Globalization, informal markets and collective action: The development of Islamic and ethnic politics in Egypt, Sudan and Somalia

Globalization, Informal Markets and the Collective Action. The Development of Islamic and Ethnic Politics in Egypt, Sudan and Somalia explains why structurally similar relationships to the international economy produce very different domestic political outcomes. Egypt, Sudan and Somalia are all major labor exporters that witnessed a boom in expatriate remittances in the 1970s and early 1980s. By the mid-1980s and into the 1990s, remittances declined dramatically, generating severe recessions and economic austerity policies. These capital inflows produced similar macro-institutional responses: in the boom, they circumvented official financial institutions and had the unintended consequences of undercutting the state's fiscal and regulatory capacities while simultaneously fueling the expansion of informal markets in foreign currency trade, land, and labor. In the prosperous 1970s, these informal markets came to be "regulated" by indigenous Islamic and ethnic networks which provided cohesion, shared norms, and an economic infrastructure outside the formal economic and political system. In the economic crises of the 1980s and 1990s, however, the material links between formal and informal institutions eroded with the result that identity politics transmuted again, producing three different outcomes in Sudan, Somalia and Egypt: consolidation, disintegration and "transformation," respectively.;Through an in-depth historical analysis of comparable informal institutional arrangements across cases, I demonstrate when, and under what conditions, informal social networks have oriented social and economic relations around religious networks as in Egypt and Sudan, or ethnic affiliations as in Somalia. I locate the rise of an Islamist-authoritarian regime in Sudan, state disintegration in Somalia, and the replacement of conservative free-market oriented Islamist groups with radical Islamist organizations in Egypt in the way that informal financial and labor markets were captured by segments of the state and social groups. I argue that the form that collective action evolved in the three cases was largely dependent on whether Islamist or kinship groups were successful in establishing a monopoly over informal markets and relatively more proficient in utilizing their newly formed political coalition to control competition, albeit through highly coercive means.