key assumptions, one of which I will highlight here: “…the 0pportunities for political elites to mobilize political support or opposition will depend on how economic policy and performance affect the income of different social groups.” (6) The empirical evidence draws from countries such as Uruguay, Brazil, Argentina, Philippines, Peru, and Bolivia. There argument certainly has relevance for the situation in Egypt today and for the potential for the Egyptian polity to make a successful transition toward consolidated democracy.

Jake Caldwell, Director of Policy for Agriculture, Trade, and Energy at American Progress, and coauthor of The Coming Food Crisis, has written recently about the daunting economic challenges facing any new government with respect to food security. In the midst of rapidly increasing global commodity prices–especially foodstuffs–the government must find a way to continue to feed its people, many of whom live on less than $2/day in income. Caldwell writes:

“Egypt has spent $4 billion a year, or 1.8% of GDP, on its bread subsidization program in an attempt to insulate the 40% of Egyptians living on less than $2 a day from inflation. But prices continue to rise…

…Egypt faces daunting challenges as it prepares for broad presidential and parliamentary elections within a year. Ongoing volatility in global food prices will strain resources during this critical transitional period.

As the world’s largest importer of wheat, Egypt is acutely vulnerable to any surge in food prices. Wheat prices have risen 47 percent over the last year and other staples are rapidly approaching dangerously high levels.

Food price inflation and volatility strike hard at the household budgets of average Egyptian families. Many of them spend 40 percent of their monthly income on food. As prices rise, purchasing power is eroded, and the recovery of Egypt’s fragile economy during the transition is slowed.”

How much time will the new Egyptian government have to provide food security for the Egyptian people before the polity’s patience with democracy is compromised? Or is the public yearning for democracy and liberty so strong that economic crisis will have little effect on democratization in Egypt going forward?

Social Network Media and Revolution

In the wake of the revolutionary changes that have (hopefully) taken place in Tunisia and Egypt, much has been made about the role of social media–particularly Facebook–in facilitating the participatory aspect of the revolutionary end-game. (A Google search of `Facebook AND Egypt revolution’ turns up over 22 million hits.) The Globe and Mail’s  Chrystia Freeland is the latest journalist to address the phenomenon, quoting economists Daron Acemoglu and Matthew Jackson.

Freeland notes that social network media have helped resolve what social scientists refer to as the collective action problem.

“It is a question of co-ordinating people’s beliefs,” said Daron Acemoglu, a professor of economics at the Massachusetts Institute of Technology, who, with Matthew Jackson of Stanford University in California, is working on a paper about the effect of social networks on collective action problems.

Protesting against an authoritarian regime is a prime example of this issue, Mr. Acemoglu said, because opponents of a dictator need to know that their views are widely shared and that a sufficient number of their fellow citizens are willing to join them to make opposition worthwhile.

“I need to know if other people agree with me and are willing to act,” he said. “What really stops people who are oppressed by a regime from protesting is the fear that they will be part of an unsuccessful protest. When you are living in these regimes, you have to be extremely afraid of what happens if you participate and the regime doesn’t change.”

That makes publicly protesting an oppressive regime a classic collective action problem: If everyone who wants regime change takes to the streets, the group will achieve its shared goal. But if too few protest, they will fail and be punished. Even if an overwhelming majority wants change, it is smart for individuals to speak out only if enough compatriots do, too.

To Freeland’s characterisation of the collective action problem I would add that the reason it is “smart for individuals to speak out only if enough compatriots do, too” is because each individual reasons in the following manner:

  • I am only one person; my individual marginal contribution to the probability of having a successful revolution is infinitesimally small.
  • Thus, my taking part or not will not be determinative. That is, the revolution will succeed or fail regardless with or without my participation.
  • Given the above, and given potential costs of participating, it is rational for me to not participate.

Social media, however, can help to change the calculus of participation by assuring the would-be participant that millions of others will also participate, thereby decreasing the potential costs of participation to any one individual. I do have an issue, however, with Freeland’s use of the Groupon analogy, which is based on the difference between the types of private goods Groupon specialises in and the truly public good that is a revolution.