The Rentier State: Does Rentierism Hinder Democracy?

Abstract

Given the persistence of authoritarianism in almost all Islamic countries in the modern period, there has been a strong tendency to establish a causal connection between Islam and authoritarianism. An alternative explanation derived from the rentier-state model may render this connection spurious, as it advances a compelling explanation of authoritarianism. Far from being an outcome of Islamic culture or the legacy of historical Islam, this model focuses on the effect of the availability of enormous petrodollars on the structure and functions of the state in Islamic countries. The concept of the rentier state, or the rentier economy, applies to a country that relies on substantial external rent in the form of the sale of oil, transit charges (Suez Canal), or tourism. Rentier economy has farreaching political, social, and cultural consequences. First, only a small fraction of the population is directly involved in the creation of wealth. As a result, modern social organizations associated with productive activities have been developed only to a limited extent. Second, the work-reward nexus is no longer the central feature of economic transaction, where wealth is the end result of the individual’s involvement in a long, risky, and organized production process. Wealth is rather accidental, a windfall gain, or situational, where citizenship becomes a source of economic benefit.