After the revolution comes the test of governing. From Paris in 1789 to Cairo and Tunis in 2011, the task is the same: translating the euphoria of the uprising into lasting material progress. It is likely to prove especially challenging for two Arab nations that have long lagged behind their European neighbors on the other side of the Mediterranean. If the new governments of Egypt and Tunisia are to have any chance of satisfying the demands of the revolutionaries, they need to start out with an accurate assessment of what has been holding back their economies. But what if a major culprit is Islam itself?

An influential line of analysis points to that conclusion. “No one can understand the economic performance of the Muslim nations without attending to the experience of Islam as faith and culture,” David Landes, the Harvard economic historian, wrote in his book “The Wealth and Poverty of Nations” (1998). With the rise of the West, Landes and other scholars say, the Islamic world developed an inferiority complex, rejecting European inventions such as the printing press and retreating into scholasticism. “Thus, Islam has long exercised a retardative influence on Arab intellectual and scientific activity,” Landes concluded. “New knowledge and ideas have fallen under suspicion as bid’a or heresy.” After 9/11, Bernard Lewis, the Princeton historian, developed this narrative further, arguing that the pervasive influence of Islam prevented many Arab countries from properly addressing the issue of why they were falling behind. “Traditional answers to such a question would have been in religious terms,” Lewis wrote in “What Went Wrong? The Clash Between Islam and Modernity in the Middle East” (2002). “All problems are so to speak ultimately religious, and all final answers are therefore religious. . . . If things are going badly, we are being punished by God for having abandoned the true path.”

It’s beyond dispute that the Arab world trails the West economically and technologically. In a series of reports for the United Nations, the first of which was published in 2002, a panel of Arab intellectuals concluded that the Middle East’s development was severely impeded by both a “freedom deficit” and a “knowledge deficit.” In many Arab countries, the report pointed out, adult literacy rates barely topped fifty per cent, and virtually no scientific patents were being registered. Setting aside the oil industry, the Middle East scores badly on basic economic measures, such as productivity, foreign investment, and trade. Tiny Costa Rica, with fewer than five million people, exports more manufactured goods than Egypt, which has a population of about eighty million. Politically, it seems, the people of Egypt and Tunisia have put their countries on a new trajectory. But to what extent Islam, with the restrictions it places on banking and other types of commerce, is compatible with a successful twenty-first-century economy remains a matter of contention.

The notion that religion plays a central role in economic development dates back to Max Weber’s 1905 treatise “The Protestant Ethic and the Spirit of Capitalism.” Reflecting on the rise of England, Holland, and other areas where religious Nonconformism was strong, Weber drew attention to the cultural consequences of the Reformation. In embracing an ascetic moral code based on abstention and individual self-improvement, Protestants, notably Calvinists, were particularly suited to the task of mobilizing capital in the rational pursuit of profit, he argued. Weber didn’t examine Muslim attitudes toward work and enterprise, but a few years ago the economists Luigi Guiso, Paola Sapienza, and Luigi Zingales did, drawing on data from the World Values Survey, a multinational set of surveys that covers sixty-six countries. In a study that appeared in the Journal of Monetary Economics, they noted that, “on average, Christian religions are more positively associated with attitudes that are conducive to economic growth, while Islam is negatively associated.” In comparison with Protestants, Catholics, Hindus, and Jews, Muslims were generally less disposed to agree with pro-market statements, such as “Competition is good,” “Private ownership of businesses and industry should be increased,” and income inequality is necessary to provide “incentives for individual effort.”

Modern economists tend to put greater emphasis on the way beliefs are codified and institutionalized than on the beliefs themselves. Many Islamic societies were slow to develop banks, commercial courts, joint-stock companies, and other business organizations. In a new book, “The Long Divergence: How Islamic Law Held Back the Middle East,” the economist Timur Kuran, who grew up in Turkey and teaches at Duke University, blames social customs and religious rules dating back to the earliest days of Islam. He doesn’t emphasize the Koran’s prohibition of lending at interest, which, he points out, Muslim lenders and borrowers have long found ways to circumvent, and which, in any case, hasn’t prevented the recent emergence of a big Islamic finance industry. (There are now hundreds of banks and investment funds that claim to be “Sharia compliant.”) Instead, he focusses on laws covering business partnerships and inheritance practices. These, he argues, discouraged the emergence of modern industrial corporations, forestalling the Islamic equivalent of General Electric, General Motors, and I.B.M.

In medieval times, trading partnerships were the leading form of business in the Middle East. These legal constructs enabled traders to raise money for long-distance expeditions, and were in some ways centuries ahead of their time. (For instance, they featured limited liability for passive investors.) But a business vehicle designed to finance caravans traversing the Arabian Peninsula proved ill suited to building long-lasting assets, such as factories and railways. In an Islamic partnership, any individual partner could end the relationship at will, and even the most successful ventures were terminated on the death of a partner. As a result of these rules, most businesses tended to be small and short-lived. By the nineteenth century, the most durable trading entities in many Islamic countries were extended networks operated by local non-Muslims, such as Armenians and Jews, but these organizations, too, were limited in their ability to raise money from outsiders. “Before the twentieth century,” Kuran notes, “the region did not produce a single case of mass financial mobilization through non-governmental channels for a major business venture, except insofar as foreigners were involved.”

Inheritance customs also hindered business consolidation. The Koran dictated that when a Muslim merchant died at least two-thirds of his estate had to be split among surviving family members. Combined with the widespread incidence of polygamy among the wealthiest Muslims, which multiplied the number of heirs, this egalitarian stipulation helped prevent Islamic societies from evolving into European-style feudal systems. But it further stymied the creation of long-lasting, capital-intensive companies. “The resulting organizational stagnation then prevented the Middle East’s mercantile community from remaining competitive with its western counterpart,” Kuran writes.

Once the Islamic economies had stumbled, Kuran finds, their weaknesses proved self-reinforcing. In the virtual absence of large-scale corporations, the Middle East was much slower to develop commercial bookkeeping, stock markets, and other standard features of Western capitalism—historical omissions that, he argues, bedevil it still. He believes that an enfeebled private sector laid the ground for the distended state bureaucracies of today, along with policies and norms that discourage innovation. As a result, Kuran says, most of the countries of the region are not competitive in the global marketplace, and their civil societies are too weak and disorganized to sustain democratic governance. He warns, “If the region’s autocratic regimes were magically to fall, the development of strong private sectors and civil societies could take decades.”

Among the latter-day Weberians, Kuran offers an unusually detailed and well-documented indictment. In portraying Islamic commerce in the eleventh and twelfth centuries, for example, he cites the “Geniza documents,” a trove of ancient letters, price lists, and commercial contracts discovered in a Cairo storeroom. But, before consigning a fifth of humanity to the dustbin of economic history, one might consider, more broadly, whether it makes sense to place such an emphasis on religion in explaining the underdevelopment of so many Muslim countries.

To start with, it’s worth noting—and Kuran and Lewis, to their credit, do note it—that Islam, at least in its original formulation, was far from hostile to business. While the Koran prohibits usury (riba), it also contains verses encouraging commerce. (“O ye who believe! Eat not up your property among yourselves in vanities: but let there be among you traffic and trade by mutual good-will.”) The Prophet Muhammad is believed to have been a merchant early in his adult life, and on one occasion he reportedly said, “The trustworthy merchant will sit in the shade of Allah’s throne.” The caliphate that Muhammad and his successors created was a great trading empire, with outposts from the Atlantic coast of Spain to Central Asia. In addition to selling spices and precious metals, Islamic entrepreneurs developed successful manufacturing industries, such as paper, carpets, and cotton textiles—and all this when much of Europe was in the Dark Ages.

As the centuries passed, many Muslim regions fell badly behind the West, yet the most immediate explanation involves not Islam but predatory governance and colonialism. In 1382, much of the Middle East came under the jarring rule of the Circassian Mamluks, who hailed from the Caucasus and treated their subjects as cash cows. “They not only continued the traditional exploitation of the peasantry, but also introduced extortionate taxes and forced sales on industrial production and commerce,” Ronald Findlay and Kevin H. O’Rourke write in “Power and Plenty” (2007), a magisterial history of world trade. “Agricultural production declined as a result of the falling labor force, failure to maintain the infrastructure for irrigation and Bedouin depredations, and a number of industries, from textiles to sugar refining and paper, shrank as the result of excessive taxation and competition from European imports.”

In the sixteenth century, when the Ottoman Turks overran the Middle East, the situation worsened. By this stage, European galleons were sailing around the Cape of Good Hope, reducing dependence on the overland trading routes to Asia—the traditional basis of the Arab economy. Although the Ottoman Empire survived for another four hundred years, it was notoriously sclerotic, with little encouragement of artistic or scientific innovation. Some provincial areas, like Egypt, were largely left to rot, as long as they paid their taxes. “No public works were carried out, the irrigation canals silted up and famine and disease were rampant,” the late historian Peter Mansfield wrote of Egypt in the era. “It is no surprise that Egyptians look on this period as a dark age.”

When Middle Eastern leaders tried to take the initiative, they were sometimes thwarted. In the early nineteenth century, Mehmet Ali, an Albanian and a former soldier in the Ottoman Army, became the ruler of Egypt, and set out to modernize its economy. He imported French engineers to design new dams and irrigation systems, founded technical schools, and built textile mills to convert cotton into yarn, imposing stiff tariffs on competing goods from abroad. Ali also had visions of converting Egypt into a great military power, and invaded Syria and Sudan. Eventually, however, his armies were rolled back, and so were his industrial ambitions. In 1838, Britain, the leading producer of cotton goods, pressured the emperor in Constantinople to cut tariffs on British imports, to the point that Egyptian goods, which were generally of low quality, couldn’t compete. In 1849, Ali died, and hopes of an Islamic economic renaissance perished with him.

More recent history also provides examples of Muslim countries seeking to engage in the global economy—and of some of them succeeding. In 2008, Indonesia’s inflation-adjusted G.D.P. per person was five and a half times what it was in 1980; in Malaysia during the same period, it rose almost sixfold. Just a generation ago, both of these nations were overwhelmingly rural and poverty-stricken. Today, they are industrialized middle-income countries, with universal-education systems and long life expectancies.

To be sure, neither Indonesia nor Malaysia took the Western democratic route to modernity. Under the leadership of Suharto and Mahathir bin Mohamad, they followed the “Asian tiger” model of government-led economic development, in what were effectively one-party states. Still, it simply isn’t true that, as is sometimes said, no Islamic country has transformed itself into an economically vibrant democracy: Turkey has done just that. Ever since the nineteen-twenties, when Mustafa Kemal Atatürk, the former Army officer who helped found the Republic of Turkey, abolished the caliphate and imposed a strict church-state divide, the government in Ankara has made economic expansion its primary goal. After 1980, under the leadership of Turgut Özal, Turkey removed barriers to foreign trade and investment, and, with some hiccups along the way, made the generals subordinate to the politicians.

Since 2003, the government, under Recep Tayyip Erdogýan, has continued to overhaul the economy in preparation for Turkey’s bid to join the European Union. Erdogýan’s Justice and Development Party emerged from the explicitly Islamist Virtue Party, and it still has strong support among the rural faithful. But the Party’s Islamic heritage hasn’t prevented it from embracing a policy of economic modernization, building on the achievements of Atatürk and Özal. Today, Turkey is the world’s fifteenth-largest economy and a member of the G-20. It is the world’s second-largest exporter of cement, and the third-largest exporter of glassware. It also exports lots of higher-value items, such as televisions, buses, and ships. And, according to the U.S. State Department, ninety-nine per cent of its population is Muslim.

Apart from the oil states of the Gulf, which have long-term challenges of their own, economic miracles are harder to find in the Maghreb or the Arabian Peninsula. Indeed, a number of Arab countries, such as Yemen and Sudan, have remained overwhelmingly poor. But others have managed to expand their economies at respectable rates, and Egypt and Tunisia are among them. Between 1980 and 2000, per-capita income in Tunisia grew at an annual rate of 2.2 per cent, which equalled the average growth rate of all countries, developing and developed. Since 2000, growth has continued, and Tunisia is now one of the richer countries in Africa. A tourist destination for Europeans and others, it also boasts a strong manufacturing sector, which exports textiles, footwear, processed food, and electrical goods. In 2008, Tunisia entered a free-trade agreement with the European Union, which eliminated customs duties on many items.

Egypt, too, is much better off than it used to be. Since 1990, its G.D.P. per capita has grown at an annual rate of about three per cent; its standard of living has almost doubled. Infant mortality has fallen sharply, and life expectancies have shot up. Egypt has had less success in expanding manufacturing than Tunisia has had, but lately its agricultural and energy sectors have benefitted from rising food and oil prices. (In addition to having 4.4 billion barrels of crude reserves, Egypt has a large oil-refining industry.) When prices are adjusted to reflect purchasing power, Egypt has a per-capita G.D.P. of about sixty-four hundred dollars, according to the International Monetary Fund. This is roughly the same level as China and Ukraine have.

Although corruption and cronyism persist in many areas of business, Tunisia and Egypt have introduced significant policy reforms. Beginning in the nineteen-eighties and nineties, both countries began to liberalize their economies under the supervision of the I.M.F. and the World Bank, lowering trade barriers, removing price controls, cutting public subsidies, and strengthening public finances. In 2010, Tunisia’s budget deficit as a share of G.D.P. came to just 2.6 per cent. Egypt isn’t so frugal, but it has been making progress toward matching spending to revenues. During the past five years, its debt-to-G.D.P. ratio has fallen by nearly a quarter, and, relative to the size of its economy, it now has a smaller budget deficit than the United States. In April of last year, the executive board of the I.M.F. issued a statement commending Egypt’s “sound macroeconomic policies and the reforms implemented since 2004, which had strengthened the resilience of the Egyptian economy in the face of the global financial crisis.”

The biggest economic problem facing Egypt, Tunisia, and many other Arab countries is posed not by religion but by demography. During the past thirty years, infant mortality in the region has fallen by more than half. Fertility rates have also dropped, but not as quickly. The result is a rapidly expanding population, with vast numbers of young people. In Egypt, the median age is twenty-four. In Yemen, it is eighteen.

With the fertility rates still falling, populations will eventually stabilize. Until then, the Arab nations face a huge challenge. To provide enough jobs for the young, their economies would have to grow at rates similar to those of China and India, and so far they haven’t. Throughout the Middle East and North Africa, one in four people between the ages of fifteen and twenty-four is out of work, according to the International Labor Organization. And official figures may understate the problem. In Egypt, according to certain estimates, the real jobless rate among youth is between thirty and forty per cent.

What has made the situation especially volatile is that, during the past thirty years, many Arab countries have greatly expanded their higher-education systems. In Egypt, about a quarter of students now attend college of some sort, and there are few suitable jobs for them when they graduate. Unlike in the United States and other Western countries, the unemployment rate increases with the level of educational attainment. “Joblessness among Egyptian college graduates is almost ten times that of people with primary educations,” Marcus Noland, the deputy director of the Washington-based Institute for International Economics, and Howard Pack, an economist at Wharton, have pointed out. “It is no surprise that many of the leaders of the current unrest are university graduates.”

For an authoritarian regime, it is one thing to have to deal with mobs of peasants and laborers marching on the Presidential palace and demanding jobs and food. A temporary increase in food subsidies and a few cracked heads will often defuse the situation. But what unemployed graduates want—personal freedom, rewarding jobs, individual fulfillment—cannot be summoned up instantly. Noland and Pack, who have studied the region for years, refer to the recent convulsions as “Arab revolutions of rising expectations.” In the coming decades, the new governments in Egypt and Tunisia will be under pressure to meet these expectations—a challenge that democracy won’t necessarily make any easier.

Fortunately, there is a growth model at hand. “Fifty years ago East Asia faced similar demographic circumstances and harnessed it into a boom that continues today,” Noland and Pack note. “The key task is to penetrate global markets in labor-intensive manufacturing and service sectors.” In seeking to stimulate export-led growth, the next generation of Arab leaders will find that neither panegyrics nor jeremiads about the legacy of Islam are much help. A more fruitful place to begin would be with the recent history of Turkey, Indonesia, and Malaysia, or even poverty-stricken Bangladesh—another Muslim country that is making considerable strides. (It is now the fourth-largest exporter of clothing to the U.S.) Tunisia itself, with a new Hewlett-Packard call center operating in Tunis and an Airbus plant south of the capital, provides some examples worth studying.

To attract more foreign investment, and the technical know-how that comes with it, Egypt, Tunisia, and other Arab countries will have to provide political stability, limit and regularize corruption (the experience of Indonesia under Suharto demonstrates that it doesn’t have to be eliminated), and remove many of the petty barriers to doing business. Even within the Middle East, administrative rules vary greatly from country to country. According to the World Bank, it takes three times as long to enforce a contract in Egypt as it does in Jordan, and three times as long to start a business in Saudi Arabia as it does in Morocco. “This heterogeneity has two important implications,” Noland and Pack wrote in a 2008 paper. “First, it suggests that whatever the causes that are generating these outcomes, they are unlikely to be ‘deep’ ”—that is, inherent in Islam or in Arabic culture. “Second, the payoffs to achieving ‘best practices’ regionally defined could be quite large in some cases. . . . As a first step, much may be gained by simply matching one’s immediate peers. Egypt does not have to turn into Norway.”

True enough. The global division of labor admits all sorts—from Scandinavians to South Asians, from Copts to Confucians. Radical Islam may represent a special case, insofar as the backward-looking ideology and threat of violence associated with it hinder innovation and frighten off investors. But day-to-day worship of the sort practiced by hundreds of millions of Muslims is no more what is holding back the Middle East than Hinduism was what held back India or Roman Catholicism was what held back Ireland. Despite the arguments of new Weberians, people have always found a way to serve their gods and Mammon, too.

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