Timur Kuran

Turkish-American economic historian (b. 1954), professor of economics and political science at Duke University. Trained at Stanford. One of the most influential modern voices on the comparative institutional economics of the Middle East and on the empirical political economy of religion.

Intellectual program

Kuran’s career has had two principal phases.

Phase 1: preference falsification and the social-economic dynamics of mass deception. Private Truths, Public Lies: The Social Consequences of Preference Falsification (1995) developed the analytical framework for understanding how widespread private dissent can coexist with public conformity, and how revolutions and political shifts can occur suddenly when the stable equilibrium of preference falsification breaks down. The book has been broadly influential in political economy, social psychology, and the analysis of authoritarian regimes; it took on renewed life after the Arab Spring (2011) as a framework for understanding rapid political-shift dynamics.

Phase 2: The Long Divergence and Islamic economic history. The Long Divergence: How Islamic Law Held Back the Middle East (2011) is Kuran’s principal contribution to the Great Divergence debate. The argument is institutional and specific: Islamic law as it developed in the medieval and early-modern periods contained several specific mechanisms that, in combination, prevented the Middle East from developing the durable commercial-capital institutions that Europe achieved. The mechanisms Kuran identifies:

• Inheritance-fragmentation rules. Islamic inheritance law mandates division of estates among many specified heirs in fixed proportions. The result: large commercial estates were systematically broken up at each generation, preventing the multi-generational accumulation of capital that European corporations could achieve through perpetual entity status.
• Partnership-dissolution rules. Islamic partnership forms (mudaraba, musharaka) automatically dissolved on the death of any partner. This prevented partnerships from acquiring perpetual existence and limited the scale at which they could operate.
• Waqf rigidity. The Islamic charitable-foundation form (waqf) was perpetual but legally constrained to the specific purpose its founder designated, which limited its evolution as a flexible institutional vehicle for changing economic conditions.
• The personal-versus-corporate-jurisdiction distinction. Islamic law treats individuals as legal persons but lacks the European corporate-personhood concept, which limited the institutional forms available for organizing complex multi-party economic activity.

The combination, Kuran argues, prevented Middle Eastern commercial economies from developing the corporate forms (joint-stock companies; perpetual chartered corporations; modern banks) that European economies built on Roman-legal and medieval-canon-law foundations. The “Long Divergence” is thus a story of specific institutional handicaps operating across centuries to prevent the accumulation of durable commercial capital.

The contribution to the Great Divergence debate is the rare positive identification of specific institutional mechanisms causing comparative non-divergence. Most explanations of why region X did not industrialize trade in vague cultural or geographic factors; Kuran identifies particular legal rules and traces their economic consequences.

Reception

Kuran’s framework has been broadly influential in the institutional economics of the Middle East and in comparative-civilizational economic history. The empirical case (the specific Islamic-legal rules; their persistence across centuries; their consequences for capital accumulation and institutional evolution) is documented in detail. The framework has been contested empirically — particularly by historians arguing that Islamic commercial practice often worked around the formal-legal constraints (the waqf form was substantially more flexible in practice than in theory; ad hoc partnerships extended past partner death through various legal devices); and by scholars arguing that Middle Eastern commercial economies were substantially more dynamic than the framework allows. The debate continues; Kuran’s framework remains the principal modern institutional-economic account of the Middle Eastern non-divergence.

Associated positions

• European institutional advantage (GD) — provides the principal negative case for the institutional framework: why the Middle East did not develop the institutions Europe did, with specific named mechanisms.

Key works

• Private Truths, Public Lies: The Social Consequences of Preference Falsification (Harvard University Press, 1995).
• Islam and Mammon: The Economic Predicaments of Islamism (Princeton University Press, 2004).
• The Long Divergence: How Islamic Law Held Back the Middle East (Princeton University Press, 2011).
• Numerous papers on Islamic economics, the political economy of religion, and the historical political economy of the Middle East.