The Evolution of Corporate Law in the Arab World: The Everlasting Grip of the State

Abstract

This article explores the evolution of corporate laws in major Arab economies with emphasis on the role of state in these laws. The article argues that the dominance of the state in these laws is reflected in the absence of substantial number of default rules. These laws are overwhelmed with mandatory rules that are undermining the freedom of parties in companies to structure and manage their companies effectively. The policy background that led to the current Arab corporate laws is also analysed in this paper as the paternalistic nature of Arab states has shaped the policies that led to the current corporate laws in the Arab world. The interventionist nature of political and economic systems in the Arab world is also reflected in their corporate laws. The article argues for the need to reform current corporate laws in the Arab world and liberate these laws from their paternalistic nature and move forward with more enabling rules and empowering freedom of contract to become the governing philosophy of these laws.