Apr 4, 2013


Wasta may also be seen as a form of social insurance. Prior to the second half of the twentieth century (before large oil and gas exports) many Arab societies were characterized by high levels of personal and corporate risks. Arab countries in the Persian Gulf and parts of North Africa, for example, were sparsely populated by nomadic herders and traders who had few easily transferred assets. The desert climate was harsh, raiding occurred between tribal groups, and there were few formal avenues for conflict resolution. In short, life was a risky business and wasta provided mutual insurance that facilitated survival in such harsh environments.
That is from the paper "Regulation, trust, and cronyism in Middle Eastern societies: The simple economics of “wasta”" by Barnett, Yandle, & Naufal (Journal of Socio-Economics, June 2013). A draft (December, 2011) is here

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