Rentier fiscal crisis and regime stability: Business-state relations in the Gulf

Abstract

Are sectorally dependent states destined to regime instability as a result of chornic fiscal crisis? Literature emphasizing the importance of a country’s sectoral endowment suggests that oil exporters in particular should exhibit similar policy stagnation and regime decay as a result of fiscal crisis. The cases of Kuwait, Qatar, and Bahrain in the 1980s and 1990s demonstrate that fiscal crisis outcomes are not uniform. This article develops the critique that structuralist assumptions about what drives business-state relations during crisis are flawed. Abstract logics typing exogenous price sifts to the character of business-state interaction neglect the historical and instituional grounding of those relations. It is variation in the historical and institutional crafting of business-state relations that best explains how these relations shape reform under crisis and how regime stability is affected.