Revolutions as Disrupting Despotism but Freeing Infrastructure: Initial Insights from State Entrepreneurial Financing During the Arab Spring

57 Pages Posted: 3 Nov 2016 Last revised: 23 Jan 2023

See all articles by Daniel Erian Armanios

Daniel Erian Armanios

University of Oxford, Saïd Business School; University of Oxford, St Anne's College

Amr Adly

The American University in Cairo - Department of Political Science

Date Written: March 5, 2022

Abstract

How do revolutions affect entrepreneurial financing? Prior studies argue that revolutions generate political uncertainty that decrease financing. Yet amidst the Arab Spring, there is evidence that state financing increased rather than decreased. Using a novel dataset collected during the Arab Spring in Tunisia and Egypt, our study argues that prior work has predominantly focused on how revolutions erode state despotic power (i.e., the degree to which the state can issue rules without consulting its citizenry). However, we argue that revolutions may also free state infrastructural power (i.e., the degree to which citizenry rely on state institutions for goods and services). We specifically find that firms founded during the revolution paid less bribes (“despotic-disrupting”), and informal firms received more state funding (“infrastructure-freeing”). In paying greater attention to state infrastructural power, this study brings more nuanced understanding regarding the role of revolutions on entrepreneurial activity. More generally, in studying how revolutions detach institutional carriers (e.g., state banks) from their dominant logic (e.g., authoritarian state logic), our study brings insights from political sociology to advance our understanding of institutions and entrepreneurship, especially amidst political turmoil.

Keywords: Revolutions, Institutions, Informality, Middle East, State, Entrepreneurship

Suggested Citation

Armanios, Daniel Erian and Adly, Amr, Revolutions as Disrupting Despotism but Freeing Infrastructure: Initial Insights from State Entrepreneurial Financing During the Arab Spring (March 5, 2022). Available at SSRN: https://ssrn.com/abstract=2863611 or http://dx.doi.org/10.2139/ssrn.2863611

Daniel Erian Armanios (Contact Author)

University of Oxford, Saïd Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford, St Anne's College ( email )

Oxford
United Kingdom

Amr Adly

The American University in Cairo - Department of Political Science ( email )

AUC Avenue - P.O. Box 74
Cairo
Egypt

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