Segmented market economies in the Arab world: the political economy of insider–outsider divisions

This article argues that the low dynamism of low- to mid-income Arab economies is explained with a set of interconnected factors that constitute a particular variety of capitalism which we call ‘segmented market economy’. These include an over-committed and interventionist state; deep insider–outsider divides in private sectors and labor markets that result from and reinforce lopsided state intervention; and an equilibrium of low skills and low...