Saudi Externalities

Last week, we discussed (see here) the origins of the Saudi extractive institutions which lie in the personal rule of the Saudi royal family and the Wahhabist ideology following on the footsteps of Ibn Abdul Wahhab. The result is a uniquely repressive society where regular citizens have few rights, speech and thoughts is restricted both by the government and the Wahhabist religious establishment, and repression against women, who cannot vote, drive or work in a gamut of occupations, is probably unmatched by any other late 20th century society.

If this was all confined to Saudi Arabia, it would be bad enough, but no different than other flavors of extractive institutions from Uzbekistan (which we discussed here, here and here) to Nepal (here, here and here) or North Korea or Zimbabwe. But it’s worse because Saudi Arabian brand of repression creates significant negative institutional externalities.

Long before Osama bin Laden, a veritable scion of Saudi extremism whose story is masterfully recounted in Steve Coll’s The Bin Ladens: An Arabian Family in the American Century, started attacking US targets, the noxious mixture of Wahhabist state ideology and Saudi petrodollars were creating extremism in the Middle East and beyond. Gilles Kepel in Jihad: The Trail of Political Islam illustrates how Saudi money for schools, mosques and “Islamic development” was pivotal in the rise of Islamic extremism replacing Arab nationalism in Egypt, Algeria and Palestine, and in fomenting and spreading the Jihadist ideology in Deobandi schools in Pakistan and Afghanistan.

In our globalized, integrated world nothing is just national, alas neither is extremism and extraction.

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