Since early December 2018, protesters have gathered every Thursday in Amman’s Fourth Circle in the Zahran District in opposition to a revised version of the unpopular tax bill introduced last June. That original legislation had sparked a broad-based tax revolt across Jordan, which quickly turned into an informal referendum on the failures of neoliberal development—including diminishing social services, lower wages and rising unemployment. While the December 2018 and January 2019 protests echoed the economic refrains of the original June tax revolt, the tax protests took on a political character after the monarch approved the revised law.

Why do regimes allow some low-income business owners to avoid taxes by operating informally? Electoral incentives are central to prevailing explanations of governments’ forbearance of informal enterprise. Yet many unelected regimes host large informal economies. This article examines forbearance in non-democracies. We argue that unelected regimes forbear their supporters’ informal businesses. We test this argument in Jordan. Using survey data of over 3,800 micro and small enterprises (MSEs), we find that informal businesses are more likely to operate in districts with higher rates of public sector employment, the crown jewel of the Jordanian regime’s patronage. Interviews with over sixty of the surveyed firm owners across four strategically paired districts illustrate that business owners covet forbearance, and that kinship ties to public sector employees limit forbearance to regime supporters. Communities that attract higher rates of public sector employment forfeit higher levels of fiscal revenue by permitting informality. This complementarity between public sector employment and forbearance amplifies inequalities between regime supporters and opponents in non-democracies.

Before the Syrian civil war, Egyptians were the single largest migrant labor community in Jordan. Labor market pressures and changes to the Jordanian work permit system have resulted in the increasing vulnerability of Egyptian labor, who have been the primary labor force on Jordanian farms and construction sites since the late 1970s. Using new data from the 2015 Jordanian census, the 2010 and 2016 Jordan Labor Market Panel Survey, and field interviews conducted in Jordan from 2014 to 2018, I show that higher concentrations of Syrians at the subdistrict level are associated with higher rates of informal labor market participation for Egyptians. Furthermore, higher proportions of Syrians do not correlate with negative impacts on the formality or household wealth of Jordanian citizens, suggesting that Syrian labor does not directly compete with the Jordanian labor force. Given the importance of supporting host communities during refugee crises, this analysis sheds light on how mass forced migration affects other vulnerable segments of the migrant labor force in the Global South.

Harold Lasswell’s (1936) contention that politics is fundamentally a study of who gets what, when, and how neatly sums up current thinking on social policy in the MENA region. Scholars describe MENA states’ provision of welfare services like health and education primarily in terms of Lasswell’s “who gets what.” Scholars like Baylouny (2010) and Cammett (2014) have advanced our understanding of how welfare provision is targeted in weak or retreating states, but we know less about when and how states develop the capacity to deliver public services. A growing political economy literature suggests that historical legacies of state capacity are a productive point of departure for understanding downstream social policy outcomes.

This spring, major protests swept through Jordan over economic grievances and subsidy reforms. In July, protestors took to the streets in the south of Iraq, demanding that the government address persistent unemployment, underdevelopment, and corruption. Meanwhile, earlier in 2018, Tunisians launched a wave of protests to oppose tax hikes on basic goods and increased cost of living. Such highly politicized responses to social policy concerns are the norm rather than the exception across the Middle East and North Africa.

What does a new social contract mean in the Jordanian context, and how would this help Jordan to overcome its persistent political and economic problems?