In possibly only two instances could recent events in the region be stretched to suggest anything near the democratic transition stage, Yemen and Algeria (prior to their instability). The rest of the region falls at various points along the liberalization/regime opening stages. To compensate for this narrow empirical target, this essay takes some liberty in postulating the potential effect of external factors on the later, more substantive phases of the democratization continuum. The works of Albert O. Hirschman and Giuseppe Di Palma in this respect are particularly applicable.[4] By pushing past the confines of structural and theoretical obstacles, their collective scholarship stresses " possibilism" in the cause for democratization.

CULTURAL DIFFUSION AND DEMONSTRATION EFFECTS

Cultural diffusion entails the travel of constituent ideas of an ideal democratic polity through the myriad of today's communication mediums. Demonstration effects, or "snowballing" as Samuel Huntington terms it,[5] refer to the rippling effects from a nation or group of nations undergoing significant liberalization or outright democratization. Both factors, while conceptually distinct, share several characteristics in the context of the Arab World that warrant their combined treatment. First, both diffusion and demonstration effects can impact all levels of society in a given Arab country, though demonstration effects tend to have a more measurable impact on state elites. Second the factors tend to be coupled in their impact, for often demonstration events amplify external cultural values and prejudices. ]Effects of diffusion tend to fall primarily at the later stages of transition and consolidation where some semblance of a vigorous civil society is necessary to drive the process. Demonstration effects, however, can impact all phases of transition including the regime opening. Arab intellectuals and dissidents, prime recipients of cultural diffusion and demonstration effects, would in all likelihood play key roles in such a process.

Because cultural diffusion defies case study analysis, demonstration effects will first be discussed within case examples and then the general phenomenon of cultural diffusion in the Arab World will follow. While possibly not exhaustive, the following dynamics are usually offered as demonstration effects: the events of East Europe and the former USSR as a demonstration in general; the effects of the failed Algerian experiment on other Arab countries; and the experiments in Kuwait, Yemen, and Oman on the rest of the Gulf.

The fact that the dramatic events in Eastern Europe and the former USSR have had global impacts is obvious. On one level, the failure of state socialism is a very powerful negative demonstration effect. The apparent failure of viable alternatives to democracy around the world cannot go unheeded. Even among the newly industrialized nations of Southeast Asia, the model of economic progress through benign authoritarianism is coming under increased pressure by a populace unsatisfied with just economic growth without a voice in governance.6 The assumption is that increased global democratization has helped advance an international consensus on democracy, a consensus easily felt by the Arab populace and elites alike. This is a consensus which argues not necessarily that democracy is a panacea for all ills, especially economic, rather what "stands to reason" in governance is no longer the coup or reversion to some brand of authoritarianism but the methods of democratic bargaining where competing groups have the best chance to secure some agreeable compromise[7] The events in the former socialist bloc, in this sense, do not necessarily hold up a paragon of democratization but rather debunk alternatives to it. On another level, in the immediate aftermath of the events of 1989 some Arab liberals were too quick in their optimism for a democratic opening in the Arab World.[8] What was missed was the possibility that while negative demonstration effects may structure a consensus overtime, its effects are hardly immediate. For a time at least, inaction can be a choice of regime elites.

The sad reality has been that overall the democratization of Eastern Europe has had little impact in the form of a demonstration effect for the Arab World. At the societal level, differences in the relation to the state and lack of a sympathetic identity with East Europeans has proven an obstacle to the democratic contagion. There was little societal contact between the two regions prior to 1989 and hence little shared exchanges. Moreover, because of structural and leadership in congruencies, the model of democratic transformation presented by Eastern Europe has proved generally useless as a strategy to those aspiring for such a transformation in the Arab World.

In comparison to Eastern Europe, the events in Algeria and the ongoing experiments in Yemen, Kuwait, and Oman have received little world attention, but in the Arab context these phenomena have deep impacts. The demonstration effect from Algeria cuts both ways, positively and negatively. Clearly, one negative implication from Algeria's demonstration is ruling elites cannot allow true democratization for it threatens their hold on power and more importantly suggests the advent of a leadership (Islamists) which might actually exact retribution for past oppression? This interpretation is most evident among Tunisian, Moroccan, and Egyptian elites, where shared concern and to some extent shared efforts against Islamists have been the case. In a more positive light, Algeria's experience shows Arab society that Arab elites can entertain democratic experiments despite current obstacles. Additionally, the Algerian demonstration may give other Arab democrats valuable lessons. Among the most important is the need for restraint on the part of reformers; thus, when the transition process nears it is best not to make calls for purging the military, a point made by many theorists based on the lessons of transitions in 'Latin America. Therefore, even if a demonstration ends in a failure it may still play a vital role in a learning process for aspiring democrats. Other more unambiguously positive demonstration effects can be seen in the Gulf.

While the post-war reform efforts in Kuwait have received global coverage, the extent and profoundness of Yemen's progression toward democratization is hardly appreciated outside the Arab World. For a time among the Gulf Arab states Yemen's free and outspoken press drove home the example of this unprecedented electoral experiment in the Arab World. Much of its role as a demonstration fell on its powerful northern neighbor, the Kingdom of Saudi Arabia. Parts of the Kingdom receive televised broadcasts of Yemen's alarmingly free (from a Saudi perspective) parliament proceedings.[10] Recent problems between Yemen and Saudi Arabia over oil rights, border disputes, and the expulsions of Yemeni migrant workers are, in the eyes of many Yemenis, proof positive of a Saudi family fear of Yemeni democratization. While these disputes reflect more than just a simple Saudi fear of Yemeni freedom, these and other Saudi reactions nonetheless suggest the role of intra-Arab demonstration effects.

By contrast, Kuwait's more gradual reform process may appear to convey a "lighter" demonstration effect. In reality however, Saudi and Gulf elites probably believe they have little to learn from underdeveloped Yemen whereas Kuwait with its monarchy and shared oil history does present an uncomfortable reflection.[11] In March 1992, King Fahd of Saudi Arabia gave an unprecedented interview in a Kuwaiti newspaper. In the interview, Fahd stated that despite his earlier announcement of the formation of a 60-member consultative council: "The democratic system prevailing in the world does not suit us in this region [italics added] . . . . The nature of our people is different. . . . We have our Islamic ideology. The system of free elections is not part of Islamic ideology."[12] While there is certainly a domestic aim in the King's comments, the facts that the interview was given in a Kuwaiti newspaper and the term "region" was used as opposed to "Saudi Arabia" suggests that the Kuwaiti and Yemeni experiments have a definite impact on elite perceptions.

Fahd's decision on 8 November 1990 to renew a promise for a consultative council originally made in 1962 was preceded by Sultan Qabus' announcement of an expanded council for Oman. Moreover, following the petition tactics of intellectuals in these counties, Qatari intellectuals submitted their own petition for free parliamentary elections in January 1992. 13 Admittedly, these represent limited moves toward liberalization, but they reveal a shared concern over events outside one's borders within the Arab Gulf. Also, it is apparent that renewed Kuwaiti rumblings for a free parliament, once liberation from Iraq was achieved, contributed to the external pressure and demonstrations for other Gulf opposition groups to follow.

Successful demonstrations also communicate norms of behavior and expectations stressing restraint, bargaining, and compromise. This invites broader consideration of the effects of cultural diffusion, because cultures are hardly impenetrable cocoons but are subject to various external influences. At the elite level, cultural influences form the backdrop to decision making and potential compromise with opposition elements. At the mass level, expectations for reform can take root from the influence of cultural biases. However as stated previously, cultural diffusion is the most nebulous of the categories, both from a conceptual and empirical point of view. It is impossible to determineb exactly which altitudinal patterns are the result of which influence. Thus, one must be satisfied simply to postulate the connection in the absence of accurate measurement, taking account instead of the modes of cultural diffusion.

In his brief treatment of Arab-Islamic culture, Samuel Huntington has rightly concluded that, "Islamic doctrine thus contains elements that may be both congenial and uncongenial to democracy."[14] Cultural diffusion can assist in a strengthening of those positive elements. It is beyond the scope of this essay to examine what cultural attitudes are best suited for democratization; rather the emphasis is on how these attitudes are communicated to and within Arab-Islamic society. Radio, television, and particularly the press are all powerful modes of transmission. However the most immediate mode resulting in very observable effects is education in the West and the academic/intellectual exchange of ideas. "Westernized" intellectuals, Islamic scholars, and commentators, continue to play key roles in Arab political discourse. Leonard Binder highlights the role of the French-educated, Moroccan intellectual Abdallah Laroui. Laroui and others like him seek a dialogue with Western liberalism to reform Arab-Islamic traditions in favor of democracy.[15] There are no guarantees in what direction such a fusion would proceed, but undoubtedly diffused norms will play a role.

Not only are intellectuals key bridges for diffusion but of growing importance are the youth of the Arab World. Education abroad and exposure to an international perspective are proving powerful forces in shaping the next generation of Arab leaders.[16] Young Saudi women rejecting arranged marriages[17] and the thoughtful eloquence of young Arab scholars recorded in Kevin Dwyer's book Arab Voices testify to these dynamics. Despite receiving little attention from a Western press more interested in reporting the virulence of extremists, some of these quarters have succeeded in organizing to press their ideas on society and the government.[18] Given these observations on cub rural diffusion, two points follow. First is the obvious conclusion that the battle over the ideas of governance has already been joined not only within secular circles but within religious ones as well. There are, in other words, a plethora of "Arab voices" involved; extremist, restrained, and traditional. A second point is to note the transmission of cultural ideas need not imply convergence with ideals of Western liberalism but simply a positive addition to the myriad of influences reshaping Arab attitudes toward what is reasonable governance.[19]

To conclude, demonstrations and diffusion prove the weakest as they rarely if ever spark a regime opening. It is of course possible that in the future some dramatic intra-Arab demonstration (something akin to the fall of the Berlin Wall) may prove powerful enough to spark other openings. What is sure is that once a democratic opening has been forged, the cumulative effect of these external forces can go a long way in influencing the perceptions of those actors whose responsibility it is to craft the rules and solidify the concessions which make democratization a reality.

FOREIGN GOVERNMENTAL POLICIES AND AID

Foreign policy in this instance refers to all the tools of the diplomatic trade between nations, while aid refers more specifically to the financial resources committed to that policy. In his recent book The Third Wave, Samuel Huntington ascribes a significant role to policy pressures from the West in many recent democratic transitions. These transitions for the most pan occurred in Europe and Latin America, two regions particularly vulnerable to Western, specifically American, pressure. Huntington goes on to add that the comparatively distant position of the Arab World has meant that such pressures were not felt there; and he further speculates if in the wake of the Gulf War the U.S. were to station troop in the Gulf "an external impetus to liberalization" would occur.[20] Huntington of course misses the point that previous American policy for democratization weakly affected the Arab World because it was not directed at the Arab World. Conversely, it is an overstatement to charge, as did Edward Said recently, "I know of no U.S. policy that supports local human fights movements, feminists, or independent and critical thinkers."[21]

Theoretical discussion of the possible role foreign pressure plays is limited. In general, government policy is viewed as either too ill-conceived to have a positive effect, or driven by other covert interests not at all concerned with democratization. Still a contextually sensitive policy and application can not only influence regime elites seeking Western government goodwill but feasibly in some cases impart the kinds of opposition skills desperately needed by groups in the Arab World.[22] Withholding aid can also play a similar role. When considering the effects, however, foreign policy pressure alone is certainly insufficient to force a regime opening, but it can go a long way in alleviating perceptions of hypocrisy in Western, principally American, foreign policy toward the Arab World and thus create a more conducive environment for future progress.

Of the many positive results from the end of the Cold War is the rapid decline of the Third World as a stage of ideological superpower conflict. Many former "hot spots" in the Third World have therefore lost their appeal as a greater degree of "pluralization" in foreign policy making is taking place in Washington.[23]There is the hope then that in some instances U.S. policy may undertake a more forceful stance in favor of democratization. Strands suggesting a more hopeful turn began in 1983 with the creation of the National Endowment for Democracy (NED), an independent agency not formally part of the U.S. government but which depends upon it for funding. The NED's charter is straightforward: to assist the advancement of democracy around the world. Under the NED are four core grantee, non-profit organizations. One of the four, the International Republican Institute (IRI, tied to the Republican Party), has been the most active in the Arab World.[24]

IRI activities in the Arab World consist of country reports examining the pace of democratization, funding of regional groups dedicated to democratization, and seminars in-country where opposition parties are trained in campaigning, electoral strategies, and publicity. To date, the IRI has conducted country surveys of Egypt, Kuwait, and Jordan; provided assistance funding to various groups in the Gulf and Kuwait; conducted programs with opposition parities in Kuwait; monitored elections in Yemen; supervised an exchange of Yemeni parliamentarians; and has currently initiated programs in Morocco and Oman. These activities are all held with the cooperation and sometimes insistence of the host regimes, but the results are not always as expected.[25] IRI activities in post-war Kuwait are a case at hand. In February 1991, the IRI concluded its report on democratization in Kuwait, and at the request of prominent Kuwaiti citizens, prepared for more substantial cooperation with Kuwaiti opposition groups after liberation. The kick off for this project began with a conference held in Washington in April 1991 on political participation in Kuwait.[26] From this meeting, actual conferences and workshops were planned. Three training workshops, entitled "Democratic Development in Kuwait," took place in February 1992 with the cooperation of the Kuwaiti Graduates Society in preparation for the October parliamentary elections. The IRI returned in May to host a second round of seminars at which time the Kuwaiti government canceled the meeting with no real explanation.[27] While the State Department registered low-level discontent with the move, there was no strong, overt U.S. reaction. Instead, over the next few months the U.S. Ambassador to Kuwait, Edward Gnehm, stepped up his visits to evening diwaniyahs and contacts with opposition groups. This eventually drew an angry response from Abdul-Aziz Masaeed, an interim legislator, who complained in an interview that the U.S. was interfering in Kuwaiti affairs. Most observers believed that his attitude was shared by some in the royal family.[28]

Such reactions suggest that even these low-level activities in favor of democracy were having an effect, at least in the eyes of the Kuwaiti leadership. Of come, a paramount concern must be that such activities --since they are taken up by government sponsored organizations, however insulated from direct policy making -- be attentive as much as possible to relations between internal actors. Without such careful consideration, external agents can generate animosity against the very opposition forces that are being aided by unknowingly having them identified as American or Western agents. In addition, the U.S. political commitment toward democratization in a strategically vital region is often less than coherent. For instance, the U.S. was careful not to intensify the debate once the Kuwaiti government made a stand. And in response to Saudi Arabia's unveiling of its meek reforms in March 1992, the State Department hailed it as "a very important step."[29] Moreover, unto themselves the initiatives for democracy exhibit their own shortcomings. Principally, there is no definition of what a democratic opposition party is for the IRI, and so, often Islamist or perceived anti-American parties are not invited to the workshops. Finally, there is the position that a foreign policy interest in democracy should take a back seat to concerns of strategic stability. Thus, Jonathan Paris argues, " A gradual approach to democratization makes even more sense in those areas of the Middle East where the United States has other vital interests. "[30]

The most effective response to this essentially realist approach comes oddly enough from one of the keenest observers of power politics. Stanley Hoffman makes the common sense observation, "We must remember the connection between the way in which governments treat their own people and the way in which they behave outside."[31] Policy shifts away from support of undemocratic states does not sacrifice stability but rather strengthens states by entreating them to deal with their people. Given the recent review of U.S. foreign assistance programs, it is not unreasonable to suspect greater moves toward a more central and coherent policy regarding democratization in the Arab World.[32]

The narrower case of Kuwait demonstrates at once both the chance for similar progress at affecting elite opinion in the Arab World and the particular difficulties and sensitivities which such an endeavor entails. Successful pressure helps raise the costs of internal repression, holds out rewards for greater liberalization, and to a degree assists domestic democrats in their struggle against anti-liberal elements.

NON-GOVERNMENTAL ACTIVITIES

Human rights organizations are not new; however, their increased presence and concern with the Arab World is a recent shift. In all, some dozen international human rights organizations have departments committed to the Middle East.[33] Pressure brought by such non-governmental organizations (NGOs) on Arab states has a distinct advantage over that brought by agents of Western governments -- a perceived purity of purpose. At the same time, because such groups do not have the formalized support of a major Western power, their activities are often circumscribed or restricted within the country. Despite this constraint, NGOs pressing for human rights in the Arab World have grown significantly over the last decade and the pressure they bring to bear is not ignored by Arab regimes. Nor have their efforts and effects been ignored by theorists.

The O'Donnell and Schmitter volume on transitions notes that human rights groups "raise the perceived costs of repressive action against them [regime opponents] and makes them feel that they are not entirely isolated."[34] This dynamic goes some way in fulfilling Robert Dahl' s maxim that a regime will entertain policy change when the perceived costs of repression outweigh the perceived costs of toleration. As a regime limits its repressive methods because of such pressure, the way toward the democratic bargaining table may be made clear. Moreover, external human rights pressure has assisted Arab human rights organizing. This can result in pressure from below and above on regime elites to entertain a new direction. Often this organizing is accomplished through joint conferences held outside the Arab World with participants from international organizations offering assistance to Arab human rights activists.[35] Internal Arab organization further lends itself to the kind of "social energy" at the grassroots level Albert Hirschman identified with Latin American social movements.[36] Unmeasurable and amorphous, this social inertia emboldens opposition groups to push the limits of state-society relations, eventually turning and forcing the regime back to the toleration/repression calculation and hopefully to the bargaining table.

Human rights organizations operate on the conviction that bringing abuses out into the light of day is the most powerful weapon in curbing such actions. NGO activities in this area are conceptually akin to both foreign policy factors and cultural diffusion. Sometimes NGO pressure is coupled with foreign policy pressure.[37] Furthermore, born as it was of Western concern and conviction, the human rights campaign itself is a form of cultural diffusion. Often leaders of the Arab human rights organizations are themselves educated in the West or have extensive contact with Western groups. Arab human rights groups in addition agitate not only for basic rights, but often their demands call for outright democratization.[38] In the words of Bahey Eddin Hassan, secretary general of The Arab Organization for Human Rights (AOHR) in Egypt: "I discovered that I could not work to improve freedom of the press in Egypt without improving the whole human rights situation. There is no way to improve one area and leave the others. "[39] And though certain Arab circles may criticize human rights organizations for a perceived imperialist, ethnocentric plot, as will be shown below, few political leaders deny the efficacy of its ethos and the validity of the United Nations Universal Declaration of Human Rights upon which all human rights activities are based.

Observers of human rights activities in the Arab World concur on the significant role international organizations have played in fomenting and assisting the establishment of analogous groups in the individual counties. In most instances, these organizations and local branches of Amnesty International base their charier on international standards and goals, implicitly "linking their cause with the international one."[40] Between the international organizations and these regionally based groups there is something of a symbiotic relationship. International groups depend on local groups for the bulk of their information, while local groups depend on the international for publicizing their plight, assisting intra-Arab organization, and most importantly, pressuring the Arab regime to lessen its repression when the local group is persecuted. In raising the price of oppression, international human rights actions often interject themselves on the side of dissident groups battling for representation. This dynamic of external involvement in state- society relations is one which receives little analysis but there is evidence nonetheless, predominately in the Maghreb.

In the spring of 1989 King Hassan II of Morocco, after growing international pressure, invited Amnesty International to send an official delegation to his kingdom, a rare invitation among Arab leaders. Much to his discomfort, the report later released by Amnesty detailed abuses of the regime under garde-a-vue detention.[41] In response to the report and other internal pressures, Hassan ran lengthy rebuttals in the world's major newspapers and in May announced the foundation of a Royal Organization of Human Rights. During his announcement Hassan noted his government's sensitivity to international human rights pressure:

Morocco has always had the ambition to occupy a respectable place within the international community . . . considering itself as living in a civilized society side by side with advanced countries. I beseech you help me restitute his right to he whose right has been violated and help me so we can all raise our country to the rank of civilized nations where the state of rights reigns.[42]

In December 1988, the Moroccan Human Rights Organization (OMDH) attempted to hold its first public meeting. The group came under intense government pressure to compromise and not hold the meeting. These government tactics were meet with strong external pressure in the form of press coverage from groups in France and elsewhere to allow the meeting to go forward. Under the international glare Hassan backed down, and on 10 December (a day coinciding with the fourteenth anniversary of the UN Deceleration of Human Rights) the meeting was held and the OMDH was publicly founded.[43]

While changes in discourse do not always imply a change in policy, the effort to bring human fights concerns to the forefront can have important impacts later. If and when the democratic bargaining between and among opposition groups and the regime occur, a common discourse, concern, and awareness of human rights -- and its constituent democratic values -- may ease that process since certain conceptual standards may already be set. Clearly, human rights activities contribute to raising the cost of repression through the glare of international publicity and its concurrent effects on international relations and standing. To date, however, there have been some setbacks; Algeria and Tunisia, once leaders in the Arab human fights campaign, are now illegally imprisoning thousands of Islamists. International organizers are aware of potential setbacks but generally exude confidence: "It' s a worldwide trend . . . . The Arab World has been late to come to it, but there is a recognition that human rights are a critical element of the advancement that Arab countries seek."[44]

REGIONAL SECURITY ENVIRONMENT AND REGIONAL ACTORS

An insecure regional system or insecurity deriving from the policies of a regional hegemon can negatively affect democratization. Excessive spending on the military due to regional insecurity and conflict have warped economic and political development in the Arab World.[45] This has been manifest in two ways.

In the first instance, the familiar argument that excessive state spending on the military takes away from funds spent on economic development remains salient. A strong empirical correlation between robust, decentralized economic development and the tendency toward more successful democratization highlights the adverse effect of warped economic development.[46] Sallow economic development or dislocation does not make for hospitable socio-economic conditions for reform. The psychological and political correlates of the response to an external threat, be it Israel or other, likewise shifts emphasis away from debate over representation and leads to a militarization of state-society relations. Survival of the regime becomes paramount over creation of reliable state-society mediation. The army as protector of the regime and prime institution of socialization thus looms large in many Arab states, and often it is the army that fears the potential instability of any democratization of state-society relations. In the second instance, the policies of regional powers can pressure a liberalizing state and externally impose higher costs for further toleration and representation.

Though the military per se does not hinder economic development, it is the type of investment which is of importance.[47] Generally, expenditures do not involve capital investment in the private sector and instead take away from public spending on areas of infrastructure and human capital. Lisa Anderson's work highlights this disfiguring characteristic.

Government spending priorities in the Middle East reflected not only the absolute number of local conflicts but also, and more importantly, the willingness of both superpowers and the local regimes to deal in goods and services that fostered those conflicts to the detriment of domestic development programs and projects. Indeed, eventually civilian development -infrastructure, industrial, even education - - was to be justified by its contributions to the defense effort: "development" became identified with "security."[48]

Excessive spending on defense can then result in a "crowding out" of the private sector limiting the formation of independent political spheres of power able to influence a regime opening.[49]

Moving from the regional security dynamic to the second instance of external pressure -- regional actor pressure -- the most notable example of late is Saudi Arabiar.[50] As discussed previously, Saudi Arabia' s own external vulnerability has meant that its leadership is acutely aware of the demonstration effects and cultural pressure wrought from regional moves toward democratization. Ironically, the leadership also probably realizes that such vulnerability is a two-way relationship due to increased Arab interdependence over the years. Saudi Arabia is by far the most important official aid donor in the Arab World, [51] and of course a large source of worker remittance for poorer Arab nations. This fiscal power gives Riyadh significant leverage to disrupt domestic economies and endanger nascent moves toward democratization. A case at hand is Saudi pressure on Yemen.

Prior to unification, the two Yemens were particularly dependent on external aid and worker remittances (most of them from Saudi Arabia) for a large portion of their GNP. Worker remittances alone over the period 1973-1989 accounted for a cumulative 18.0% of the GNP for Northern Yemen and 34.9% for Southern Yemen.[52] Consequently, the Kingdom' s expulsion of some 850,000 Yemeni workers during the second Gulf War dealt a severe blow to an already weak post-unification economy. One U.N. study estimated the cost of the Gulf War to the Yemeni economy as near 20% of its GNP.[53] Saudi pressure is evident in other forms as well. Banking on eventually increasing its oil production output from its current 200,000 bpd to upwards of 800,000+ bpd, Sana'a is hoping that this will solve its economic and political difficulties. Much of the hoped for oil however is located in area along the Saudi- Yemeni border where Saudi Arabia brought pressure on some oil companies to cease exploration. The Kingdom is also suspected of arming tribes in the region to foment unrest, launching several provocative military maneuvers in the area, and secretly agitating growing tribal rivalries which have resulted in several assassinations over the last two years. [54]

While Saudi pressure cannot fully account for Yemen's renewed civil strife, the difficulties it caused during those opening stages of democratization were crucial. Many theorists emphasize the importance of the first open election as proof that engaging in a democratic bargain can have real and unprejudiced results. Saudi pressure made those initial domestic agreements between the North and South all the more tenuous and fragile. Despite successful national elections, Yemeni elites were unable to solidify further compromises toward a more secure democratic union. Therefore, the increased cost from externally imposed instability cannot be ruled out as contributing to Yemen's abandonment of democratic bargaining in favor of a new civil war.

Given the two Gulf Wars, Iran's recent agitation in the Gulf, and Saudi Arabia's new found preeminence, the negative impacts from the regional security dynamics and would-be regional hegemons do not appear to be subsiding. But while the adverse security environment will most likely continue as a salient feature of the region, this factor need not be decisive. An Ara Msraeli settlement could go a long way in casing at least the most public justifications for societal militarization. Moreover, existence in a highly insecure environment and vulnerability to bloated military institutions does not rule out domestic reform. Both Taiwan and South Korea arguably compare in both respects to the states of the Arab World and yet they have begun nascent democratization. Comparative analysis in this regard would be illuminating. A key contrast with the Asian countries and much..of the Arab World is the greater degree of economic growth and independence, and it is such economic factors to which most scholars attach the greatest importance.

INTERNATIONAL ECONOMIC ENVIRONMENT AND POLICY

This section encompasses two distinct pressures which are argued to be the most powerful external factors shaping democratization in the Arab World. The first pressure to be felt is changes in the international economic environment, specifically the construction of external rents. The second pressure, a resulting dynamic of the first, is the International Monetary Fund (IMF) and the World Bank policies tied to the loans which they dispense. It is the question of impact around which much debate has arisen; specifically whether MF/World Bank policies or the disequilibrium of the international economic environment result in positive moves toward economic liberalization and eventual democratization or whether these policies hinder economic performance and cream contradictory circumstances under which democratization is hardly possible and social breakdown more likely.

The cases of Egypt and Algeria will suggest that while external economic factors alone cannot affect change, there are grounds for hope. Contradictions may arise from external economic pressure, but the cumulative effect of international pressure (environmental and policy driven) for reform can be shown to have pushed Arab elites toward granting greater and greater economic participation, participation which holds out the chance for greater political participation. Therefore, this analysis falls in line with the liberal assumption that greater economic privatization coupled with genuine economic freedom generally correlates strongly with the evolution of a strong, pro-democratic middle class and the formation of alternative centers of political power. From a comparative perspective, such diversification of power stands as a vital ingredient during the transition processes.

The language used here should convey that the links of causality are hardly clear cut, such that economic liberalization has to lead axiomatically to political liberalization. Much of this is dependent on the extent of economic freedom and various internal variables such as institutions. This in mind however, there is little persuasive discourse in the literature today arguing for the converse, namely strong state redistribution either prior to or parallel with democratization. The best bets lie with the acknowledgement that economic liberalization/privatization and democratization reinforce one another in a variety of ways.55 The crux of the debate becomes then whether external pressures can contribute positively to this dynamic.

Literature on the subject of political-economic development generally concurs that the Arab state has pursued policies of state-led growth. This was partly driven by the socialist ideology popular with decolonizing Third World states of the day and also by a calculation that the private sector was ill prepared to hake up risk and invest.[56] The resulting reliance on state expansion and import substitution strategies led to price distortions and ever increasing budget deficits. State expansion and larger budget deficits were financed not through greater domestic revenue gathering but rather through external rents derived from single exports (i.e. oil), aid from superpower patrons, levies on transport, etc. Hence, the well-known theoretical concept of the tentier state became a defining characteristic of most of the Arab states. For the prospects of democratization, this aloofness of the state means that demands for greater participation are reduced, for the state does not rely on domestic production for revenue.[57] Rent seeking as well means statism is pervasive and this has equally deleterious implications for democratization. Larry Diamond's assertion on this point, though not aimed specifically at the Middle East, is worth recounting for its similarity to development in the region particularly in the cases of Algeria and Egypt.

By crowding out economic competition firm the private sector, it [the state] prevented the emergence of an autonomous, productive (rather than parasitic) bourgeoisie. By subjecting virtually all developmental activity to state mediation and control, it made community as well as individual advancement dependent on control of the state, heightening inequality and political tension between ethnic and regional groups. [58]

However, as the external environment shifts (constriction in trade, oil price slump, superpower collapse) many Arab states became racked with greater and greater debts adversely affecting the domestic economy and forcing regime leaders to borrow abroad. Loans from private sources become nearly impossible as the debt load begins to far outstrip payment capacity. Taking for example the debt service ratio[59] of select Arab countries in 1991 clarifies the problem: Algeria (53); Egypt (29); Jordan (31); Tunisia (21); Morocco (30); and Yemen (19).[60] With fewer and fewer external sources available, the rentier Arab states have three general options:[61] (a) turn toward the West and the IMF/World Bank for debt relief[62]; and/or (b) begin a shift toward greater internal revenue enhancement; or (c) muddle through with half measures derived from the two previous choices and barter political concessions with external actors for economic gain. A positive and negative case for democratization can be made for all three.

Although option (a) implies option (b), it is conceivable that a regime (Rumania in the extreme case) may opt to pursue only option (b) without international assistance. Risks in option (a) are two-fold: either policy guidelines from the IMF/World Bank are insufficiently sensitive and thus yield adverse political-economic results, or the policies are improperly (deliberately or not) applied by the host regime resulting in further economic stagnation. If option (b) is the case, the literature on the rentier state argues that to garner greater domestic revenue the state will have to grant greater participation and be "forced to face the unpleasant prospect of holding themselves accountable to taxpayers."[63] If option (c) is chosen, haft measures may go some way in creating a revolution of growing expectations. It may as well create increasing frustration and deadlock over the lack of progress in any direction. Deadlock may act to undercut the conditions necessary for successful reform, but a way out can be argued.

A new way may emerge of looking at the costs of toleration versus those of resistance and repression. Toleration may still seem costly, but if resisting change tams out, by its total ineffectiveness, to be incomparably more costly, then toleration may invite a second look. [64]

Possibly as well, the state may, because of bureaucratic ineptness, simply and incrementally back itself into genuine liberalization. Temporary reforms may create their own movement eventually outstripping the ability of elites to control them adequately. All of these potentialities augur well for the possibility of regime opening and democratic bargaining. The case of Algeria represents an initial pursuit of option (b) and a turn later toward selected elements of option (a), while Egypt has clearly chosen to pursue option (c). For Algeria the connection between external economic forces and internal political liberalization is stronger than in the Egyptian case where important internal variables have distorted the connection. Nevertheless, contrasting the two cases is insightful in demonstrating the case of direct positive potentialities from external economic pressure (Algeria) and the case where despite resulting deadlock a way out can be envisioned (Egypt).

With the death of President Boumedienne in 1978, his successor Chadli Benjadid quickly became familiarized with the trappings of a massive rentier state loosing its grip. In the late 1970s the Algerian state could invest the equivalent of 25-30% of its GDP annually, but with declining oil reserves and sluggish commodity prices, external debt was increasing rapidly as the state borrowed from private creditors to maintain that level of state investment.[65] Constraints on external economic resources did not improve and by 1986 Algeria was viewed as a poor risk by private international lenders.[66]

Eschewing restructuring assistance from the IMF (which would to Algerian leaders mean a surrendering of sovereignty), Algeria nonetheless began an aggressive liberalization program to expose operations of the state to market forces. By the summer of 1988, Benjadid extended reforms to curbing imports (much in line with what IMF recommendations might have been) as a way to ensure private creditors of his continued efforts and, by extension, as a way to avoid facing IMF assistance.[67] During this period of reduced investment social unrest grew; strikes, student protests, and mass arrests signalled a growing discontent with disjointed measures and no progress. After riots erupted in October 1988, Benjadid responded by promising "greater democratization of political activity" and a national referendum to approve a change in the constitution. [68] Corresponding pressure from his private international creditors compelled Benjadid to come to agreement with the IMF, and in May 1989 Algeria and the MY agreed on a stand-by loan package. At this point Algeria can be said to have moved into option (b), and interestingly this gave the regime apparently greater leverage against anti-liberalizing elements, for now the government could rely on an IMF "bad cop."

From this period the IMF worked closely with the Algerian government in crafting even more extensive Fiscal reform and greater privatization. [69] These aggressive policies won significant praise from IMF officials and resulted in the extension of more loans in late 1989 and 1990. Unrest and crackdowns on the FIS in June and July 1991 led to the formation of a new government led by Prime Minister Sid Ahmed Ghozali. The pace of economic liberalization picked up even more as elections within the next year approached. To support Algeria's stability in the aftermath of the June/July unrest, the EC drew up a rescue package of $906 million, and France created its own bi-lateral aid package organized by Credit Lyonnais.[70] Bolstered by renewed international support, Ghozali unveiled plans for an extensive privatization of Algeria's oil industry, and most importantly, introduced a new tax structure which for the first time included an income tax, a corporation tax, and a value added tax.[71] True to form, the constriction of external rents coupled with international creditor pressures pushed the rentier state toward greater domestic revenue collection and a concurrent increase in demands for political participation. The election debacle in January 1992 aborted this progress, but the prominent role played by external factors in guiding the regime toward the precipice of true democratic bargaining was clear.

While the IMF played a belatedly prominent role in Algeria's reforms, the Algerian government was careful to stay ahead of the IMF in proposing reforms so that it would not be forced into another stand-by agreement that would allow greater intervention by the international community. Egypt presents an opposite case in that the IMP holds greater leverage due to more outstanding IMF loans, but the result has not been greater or more extensive reform.

The hypothesis of economic liberalization evolving into extensive political liberalization has long been anticipated in the case of Egypt. In the words of Raymond Hinnesbusch: "Although a massive bureaucratic state is sure to dominate for a long time, centers of private economic power should continue to expand under infitah (opening). In time this trend is likely to give rise to a countervailing power, the social basis for further political liberalization."72 Prior to 1987, policies of infitah were primarily internally driven. After 1987 and the conclusion of a stand-by agreement with the IMF, international creditors became more significant players in Egyptian liberalization policies. Until the intensification of the external constriction of revenues forced Cairo into an agreement with the IMF, Egypt's infitah policies were hardly extensive. "The country was opened up to investment, but very little was done to dismantle or weaken state control over the economy. "[73]

By November 1988 the stand-by agreement had broken down with Egypt receiving only the first of three instalment loans. At issue was the IMF's assertion that Cairo was not moving seriously enough while Cairo believed that the reforms called for were too drastic and would spark unrest. To support his case, Mubarak toured European capitals and appealed to Washington. At the same time, he engaged opposition groups to bolster his cause at home. A sort of two-level game was becoming evident whereby Mubarak played off domestic discontent over needed reforms against international fears that his strategically important country, if pushed, would collapse.[74] By 1989 this strategy was proving not entirely successful, for IMF demands persisted. Mubarak moved cautiously enacting reforms on price controls and the public budget but refraining from a full implementation of IMF guidelines. For instance, despite unveiling a privatization program in April 1990, there has been only one full privatization of a state-owned enterprise.[75] In the midst of the Gulf crisis, another IMF stand- by agreement was reached in May 1991. U.S. pressure to win its ally favorable treatment is debatable for the agreement was in most respects tough, predicating loan restructuring disbursements on implementation of reforms. However, along with the agreement Washington canceled some $7 billion in military debts with Cairo, and both events brought Egypt's debt down from $46.6 billion to $31.2 billion and with full application of the IMF restructuring agreement down to a possible $21.1 billion.[76] It remains to be seen whether Mubarak can keep up his two-level game and forestall serious reform. Of late, the IMF has praised Cairo's efforts and in September 1993 concluded a three- year loan agreement based on a continuation of the privatization program and control of the budget deficit.[77]

Daniel Brumberg and other analysts may be right in their assertion that too rapid and too unyielding a push from the IMF would bring the democratic bargaining process down into chaos,[78] but it is debatable whether Egypt has actually begun a bargaining process. The contrast with Algeria here is key for unlike Chadli, Mubarak does not pursue concurrent political liberalization while delivering the sour medicine of economic reform. At the same time, the chance that the international community would cut Egypt off is improbable because of Egypt's strategic relationship with Washington and the extent to which Egypt and its creditors are integrated. The same could not be said of Algeria in the early stages. In light of such divergent cases, analysts are often apt to discard the positive connection between external economic pressure and internal liberalization. Admittedly, to the extent that internal variables are at odds with external pressures, or even divided internally, the connection between external and internal is hardly axiomatic. Extremist violence and weak political institutions in Egypt play a key role in distorting this influence. Consequently, it is likely that the tug-of-war of option (c) in the Egyptian case will continue. As stated above, this unto itself does not necessarily bode ill for democratization. Stagnation and frustration over dine may force government "soft-liners" to reassess the cost of inaction and press for negotiation on a genuine democratic pact The above comparison also suggests that the fate of the links between external economic pressures and internal liberalization may vary with the type of rent which is constricted. With Algeria it was primarily oil prices for which there was little recourse internationally. Whereas for Egypt, the external rents are more varied and involve worker remittances which can be relocated (to Saudi Arabia recently) and superpower largesse which can be stretched out.

Both cases find room for the positive effect external economic forces can play. For Algeria, external pressures converged over time to contribute to sparking the opening, while for Egypt pressures have admittedly resulted in only limited liberalization but may back Cairo into more political liberalization through prolonged pressure and the costs of stagnation. Unfortunately, both cases also point to a possible contradiction, as of yet unaddressed: "The weakening of the state power [through economic liberalization] also has a negative effect on prospects for political liberalization. The state becomes less capable of creating the conditions in which democracy can flourish. "[79] Contradictions of this state-society variety reinvite consideration of the dominant role of internal factors. Clearly, Algeria's ability to proceed with aggressive liberalization policies in contrast to Egypt's caution can be argued as partly an outcome of contextual differences in the structure of state/society relations. Consequently, it is doubtful that external economic policies, however sensitive, can fully ameliorate tensions arising from economic liberalization and greater demands for political participation. The cases analyzed suggest that unless progress toward meaningful institutionalization of political participation takes place, the opening sparked by external economics may fade. Eventually, internal actors must engage one another at the bargaining table to determine the future course of democratization. External economic pressure can best work to expand elite options, make back-sliding more difficult, and hopefully ease the entire transition period, but much remains in the hands of leadership.

CONCLUSION

Much of this essay's focus argues against the neat distinction between domestic and international politics prevalent in the realist tradition. Analysis of domestic reform in the Arab World can only benefit from this broader perspective. The risk of course is to sacrifice parsimony in an effort to account for all factors at play. Consequently, and hopefully, this article has contributed to the development of a more rigorous framework for examining Arab democratization by advancing and explaining five categories of external variables.

In line with Schmitter's conclusions on this subject,[80] the assumptive beginnings have been to recognize the primacy of internal variables. External factors display their relevance in setting constraints, providing sufficient conditions for change, and acting cumulatively. Demonstration effects most relevant for the Arab states have been intra-regional, where both negative and positive demonstrations can be seen to convey important lessons for future democratizers. Cultural diffusion presents the most nebulous category but one whose effects at the elite level can be observed. Attitudes and values are malleable and to the extent that external conduits yield influences, new norms toward the democratic bargain can result. Foreign governmental policies, principly U.S., toward reform have not played significantly positive roles in the past. As the most easily controllable variable, however, some change is under-way and the impact on Arab elites can work to pressure stalled or limited reform. By contrast, non-governmental pressure has greatly increased over the last decade. By gaining the moral high ground, assisting internal Arab human rights organization, and bringing unwanted attention to bear, the international human rights cause contributes to making the costs of repression unacceptable in comparison to the costs of liberalization.

The most negative variable remains the insecure and conflict prone regional environment. The consequent militarization of state-society relations in many Arab countries bodes ill for meaningful reform to take hold. Massive coercive state apparatuses make the resort to repression an all too easy option for state elites. Similarly, regional hegemons in fear of domestic reverberations demonstrate the continued ability to exact increasing costs on a would be democratizer. Finally, external economic conditions represent the strongest factor examined. While contradictions are evident, the constriction of external rents and the liberal policies of the IMF/World Bank do condition elite propensities toward economic liberalization. The outcome and degree to which political reform follows depends predominately on internal variables mediating the tenuous relationship between economic and political liberalization.

Recent setbacks in the Arab World reinforce the painful lesson that democratization is hardly rapid or unilinear. This does not obviate but rather strengthens the need for a more comprehensive theoretical approach to understanding and accounting for these dynamics.

NOTES

1. Laurence Whitehead, "International Aspects of Democratization," in Transitions from Authoritarian Rule: Comparative Perspectives, edited by Guillermo O'Donnell, Phillipe Schmitter, and Lawrence Whitehead (Baltimore: The Johns Hopkins Press, 1988); and Phillipe C. Schmitter, "The International Context of Contemporary Democratization," Stanford Journal of International Affairs, Vol. 2, Issue 1, (Fall/Winter 1993) pp. 1-34.

2. This distinction is taken from O'Donnell, et al. Transitions from Authoritarian Rule: Tentative Conclusions About Uncertain Democracies, (Baltimore: Johns Hopkins Press, 1988), pp. 9-11.

3. Michael Hudson, "The Democratization Process in the Arab World: An Assessment," Paper presented at the August 1990 American Political Science Association Conference (APSA), pp. 2-5.

4. See particularly: Hirschman, A Bias for Hope: Essays on Development and Latin America, (New Haven: Yale University Press, 1971), Di Palma, To Craft Democracies: An Essay on Democratic Transitions (Berkeley: University of California Press, 1990), and "Legitimation From The Top To Civil Society: Politico-Cultural Change in Eastern Europe," WorM Politics (October 1991), pp. 49-80.

5. Samuel Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: University of Oklahoma Press, 1991), pp. 100-106.

6. Larry Diamond, "Economic Development and Democracy Reconsidered, " The American Behavioral Scientist, (March/June 1992), p. 480.

7. Robert Rothstein, "Weak Democracies and the Prospects for Peace in the Third World," in Resolving Third Worm Conflicts: Challenges for a New Era, ed. by Sheryl Brown and Kimber Schraub, (Washington: U.S. Institute of Peace, 1992), p. 37.

8. Many intellectuals stressed its potential impact both at the grass roots level and on Arab leadership. The Egyptian writer Mohammed Sid- Ahmed confidently proclaimed "There is no escaping democracy now," and a front page editorial in the Kuwaiti paper Al-Siyassah boldly stated: "The Middle East has seen some regimes that have destroyed their people, killed personal initiative in them, and destroyed their economic resources. . . . It appears that the time for punishment has arrived. The picture of Rumania is painful, but it is a warning for those who take heed." ("Emboldened Dissents Are Warning Rulers, " New York Times, 28 December 1989).

9. Hilal Khashan, "The Quagmire of Arab Democracy," Arab Studies Quarterly, vol. 14, no. 1 (Winter 1992) p. 29.

10. Simon Edge, "Yemen Copes in Adversity," MEED, 28 August 1992, p. 3.

11. John Townsend, "The Inevitability of Change: the Undertow of Political Tides in the Gulf," in Global Interests in the Arab Gulf, edited by Charles Davies (Exeter: University of Exeter Press, 1992), pp. 373- 374.

12. Cited in MEED, 10 April 1992, p. 22.

13. FBIS-NESA, 22 January 1992, p. 25.

14. Samuel Huntington, "Democracy's Third Wave," The Journal of Democracy (Spring 1991), p. 28. Huntington notes that much the same observation was made of Catholicism thirty years ago.

15. Leonard Binder, Islamic Liberalism: A Critique of Development Ideologies. (Chicago: University of Chicago Press, 1988). See also, Mohamed El-Sayed Said, "Western Democracy, Or No Democracy At All, " Al-Ahram, 6 May 1992.

16. One of the more interesting exchanges on this front is the National Council on U.S.-Arab Relations' project bringing cadets from the U. S. federal military academies to the Arab World for a better understanding of the region. Opportunities in the near future entail full scale exchange programs with some Arab military academies and the Virginia Military Institute in Lexington, Virginia, Cultural diffusion can then be a fruitful two-way street.

17. Townsend, p. 369.

18. Emile Nakhleh's work on the "Muntada al-Tanmiya" groups in the Gulf examines the strategies of these Western-educated elites: Emile Nakhleh, "Muntada al-Tanmiya: Indigenous Scholarship on Development in the GCC Countries," Paper presented to the November 1990 Middle East Studies Association (MESA) Conference.

19. Charles D. Smith, "The Intellectual, Islam, and Modernization: Haykal and Shari'ati," Comparing Muslim Societies: Knowledge and State in a Worm Civilization, edited by Juan R. I. Cole (Ann Arbor:. University of Michigan Press, 1993).

20. Huntington, The Journal of Democracy, p. 15.

21. Although probably by Said's definition any individual accepting support from the U.S. government would not be an independent or critical thinker. Edward Said, "The Phony Islamic Threat," The New York Times Magazine 21 November 1993, p. 65.

22. There is a growing literature on this aspect of U.S. foreign policy, much of it regarding policy toward Latin America in the 1980s. For more optimistic accounts: Ralph M. Goldman and William A. Douglas editors, Promoting Democracy: Opportunities and Issues (New York: Praeger, 1988); Brad Roberts editor, The New Democracies: Global Change and U.S. Policy (Cambridge: MIT Press, 1990); Larry Diamond editor, The Democratic Revolution: Struggles far Freedom and Pluralism in the Developing Worm (New York: Freedom House, 1992). For more cautious accounts: Abraham Lowenthal editor, Exporting Democracy: The United States and Latin America, Volumes I & II (Baltimore: Johns Hopkins University Press, 1991); and Peter J. Schraeder, Intervention in the 1980s: U.S. Foreign Policy in the Third Worm (Boulder: Lynne Rienner Publishers, 1989).

23. Neil S. MacFarlane, "The Impact of Superpower Collaboration on the Third World," in Third Worm Security in the Post-Cold War Era, edited by J. Weiss and M. Kessler (Boulder: Lynne Rienner, 1991), p. 131.