The difficulty to establish democracy in the Arab-Muslim world has become a “striking anomaly” for scholars of democratization. This paper argues that the lack of successful democratization in this part of the world cannot be seen as caused religion as such since there are by now several states with a majority of Muslims that have become democracies. Several other explanations such as values, culture, economic development, rulers’ access to natural resources or the history of colonialism have been refuted. This paper presents a novel explanation for this puzzle based on Elinor Ostrom’s approach to how local groups vary in their ability to solve the problem of the production of public goods. In Northwestern Europe, religion and also secular services managed by local religious institutions have been financed “from below” in local systems (parishes) that established institutions for semi-democratic representation, transparency and accountability. In the Arab-Muslim region, religion and local secular services have historically been financed “from above” by private foundations that have lacked systems for representation, transparancy and accountability. It is thus not religion, but how religion has been financed, that is the explanation for difficulties for establishing democracy in the Arab-Muslim world.
