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The London School of Economics and Political ScienceGramsci in Cairo:Neoliberal Authoritarianism, Passive Revolution andFailed Hegemony in Egypt under Mubarak, 1991-2010Roberto RoccuA thesis submitted to the Department of InternationalRelations of the London School of Economics for the degreeof Doctor of Philosophy, London, January 20121 of 3

DeclarationI certify that the thesis I have presented for examination for the MPhil/PhD degree ofthe London School of Economics and Political Science is solely my own work otherthan where I have clearly indicated that it is the work of others (in which case theextent of any work carried out jointly by me and any other person is clearly identifiedin it).The copyright of this thesis rests with the author. Quotation from it is permitted,provided that full acknowledgement is made. This thesis may not be reproducedwithout my prior written consent.I warrant that this authorisation does not, to the best of my belief, infringe the rightsof any third party.I declare that my thesis consists of 89,036 words.2 of 3

AbstractMost existing interpretations of the thought of Antonio Gramsci in International Relationsand International Political Economy are strongly influenced by the seminal account providedby Cox in the early 1980s. Recovering the hitherto neglected concept of philosophy of praxis,this thesis departs from the ‘Coxian orthodoxy’ and develops an alternative understandingof Gramsci that sees hegemony as a combination of coercion and consent emerging from thearticulation on three overlapping dimensions, respectively involving the interaction of theeconomic and the political, the international and the national, the material and the ideational.The potential of this approach is illustrated by examining the unfolding of neoliberaleconomic reforms in Egypt in the past two decades. It is argued that, firstly, the interaction ofeconomic and political factors produced the emergence of a neoliberal authoritarian regimewith a predatory capitalist oligarchy playing an ever greater role. Secondly, articulationacross different spatial scales brought about a passive revolution managed by the state withthe aim of adapting to the globalising imperatives of capital accumulation withoutbroadening political participation. Lastly, the performative power of neoliberalism as anideology fundamentally reshaped economic policymaking in favour of the rising capitalistelite.This focus on the shift in class relations produced by – and itself reinforcing – neoliberalreforms allows us to understand how the already waning hegemony of the Egyptian regimeunder Mubarak gradually unravelled. The rise of the capitalist oligarchy upset relations offorce both within the ruling bloc and in society at large, effectively breaking the postNasserite social pact. Passive revolution witnessed the abdication to the pursuit of hegemonyon the national scale, with the attempt of replacing it with reliance on the neoliberalhegemony prevalent on the international scale. The success of neoliberalism as an ideologydid not obscure the increasingly inability of the regime to provide material benefits, howevermarginal, to subaltern classes. Thus, the affirmation of neoliberalism in Egypt correspondedto the failure of hegemony on the national scale.3 of 3

Table of ContentsAcknowledgementsList of figures45IntroductionRationale for a Gramscian Approach to Economic Reforms in Egypt6- Why Gramsci? Which Gramsci? Rationale and theoretical contributions- Why Egypt? Rationale for case selection- Caveats, or: what you should not expect from this thesis- Argument in a nutshell and thesis outline7111416Chapter 1‘Recovering the Philosophy of Praxis’:Gramsci, Hegemony and the Global Political Economy201.1. Introduction1.2. Philosophy of praxis as historical dialectical materialism1.2.1. Gramsci’s theory of history1.2.2. Two-dimensional dialectic1.2.3. Materialism beyond materialism1.3. Towards a non-Coxian interpretation of Gramsci1.3.1. From Robert Cox to the neo-Gramscian school1.3.2 Threefold critique of the ‘Coxian Gramsci’1.3.3. Gramsci in this study1.4. Hegemony1.4.1. Hegemony in the ‘Prison Notebooks’1.4.2. Hegemony in mainstream IR: Gramsci unheard?1.4.3. Hegemony in critical IR and IPE: Gramsci misheard?1.4.4. Hegemony in this study1.5. Conclusion202223252729303339424349525561Chapter 2The Gramscian Articulation Approach in Practice:Debates, Theories, Methods632.1. Introduction2.2. Forms of change: from accumulation regime to political regime?2.2.1. Modernisation theory: development, democratisation and the middle class2.2.2. Predatory elites: development, rent and the power of the powerful2.2.3. Gramscian approach: regimes, social classes and articulation2.3. Sources of change: the issue of spatial scale2.3.1. ‘Swallowed’ by capital? Debates on economic change, scale and the state2.4. Reasons for change: instrumentality and belief63646568707676831

2.4.1. ‘Capital ideas’ or ideas for capital? Debates on economic change and ideas2.5. From theory to practice: evidence and methods2.6. Conclusion849097Chapter 3Moving Away from the Etatist Paradigm?The Neoliberalisation of the Egyptian Economy1003.1. Introduction3.2. Egyptian vagaries in brief, 1952-19903.2.1. The doomed route to Arab socialism, 1952-19733.2.2. Opening the door, but not quite, 1973-19903.2.3. Change and continuity in the Egyptian political economy3.3. A success story? Stabilisation and adjustment3.3.1. ‘The reckoning’ and macroeconomic stabilisation3.3.2. ‘The IMF’s model pupil’: privatisation and liberalisation3.4. From étatism towards neoliberalism? Weighing the evidence3.4.1. Structural reforms in agriculture: giving land back to landlords3.4.2. Structural reforms in industry: ‘no factories, no problems’3.4.3 Financial sector reforms: follow the money!3.5. hapter 4The Emergence of Neoliberal Authoritarianism:The Articulation of the Economic and the Political1304.1. Introduction4.2. Regimes, policies and politics: empirical study4.2.1. Agriculture: state withdraws, business steps in, regime controls4.2.2. Industry: the political rise of the business elite and institutional capture4.2.3. Finance: technocrats, the infitah class and wealth concentration4.3. Social structures, rulers and regime change: comparing theories4.3.1. The case of modernisation theory: middle class or capitalist oligarchy?4.3.2. The case of predatory elites: all in the hands of the rulers4.3.3. The Gramscian case: structural change meets political logic4.4. Articulation I: the emergence of neoliberal authoritarianism4.5. Conclusion130132133137141147148149151154156Chapter 5History of a Passive Revolution:The Articulation of International and National Scale1585.1. Introduction5.2. Scales, institutions and economic change: empirical study5.2.1. Agriculture: from ‘one-size-fits-all’ to the Egyptian way to neoliberalism5.2.2. Industry: privatisation as a taboo, privatisation as a must-do5.2.3. Finance: the politics of policy turnarounds1581601611651692

5.3. Global capital, national state and class structure: comparing theories5.3.1. The transnational state case: state as a transmission belt of global capital?5.3.2. The area studies case: global capital fooled?5.3.3. The Gramscian case: international constraints meet national agency5.4. Articulation II: U&CD, spatial scales and passive revolution5.5. Conclusion173173177178183186Chapter 6Ideology Resurgent?The Articulation of Material Factors and Ideas1886.1. Introduction6.2. Instrumentality, organic intellectuals and ideology: empirical study6.2.1. Organic intellectuals: manufacturing consent for neoliberalism?6.2.2. Paradigm change: instrumentality, belief and cognitive biases6.3. Power, ideas and class relations: comparing theories6.3.1. The materialist case: the functionality of ideas6.3.2. The ideational case: ideas all the way down6.3.3. The Gramscian case: materiality meets ideas6.4. Articulation III: money, ideology and hegemony as exchange6.5. Articulating Hegemonies?Gramsci, Neoliberalism in Crisis and Tahrir Square215- Neoliberal authoritarianism as passive revolution: key findings- Back to Gramsci: outline of the articulation approach- Hegemony unravelling: a longer term perspective, 1952-2010- Hegemony at home and abroad: the interscalar articulation of crises- After Mubarak: from passive to active revolution, and back?216218225228231Appendix I – ERF and ECES working papersAppendix II – List of intervieweesBibliography2352592613

AcknowledgementsThe key idea behind this thesis – developing an alternative interpretation ofGramsci and illustrating it with reference to the Egyptian case – was fleshed out inthe midst of the second year of the doctoral programme, after the discussion of adisastrous chapter with my supervisors. Joe Hoover and Laust Schouenborg lenttheir ears to my rants and supported me in the decision of abandoning the EUforeign policy path. A few weeks later, comments by Margot Light and MeeraSabaratnam encouraged me to pursue the research project that, albeit with the usualtwists and turns of a doctoral dissertation, results in this thesis. While I am gratefulfor their support and friendship, I obviously absolve them from any responsibilityfor the shortcomings of this work.The change of topic also required a change in supervision. I thank Professor KarenSmith for her constructive criticisms on the previous project and for herrecommendation to follow my theoretical inclinations. Dr Federica Bicchi’s decisionto stay the course and act as supervisor also on the new project provided alighthouse in the storm I was going through, and I am very thankful for this. I amalso grateful to Professor Kimberly Hutchings for agreeing to serve as cosupervisor. Her acute and lucid criticisms were always accompanied by an unfailingmoral support, particularly in the days of discouragement during the write-up. DrGeorge Lawson also agreed to comment on the theoretical part. Their commentswere of key importance in pushing me to clarify my thoughts and hopefully also inimproving the quality of this work.During my time in Cairo, Farid Abdeen was an excellent landlord and helped mewell beyond the call of duty with practicalities related to getting access to theAmerican University in Cairo. I would like to thank Gouda Abdel-Khalek, HolgerAlbrecht, Galal Amin, Marco Masulli and Samer Soliman for discussing with me themain argument of the thesis and for their precious advice on the empirical work. Iam also grateful to all the researchers, businessmen and policymakers who agreedto be interviewed and participated in the survey carried out at the Central Bank ofEgypt.Undertaking doctoral research would not have been possible without thescholarships from the Sardinian Regional Government (Regione Autonoma Sardegna)and the Department of International Relations at LSE. My family provided me withvital funds during the first months in London, and most crucially with unreservedsupport, affection and much needed humour throughout the years.The change of topic, and ultimately this thesis, would not have been possiblewithout Mihaela. Her unflagging belief in what I was doing, and most importantlyin me, provided the fuel to undertake this long journey. And despite our pathsparted before the last few miles, this work is dedicated to her.4

List of Tables and FiguresTablesTable 3.1 – Washington Consensus113Table 3.2 – Ownership structure in the banking sector (1990-2010)125Table 4.1 – Main business groups at EGX146Table 5.1 – Trade liberalisation measures (1991-98)166Table 6.1 – Capital mobility and think tank production199Table 6.2 – CBE’s task force perceptions on Basel II risks for developingcountries201FiguresFigure 1.1 – Gramsci’s hegemony (Take 1)Figure 1.2 – Gramsci’s hegemony (Take 2)Figure 1.3 – Gramsci’s hegemony (Take 3)Figure 1.4 – Gramsci’s differentiated understanding of hegemonyFigure 3.1 – Key indicators for macroeconomic stabilisationFigure 3.2 – Market capitalisation of listed companies as share of GDP(1990-2009)Figure 3.3 – Total value traded as share of GDP (1995-2009)Figure 5.1 – FDI net inflowsFigure 6.1 – Neoclassical economics in ERF and ECES working papers548484849114126126175192

IntroductionRATIONALE FOR A GRAMSCIAN APPROACHTO THE STUDY OF ECONOMIC REFORMS IN EGYPT‘This time is different’. On a torrid Sunday in early July 2010, sitting on a largearmchair in his opulent and indulgently air-conditioned office in Heliopolis, thenminister of investment Mahmoud Mohieldin gave what felt like a routine answer towhat probably was a routine question. Echoing the concerns of the respectedeconomist Hanaa Kheir-el-Din, I asked the minister whether also on this occasionthe push for reform was receding with the waning of external pressures, as somemeasures taken in 2009 and 2010 already seemed to suggest. ‘This time is different’was his answer, before he eloquently went on to claim that the halt to reforms wasdue to adverse global economic conditions, and that the impetus for reforms wouldhave gathered new momentum as soon as the global economy would allow for it.After all, he suggested while holding a cigar in his right hand, the cabinet was stillthe same, and so were the beliefs of its most prominent members.A couple of months after our interview, the president of the World BankRobert Zoellick appointed Mohieldin as managing director of the World Bankgroup, praising him as ‘a tireless reformer’ and ‘[a]n outstanding young leader’(World Bank 2010). Mohieldin took his post in early October, thus resigning fromthe Ministry of Investment whose policy remit had been tailored around hiscompetences and projects. About six months and a half later, while Mohieldin wasin his new office in Washington, DC, hundreds of thousands of peopledemonstrated around the streets of Cairo, Alexandria and the other major cities inEgypt asking for an end to thirty years of

A thesis submitted to the Department of International Relations of the London School of Economics for the degree of Doctor of Philosophy, London, January 2012 . 2 of 3 Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is .