This paper examines the ways in which rebel groups seek to establish social contracts with civilians under their rule. Many studies assume that the rebel social contract is primarily a material exchange between rebel rulers and citizens. We argue that beyond the material, rebel social contracts also express ideological and normative commitments of rebel groups and civilians. The social contract is not just a vertical arrangement, defining state-society relations. It also entails horizontal dimensions, structuring the way citizens engage with each other, and external dimensions, defining how a rebel government relates to the international community. We compare the Islamic State and Rojava (Western Kurdistan), two cases of rebel governance to emerge from the civil wars in Syria and Iraq. Islamic State and Rojava faced similar challenges of maintaining their political control over ethnically and politically fragmented populations. Yet their visions of the social contract, described in official propaganda and evidenced from the construction of governing institutions, differ radically. We show that the Islamic State and Rojava demonstrated marked differences in the vertical, horizontal, and external dimensions of their rule. We argue that these differences are partially attributable to the ideological commitments of the two organizations and their divergent understandings of what constituted a just and desirable social order.

Debates about possibilities for constructing new social contracts in the post-2011 MENA region tend to reflect flawed, normative assumptions about how social pacts are constructed and maintained. As a result, research on post-uprising MENA political economies has largely overlooked the extent to which new, exclusionary social contracts have already begun to take shape in MENA since 2011. Drawing on examples of these post-uprising social contracts, the paper will argue that what is needed as a corrective is to de-couple our conception of a social pact from the normative and the discursive frameworks in which we’ve embedded them, and broaden our understanding of the term in ways that leave open a much wider and more encompassing sense of how social pacts are formed and consolidated than has been the norm in our field. Conventional narratives about social contracts emphasize their role as mechanisms address deficits in governance, overcome obstacles to development, respond to dysfunctions of neo-liberalism, correct failures of rule of law, and provide frameworks to expand inclusion, pluralism, and participation. These benign social contracts are widely seen to emerge through inclusive processes of consultation and bargaining whether explicit or implicit that rest on egalitarian notions of citizenship and of equal rights of all citizens to the benefits of social policy. What the conventional narrative overlooks, I will argue, using empirical examples from the region, is that the process of forming new social pacts is already quite advanced. However, these are not social pacts that embody inclusive, participatory, or democratic qualities: just the opposite. These new social contracts represent the attempts of regimes to unilaterally restructure – from the top down -- what we often referred to as the populist-redistributive authoritarian bargains of the post-independence period in the form of exclusionary, narrowly nationalist, repressive, and predatory authoritarian bargains based on quite illiberal conceptions of citizenship and of state-society relations. Regimes have adopted strategies that are gradually transforming the institutional, social, legal, and regulatory underpinnings of governance in the Middle East to enable them to contain and manage high levels of social mobilization among marginalized segments of MENA societies, to reduce social and economic demands on the state, to prevent economically disruptive forms of political mobilization, and to equip regimes with the legal and regulatory capacity to prevent or punish any form of political behavior that regimes define as a threat to social and economic order.

Since long, political analysts are using the concept of the social contract to explain why most MENA countries have been rather stable for many decades but have then be hit by the so-called Arab spring. Their argument tends to be that the “old social contracts” of MENA countries do not work anymore because government revenues have diminished and populations have grown so that the average per-capita amounts that governments redistribute to citizens have shrinked substantially while political participation has not improved either. The question to be discussed is if the concept of a social contract adds any value to other concepts in explaining the ‘Arab spring’, the current situation in the MENA and possible future scenarios of development. For this purpose, the term ‘social contract’ must, first, be properly defined to make it applicable to MENA countries. I particular, it should be non-normative. Second, it should be clarified what the format, the contracting parties and the contents of social contracts can be. Third, it should be exemplified that all countries have a social contract at almost every point in time but that these social contracts differ substantially. Finally, the question will be how social contracts in MENA countries have changed over time – especially before and during the Arab spring - and how they might develop in the future. The thesis of the paper is that the concept of the social contract is mainly good to take a specific perspective on these developments: in order to understand, for example, that the state and societal groups can renegotiate the social contracts in MENA countries in different ways. Of course, they have very different negotiating power. But if governments continue to reject better conditions for society (better governance, social justice and human development), they incur a high risk that a ‘new Arab spring’ breaks out leading potentially to the implosion of additional MENA countries. The challenge is thus to identify a solution that is pareto-superior to the status quo: improving the conditions for societies while at least not deteriorating the situation of the regimes (who would otherwise refuse the new social contract). At the same time, the concept of the social contract help to identify policy fields that will be crucial for the future stability of MENA countries and analyse the potential of different reform options in these fields – including e.g. industrial policies, subsidy and cash transfer policies, administration reforms and water allocation.

Energy subsidies have been at the core of the old social contract in the Middle East and North Africa (MENA), which pivots on the strategic redistribution of rents. But, growing evidence shows that energy subsidies have been disproportionally benefiting middle- and upper-income groups, have legitimized political regimes of a rentier and clientelistic nature, and have locked-in energy systems in unsustainable modes of generating electricity. As such, the subsidy regime created strong vested interests in the status-quo, limiting progress with reducing and better targeting subsidies. While reform requires complex policy interventions, its success is likely to contribute to framing a new social contract, based on: targeted benefits to those in need, improved communication between the state and societal groups (to identify needs, justify reform action, and identify measures to mitigate negative effects), and better coordination of policy interventions across sectors (social policy, energy and industrial policy). Together, these aspects of a new social contract are likely to contribute to improved stability as well as social, economic, and environmental sustainability. For MENA countries dependent on energy imports, the reform of fossil-fuel subsidies poses particular challenges. Competing budgetary demands due to development imperatives call for urgency of reform, but vested interests prevent change. Understanding the conditions under which subsidies were instituted and maintained over time, as well as the dynamics around earlier attempts to reform is important for assessing the effectiveness of current efforts for reform. In this context Morocco’s case is illustrative, as it currently imports more than 90% of its energy needs and has spent 5% of its GDP on subsidies. Due to budgetary concerns, energy security, and development pressures, Morocco recently showed commitment to reforming subsidies. Its decision to reform subsidies was supported by low oil prices and investments in renewables to diversity its energy mix. The reform success depends on government’s implementation capacity, mitigating negative effects on vulnerable population groups, building support coalitions to overcome vested interests, learning from previous reform attempts, and coordinating across various policy areas. Using a political economy lens, this paper focuses on discovering the sources of resistance to reform, on identifying windows of opportunity for reducing subsidies, and assessing conditions for achieving reform durability. We argue that a successful reform of the energy subsidies is likely to create opportunities for a new social contract between the state and society based on a narrative that supports inclusive development and addresses energy security concerns.