Abstract
The drop in oil prices in 2014 and the price crash triggered by the COVID-19 pandemic in 2020 have had major repercussions for the Middle Eastern political economy. For these events, the chapter discusses both the empirical relevance of policy adjustments and academic approaches to political economy apt for analysing relevant adjustment policies. First, it explores the oil price declines as a potential game changer for the political economy in the Middle East. The authors claim that structural changes in the global energy market make it unlikely that oil prices will climb above USD 100 per barrel again in the foreseeable future. Second, it outlines the most prominent concept for analysing the political economy of the Middle East: rentierism. Third, it scrutinises two repercussions of decreased oil prices for the Middle East. For the Arab Gulf, oil-rent abundance has flipped to scarcity, and for Egypt, Jordan, and Lebanon, the energy bill has reduced significantly. These form the new context in which policy adjustments are taking place. Fourth, it outlines a heuristic framework on how structural changes caused by oil price declines translate into policy change. The authors introduce four domains of adjustment policies: rent-seeking policies, austerity measures, policies of taxation, and structural reform measures.
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