The four Arab Human Development Reports, 2002-2005, sponsored by the United Nations Development Program and written by over one hundred Arab scholars based in the Middle East and elsewhere, have attracted more attention and controversy than any other official studies of development in recent years. The Reports are controversial in at least two respects: First, they adopt a conception of development as freedom that excludes all economic variables. Second, they emphasize three major themes, building a knowledge society; expansion of political freedoms; and women's empowerment, that challenge in fundamental ways central features of institutional regimes and cultural and religious traditions in Arab societies. This paper is critical of the espousal of a form of egalitarian liberal democracy as a benchmark for formulating reform strategies in Arab societies, particularly given the role and influence of path dependence in explaining the status quo. This form of universalistic utopianism tends to discount the dramatic differences in performance amongst various Arab societies on a wide range of economic, social, and political indicators and fails to exploit the potential value of these differences in identifying and exploiting openings for feasible reform strategies.