Elite embeddedness in free zone development

Abstract

Gulf free zone development involved balancing the interests of royals, business elites, and other patronage networks. Leadership positions in major economic organizations, such as free zones, legitimized prevailing political structures in Gulf Arab states—especially in polities with fewer hydrocarbon resources. If ruling family members did not serve in free zones themselves, they often delegated development and management responsibilities to close allies and prominent families. In this manner, free zones provided an opportunity for ruling regimes to reorganize rent-seeking structures in a way that benefitted certain elite coalitions. For their part, Gulf business elites aligned their interests with free zone initiatives to embed themselves and their firms in broad, long-term economic development processes. Differing development aims and realignments of political institutions occasionally created tensions among free zone officials, ruling families, and regional governments. Free zones also extended institutional authority and state power beyond royal individuals and business-oriented elites. Free zone development absorbed key sectors of Gulf economies and established a state-led framework for private sector growth.