The political economy of state-formation in the Arab Middle East: Rentier states, economic reform, and democratization

Abstract

ABSTRACT This article argues that rentier states stand in contrast to states that have to rely on domestic resource extraction. They display a particular path to state-formation that by and large defies the European path of state-formation: natural resource dependence (mainly oil dependence) has created weak states that are autonomous from societal demands and that do not rely on domestic taxation. State-formation has not been accompanied by political accountability, transparency, or what Charles Tilly has termed the ‘civilianisation of government’. In rentier states the expenditure side of public revenues is most clearly linked to a state-building agenda of creating societal peace and political acquiescence. On a theoretical level, this article offers a new reading of state-formation based on the form and the performance of the state. Focusing on a functional understanding of statehood, it thereby highlight where Arab states are strong (security function and in times of oil booms, welfare function) and where they are weak (representation function, and in times of fiscal crisis, welfare function).