Proposal preview

The Middle East and the Great Divergence

The middle east was a cradle of civilisation, and, during the Golden Age of Islam, it was arguably one of the world’s most dynamic centres of learning and civilization. In recent centuries, the West has surged ahead in income, technology, science, and governance. The middle east is not alone in ‘falling behind,’ but it has not played a leading role in discussions of the Great Divergence. This session will explore that topic. The early dynamism of the region poses particular questions: Why did the political evolution of the middle east differ from Europe’s and did those differences affect economic performance? Was Islam ‘growth promoting’ during the eighth and ninth centuries but became ‘grow retarding’ later, and, if so, why? What was the impact of the region’s location and its arid geography on economic development? How did changes in transportation, trade routes, and imperialism affect the region?

Organizer(s)

  • Robert C Allen New York University Abu Dhabi bob.allen@nyu.edu United Arab Emirates
  • Eric Chaney Harvard University echaney@fas.harvard.edu United States of America
  • Sevket Pamuk Bogazici University pamuk@boun.edu.tr Turkey
  • Maya Shatzmiller University of Western Ontario maya@uwo.ca Canada

Session members

  • Robert C. Allen, New YorkUniversity Abu Dhabi
  • Eric Chaney, Harvard University
  • Joerg Baten, Universität Tübingen
  • Maya Schatzmiller, University of Western Ontario
  • Leander Heldring, Harvard University
  • Mohamed Saleh, Toulouse School of Economics
  • Nora Barakat, New York University Abu Dhabi
  • Georg Christ, Manchester
  • Metin Cosgel, University of Connecticut
  • Zubair Abassi, American University Cairo

Discussant(s)

Papers

Panel abstract

The middle east was a cradle of civilisation, and, during the Golden Age of Islam, it was arguably one of the world’s most dynamic centres of learning and civilization. In recent centuries, the West has surged ahead in income, technology, science, and governance. The middle east is not alone in ‘falling behind,’ but it has not played a leading role in discussions of the Great Divergence. This session will explore that topic. The early dynamism of the region poses particular questions: Why did the political evolution of the middle east differ from Europe’s and did those differences affect economic performance? Was Islam ‘growth promoting’ during the eighth and ninth centuries but became ‘grow retarding’ later, and, if so, why? What was the impact of the region’s location and its arid geography on economic development? How did changes in transportation, trade routes, and imperialism affect the region? Could different state policies

1st half

Decline or Deindustrialisation? Climate change, plague and adaption in Mamluk Egypt (14th-15th c.)

Georg Christ

This paper looks at how the Mamluk Empire adjusted to external shocks of the 14th century, namely climate change and plague. It questions the paradigm of the so-called Great Divergence that risks constructing European economic “ascent” as a sui generis, stand-alone phenomenon grounded in specific European causes. Comparing aspects of Egypt’s adaptation to external shocks (esp. with regard to textile industry and industrial technology including the water wheel) to European trajectories, it argues that the Mamluk Empire should be seen as a mature, retiring, deindustrializing society that passed the baton of (mass-)industrial production to its European junior partners. This image does not highlight two discrete and separate paths but rather reveals tightly interlaced tracks of complex paths of development and thus offers a modified explanation for “European ascent” and “Levantine decline”.

This paper looks at how the Mamluk Empire adjusted to external shocks of the 14th century, namely climate change and plague. It questions the paradigm of the so-called Great Divergence that risks constructing European economic “ascent” as a sui generis, stand-alone phenomenon grounded in specific European causes. Comparing aspects of Egypt’s adaptation to external shocks (esp. with regard to textile industry and industrial technology including the water wheel) to European trajectories, it argues that the Mamluk Empire should be seen as a mature, retiring, deindustrializing society that passed the baton of (mass-)industrial production to its European junior partners. This image does not highlight two discrete and separate paths but rather reveals tightly interlaced tracks of complex paths of development and thus offers a modified explanation for “European ascent” and “Levantine decline”.

Falling Behind: The Financial Crisis of the Abbasid Caliphate and the Collapse of Civilization in Southern Mesopotamia

Robert Allen, Leander Heldring

The rise of the West involved a reversal of fortune between Europe and the Middle East. The latter was ascendant during the 7th-9th centuries when the economy, science, and learning flourished in Baghdad during the Golden Age of Islam. This efflorescence ended in the late 9th century as state capacity, rural settlement, agriculture, and urbanization all collapsed. This paper develops a model of hydraulic society to provide an integrated account of this collapse and calibrates it to assess the magnitudes. Cross sections of tax collection data for 28 districts in southern Mesopotamia in 812, 846, and 918 are analysed to establish causal connections among key variables. The proximate cause of the crisis was the collapse in state capacity which meant that the state no longer maintained the irrigation system. A particularly destructive succession struggle determined the timing of the crisis.

The rise of the West involved a reversal of fortune between Europe and the Middle East. The latter was ascendant during the 7th-9th centuries when the economy, science, and learning flourished in Baghdad during the Golden Age of Islam. This efflorescence ended in the late 9th century as state capacity, rural settlement, agriculture, and urbanization all collapsed. This paper develops a model of hydraulic society to provide an integrated account of this collapse and calibrates it to assess the magnitudes. Cross sections of tax collection data for 28 districts in southern Mesopotamia in 812, 846, and 918 are analysed to establish causal connections among key variables. The proximate cause of the crisis was the collapse in state capacity which meant that the state no longer maintained the irrigation system. A particularly destructive succession struggle determined the timing of the crisis.

The Middle East and the ‘Great Divergence’: Origins and Causes of Economic Growth in the Medieval Middle East

Maya Shatzmiller

This paper argues that the medieval Middle East economy benefited from radical and gradual changes in structures and institutions. A first set of factors, 650-850, was exogenous, endogenous and radical. In response to local population decline, the impact of the Justinian plague, the Empire’s administration invested capital in agriculture and mining, increased urbanization, introduced new currency, and enforced Arabization of economic institutions. Transitional long-term factors were instrumental in the second phase, 10th-13th centuries. Individual property rights entrenched in law, demographic transition to low birth rate and human capital formation, enhanced and stabilized economic growth. Evidence of increased commercialization, division of labour and aggregate demand for manufactured goods suggests a case of ‘Smithian growth’. Economic growth in the Middle East, unlike in Europe, could benefit from continuity of urban and rural markets, monetization, and pockets of technological knowledge. The regional state formation evidence though, shows only partial success in maintaining the...

This paper argues that the medieval Middle East economy benefited from radical and gradual changes in structures and institutions. A first set of factors, 650-850, was exogenous, endogenous and radical. In response to local population decline, the impact of the Justinian plague, the Empire’s administration invested capital in agriculture and mining, increased urbanization, introduced new currency, and enforced Arabization of economic institutions. Transitional long-term factors were instrumental in the second phase, 10th-13th centuries. Individual property rights entrenched in law, demographic transition to low birth rate and human capital formation, enhanced and stabilized economic growth. Evidence of increased commercialization, division of labour and aggregate demand for manufactured goods suggests a case of ‘Smithian growth’. Economic growth in the Middle East, unlike in Europe, could benefit from continuity of urban and rural markets, monetization, and pockets of technological knowledge. The regional state formation evidence though, shows only partial success in maintaining the benefits of the new infrastructures.

Elite violence and elite numeracy in the Middle East from 500 CE to 1900 CE

Jörg Baten

In this study we trace two important components of human welfare, namely personal security and educational trends. We measure elite violence by taking the share of killed rulers and we study the elite numeracy by considering the share of rulers for which a birth year is known. We evaluate the validity of these indicators carefully, and assess potential selectivities of our evidence. Around 1000 CE, elite violence was actually lower in the Middle East compared to Europe, so the flourishing period of the Caliphate of Baghdad was also associated with relatively high personal security of the elite. However, after the year 1000 the elite violence trends in Europe and the Middle East diverged strongly, yielding a much higher level in the Middle Eastern case. We assess the effect of elite violence on elite numeracy, and further assess invasions, urban growth and religious thought as potential determinants.

In this study we trace two important components of human welfare, namely personal security and educational trends. We measure elite violence by taking the share of killed rulers and we study the elite numeracy by considering the share of rulers for which a birth year is known. We evaluate the validity of these indicators carefully, and assess potential selectivities of our evidence. Around 1000 CE, elite violence was actually lower in the Middle East compared to Europe, so the flourishing period of the Caliphate of Baghdad was also associated with relatively high personal security of the elite. However, after the year 1000 the elite violence trends in Europe and the Middle East diverged strongly, yielding a much higher level in the Middle Eastern case. We assess the effect of elite violence on elite numeracy, and further assess invasions, urban growth and religious thought as potential determinants.

2nd half

Comparative Development in the Middle East

Metin Cosgel, Sadullah Yıldırım

Whereas certain regions and countries in the Middle East are currently enjoying incomes that are among the highest in the world, others are in extreme poverty. Although much of this difference may be attributable to climate and natural resources, regions also differ in religious composition, political history, and economic institutions. The objective of this paper is to analyze the effects of factors that have caused differences in observed outcomes around the year 2000, prior to the Gulf War and subsequent events. The outcomes of interest are the standard measures of economic performance, such as incomes and population density. We use GIS data to examine the effects of climate, terrain, location, natural resources, and various other geographic factors. Controlling for current national differences by country-level variables, we use a novel georeferenced dataset, called “Historical Polities Data,” to examine the effects of historical differences across subnational regions.

Whereas certain regions and countries in the Middle East are currently enjoying incomes that are among the highest in the world, others are in extreme poverty. Although much of this difference may be attributable to climate and natural resources, regions also differ in religious composition, political history, and economic institutions. The objective of this paper is to analyze the effects of factors that have caused differences in observed outcomes around the year 2000, prior to the Gulf War and subsequent events. The outcomes of interest are the standard measures of economic performance, such as incomes and population density. We use GIS data to examine the effects of climate, terrain, location, natural resources, and various other geographic factors. Controlling for current national differences by country-level variables, we use a novel georeferenced dataset, called “Historical Polities Data,” to examine the effects of historical differences across subnational regions.

God’s Law v Corporations: A Critique of Islamic Law Matters Thesis

Zubair Abbasi

According to economic historians, the business corporation was a key institution in the rise of the West because it economized on transaction costs and spread risks amongst various parties. The Middle East, like China and India, did not indigenously develop business corporations, though it had somewhat similar institutions that fell short of achieving the full features of a business corporation. Timur Kuran along with a few other scholars, has tried to establish a causal connection between the failure of the Middle East to develop business corporations and its economic underdevelopment. These scholars claim that Islamic law and legal institutions hindered the organizational evolution in the Middle East. In turn, the absence of corporations led to the economic and political downfall of the Middle East. This study tests this “Islamic Law Matters” thesis by determining the role of law in the development of business corporations.

According to economic historians, the business corporation was a key institution in the rise of the West because it economized on transaction costs and spread risks amongst various parties. The Middle East, like China and India, did not indigenously develop business corporations, though it had somewhat similar institutions that fell short of achieving the full features of a business corporation. Timur Kuran along with a few other scholars, has tried to establish a causal connection between the failure of the Middle East to develop business corporations and its economic underdevelopment. These scholars claim that Islamic law and legal institutions hindered the organizational evolution in the Middle East. In turn, the absence of corporations led to the economic and political downfall of the Middle East. This study tests this “Islamic Law Matters” thesis by determining the role of law in the development of business corporations.

The private and social profitability of the Anatolia railway: A Social Savings Approach

Robert Allen

The Anatolia railway linked Istanbul to Ankara and Konya before 1913 and greatly increased the profitability of growing and exporting crops in the area serviced. The state guaranteed the revenues of the railway and substantial payments were made to the promoters. Would the railway have been profitable without the guarantees? Were the guarantees excessive? Did the railway raise GDP enough to warrant its construction, i.e. was it socially profitably? The proposed answers are no, no, and yes. Fogel’s social savings methodology is critiqued, and a modified version is used to measure social benefits.

The Anatolia railway linked Istanbul to Ankara and Konya before 1913 and greatly increased the profitability of growing and exporting crops in the area serviced. The state guaranteed the revenues of the railway and substantial payments were made to the promoters. Would the railway have been profitable without the guarantees? Were the guarantees excessive? Did the railway raise GDP enough to warrant its construction, i.e. was it socially profitably? The proposed answers are no, no, and yes. Fogel’s social savings methodology is critiqued, and a modified version is used to measure social benefits.

Egyptian Numeracy during the 19th Century in a Comparative Perspective

Rima Ghanem, Mohamed Saleh, Joerg Baten

We assess numeracy in Egypt in a comparative perspective, studying both heterogeneity within the country, and international differences. Issawi (1963) argued that the level of skills during the early 19th Century was at a low level, due to brain drain within the Ottoman Empire and institutional problems. Around 1907 Egyptian literacy was 5.4%, whereas Turkey had more than 10%. We obtain Egyptian numeracy from two early population censuses in 1848 and 1868, observing a low level of numeracy -- similar to numeracy of Algeria, and lower than in Turkey and various other Middle Eastern countries. However, we draw a more nuanced picture by focusing on regional numeracy trends, religious differences in numeracy and occupation-specific differences. Interestingly, Egyptian farmers had a relatively high level of numeracy, suggesting a nutritional impact on human capital formation. Further we find that the modernisation waves of the early 19th century coincided with positive numeracy trends.

We assess numeracy in Egypt in a comparative perspective, studying both heterogeneity within the country, and international differences. Issawi (1963) argued that the level of skills during the early 19th Century was at a low level, due to brain drain within the Ottoman Empire and institutional problems. Around 1907 Egyptian literacy was 5.4%, whereas Turkey had more than 10%. We obtain Egyptian numeracy from two early population censuses in 1848 and 1868, observing a low level of numeracy -- similar to numeracy of Algeria, and lower than in Turkey and various other Middle Eastern countries. However, we draw a more nuanced picture by focusing on regional numeracy trends, religious differences in numeracy and occupation-specific differences. Interestingly, Egyptian farmers had a relatively high level of numeracy, suggesting a nutritional impact on human capital formation. Further we find that the modernisation waves of the early 19th century coincided with positive numeracy trends.