Rentier State Research Articles

Holding on until the barrel is empty? Algeria's bumpy trajectory towards a post-rentier state

Rentier states are under increasing pressure to move towards a post-rentier state model as peak oil demand is approaching. However, it remains unclear if or how a rentier state can make this transition. To answer this, I developed an analytical framework including the mechanisms from the rentier state theory that need to be present to move towards a post-rentier state. This analytical framework is hypothetical, as up to now, no rentier state has been able to transition to a post-rentier state. Using Algeria as a case study, this novel framework is used to analyse the incremental evolution Algeria has made towards a post-rentier state since the year 2000. I argue that Algeria experienced several internal as well as external opportunities and threats and was influenced by its history on how it responded. Although Algeria fulfilled several steps of the framework, it failed to fulfil necessary sustainability aspects to become a post-rentier state.

The Interaction Between Economics and Politics in Rentier States

The Interaction Between Economics and Politics in Rentier States

Salafis’ hybrid trajectories of socio-political engagement in Tunisia and Algeria. A social movement perspective

ABSTRACT Over the past decades, numerous studies have enhanced the understanding of the Salafi milieu, revealing a diversity within the movement that goes beyond the traditional classifications of quietist, jihadist, and political Salafism. This research builds on recent scholarly work by exploring the porous boundaries of the Salafi realm, emphasizing the concept of hybridization. It examines the blending of registers and repertoires of action from other social worlds with Salafism, utilizing a social movement perspective and first-hand field data. The study investigates Salafi trajectories of engagement beyond the religious sphere in Tunisia and Algeria during perceived periods of constraint. This comparative analysis is both empirically and theoretically significant, given the distinct socio-political landscapes of the two countries. Tunisia was recognized as a democratic exception in the MENA region in 2011. In contrast, Algeria, rising from the ashes of its civil war, is regarded as a resilient rentier state largely unaffected by the Arab uprisings but significantly impacted by the Hirak movement in 2019. Despite these differences, both countries have experienced revolutionary moments and repressive campaigns, offering opportunities for the transformation of Salafism.

Power and space in a rentier state: The case of mega mall boom in Tehran, Iran

Space is intertwined with the exercise of power. While exertion of power in the production of space has been frequently studied in democratic political systems, little attention has been paid to non-democratic systems. This study aims to address this gap by focusing on the mega mall development process in Tehran. The study applies a four-dimensional view of power, including over, covert, latent, and disciplinary power, to investigate the exercise of power in the development of mega malls in Tehran. Using a constructivist grounded theory approach; data is collected through 48 semi-structured in-depth interviews and nine documents. The process of mega mall development in Tehran illustrates two levels of power dynamics. Firstly, powerful institutions emerge as winners while citizens lose out. This overt conflict involves monopolized decision-making and the rationalization and legitimization of ‘exceptions’, representing the covert and latent dimensions of power respectively. Secondly, the mega mall itself functions as a Panopticon by exerting disciplinary power. While power dynamics may share similarities across different systems, the distinctive aspect of mega mall development in Tehran lies in the monopolized process and pervasive perception manipulation as the key means of power exertion.

Rentierism—Political Instability Nexus: The Danger of Oil-producing Region Crisis in Nigeria

The growing popularity of the rentier state theory has made the focus on the impact of oil rents on political stability central for revealing how natural resource (including oil) windfalls link to the weakness of institutional quality in any resource-rich economy. Considering the core characteristic of a rentier state (such as Nigeria)—a distributive political economy—the article examines how the stability of Nigerian political system can be affected by oil rents over the period 1996–2021. Through the adoption of autoregressive distributed lag (ARDL) bounds test to cointegration and vector error correction mechanism (VECM) for the test of long-run causality, the apparent effect of oil rents on Nigerian political development is reflected in the analyses and findings. Empirical evidence supports the oil impedes political stability assertion, as there is statistically valid negative association between oil rents and political stability in the short run and long run. It is demonstrated that oil wealth could offer greater incentives for civil conflicts, which have resulted in escalating political problems. In addition, the causality mechanism implies that the relationship found merely indicates association between oil rents and the level of political stability in the long term, and it is not causal. Thus, it is posited that through the adoption and implementation of sound policy measures, the escalation of conflicts would likely subside, especially in most oil-rich regions or states, whereas civil order could be promoted. It is, therefore, critical to enhancing fairness in the use and distribution of oil wealth, improving people’s welfare, particularly in the oil-producing communities and in general, ensuring that democratic principles in the management of resource windfalls are sustained. JEL: Q33, Q34, H56, H12

Entrepreneurial universities and integrated sustainability for the knowledge-based economy: self-perception and some structural challenges in the Gulf region

Innovation and the promotion of entrepreneurship are requirements of the transition towards knowledge-based economies. Universities are assigned a key role in advancing entrepreneurship through the restructuring of teaching, research, and governance with an emphasis on innovation and sustainability. In the Gulf region, universities are increasingly adopting reforms aimed at redefining their missions towards entrepreneurial education. This study examines the impact of university-based innovation and entrepreneurial models on progressing towards knowledge-based economies, with Qatar University serving as a case study. It qualitatively assesses recent university reforms and contextualizes these reforms within limitations in the national context and the political economy of the rentier states in the Gulf. The findings suggest that for Gulf region universities to effectively become entrepreneurial and support sustainable development, they must cultivate an entrepreneurial culture and mindset. This requires structural and cultural shifts that resonate with national context, institutional values, and the global sustainability goals. The study indicates that a top-down approach to developing entrepreneurial universities is less effective. It advocates for policies and incentives that motivate universities to become entrepreneurial. Ultimately, the study’s insights aim to guide policymaking to develop knowledge economy frameworks in Qatar towards a sustainable future.

Niger Delta Development Commission (N.D.D.C.) and Provision of Infrastructure in Niger Delta Region, 2009- 2022.

The study examined the nexus between the Niger Delta Development Commission (NDDC) and the provision of infrastructure in the Niger Delta between 2009 and 2022. Specifically, the study was aimed at determining how violations of the NDDC Act on award of contracts undermined the development of infrastructure in the oil producing areas of Nigeria, as well as whether the projects of the Niger Delta Development Commission alleviated the incidence of inadequate infrastructure in the Niger Delta. The theoretical framework was anchored on the basic propositions derived from the theory of rentier state. A time series research design was adopted. The documentary method was used to generate the relevant data. The method of data analysis was content analysis complimented by the use of tables and diagrams. The result of the analysis indicates that the award of contracts without due process undermined the development of infrastructure in the Niger Delta between 2009 and 2022. It also demonstrates that the projects of the Niger Delta Development Commission failed to alleviate the incidence of inadequate infrastructure in the Niger Delta within the study period. Among others, the study recommends that development intervention programs should target structural injustice and inequity, which are the root causes of infrastructure deficit and lack of basic social amenities in the Niger Delta. Keywords: The Niger Delta, Government interventions programs, Niger Delta Development Commission, Infrastructure, contract.

Religion and authoritarianism in the Maldives: Is another authoritarian reversal in the Maldives imminent?

AbstractThe Maldives commenced its transition to democracy after its first multiparty elections in 2008. This was challenging due to the Maldives being a Muslim nation, its authoritarian legacy of monarchical rule before independence, and by dictatorship after independence. This article analyzes the postindependence rule periods of Ibrahim Nasir and Maumoom Abdul Gayoom, which were akin to one‐man dictatorships. The third autocratic president postindependence, Abdulla Yameen, was an electoral authoritarian as he implemented authoritarian measures in a multi‐party context. I assess if religion provided political legitimacy to these authoritarian leaders or if religion was exploited by leaders to gain political support and civic spaces. Theories of authoritarianism, religious populism, electoral authoritarianism, as well as concepts of the ulema‐state alliance and the rentier state are utilized. In addition to their authoritarian legacy, democratic presidents like Mohamed Nasheed and Mohamed Solih had grappled with politicians' manipulation of religion through political Islam, Islamic nationalism, and fundamentalism to derail democracy by equating it to Westernization. These events resonate with Samuel Huntington's description of the conflict between the West and Islam as a clash of civilizations. Crimes against liberal thinkers by Islamic extremists are an added challenge. There is a real danger of another authoritarian reversal in the Maldives.

Taxes in the Time of Revolution: An Experimental Test of the Rentier State during Algeria's Hirak

abstract: This article examines the rentier thesis that a government's control over oil resources should help it to resist pressures for democratization. The authors' online survey experiment, implemented during a nationwide mobilization for regime change in Algeria known as the Hirak, used interactive experimental treatments to provide information about the Algerian government's subsidies for fuel resources and low value-added taxes. Based on a sample of 9,721 Algerians, the authors find that when Algerians learn about their country's relatively high level of fuel subsidies and low level of taxes, their assessments of the government's performance improve. However, the treatment has null effects for outcomes involving demands for representation, such as intentions to join protest movements. An analysis of treatment heterogeneity in terms of wealth shows that the wealthy became much more supportive of the regime in response to the treatment while in some cases the poor became much less so. This treatment heterogeneity appears to be related to divergent views among the wealthy and the poor concerning the goals of the protest movement, with the wealthy favoring institutional reforms while the poor prioritized redistributive justice.

Towards Internationalization: Exploring Economic Diplomacy in the Middle East (GCC)

Internationalization is a crucial process for companies seeking growth and expansion in foreign markets, especially in the Middle East, where economies have been developing and diversifying business opportunities, seeing it as an attractive destination to expand their operations. This study presents a comprehensive analysis of the internationalization process of economic diplomacy by exploring the experiences of renowned Portuguese companies within the Gulf Cooperation Council. The Gulf Cooperation Council countries are integral players in the Middle East market, characterized as rentier states that are heavily reliant on oil and gas revenues and possess varying levels of economic and military strength, with Saudi Arabia and the UAE being the most prominent. The focus group method was applied in the qualitative research. It contributes to reinforcing the literature on internationalization processes, economic diplomacy, and the Middle East market. The findings provide valuable guidance to Portuguese companies, policymakers, and economic diplomats involved in promoting and facilitating international trade and investment.

State-centric water governance and ineffective coordination: developing a context-sensitive assessment in Iran’s rentier state

ABSTRACT Water reforms fail mainly because stubborn contextual constraints are not effectively considered. This study proposes a context-sensitive water governance assessment by designing a comparative approach within a case study and making inductive analytic generalizations. The framework is applied empirically to the Zayandeh Rud basin in the rentier state of Iran. The results indicate that the rentier-weak state context has led to centralized rent-seeking governance and limited implementation capacity – characteristics of the entire country, not just the water sector. Water issues will, therefore, require context-sensitive, problem-driven analysis beyond addressing water governance challenges.

Tools of regime stability: the political economy of sovereign wealth funds in Gulf rentier states

Why have Gulf resource-dependent countries transformed the role of their sovereign wealth funds (SWFs) from passive global investors to ubiquitous drivers of economic development? How does this role-change operate amidst fiscal scarcity, confounding macroeconomic expectations of commodity-based SWFs? Beyond a narrow view of funds as apolitical economic actors, this article puts forward the logic of SWFs as tools of regime stability to explain SWF development in Gulf rentier states. This logic advances that SWFs are adaptive strategies through which rentier states respond to evolving external pressure without compromising the fundamental pillars of regime stability underpinning allocative frameworks. Drawing on the Saudi case, the article finds that SWFs create de-risking pathways to mobilize private finance capital through environmental, social and governance (ESG) practices and market-based instruments like green bonds. Simultaneously, SWFs allow incumbents to revisit rentier governance by enhancing economic steering capacity while upholding, but restructuring, patronage networks. By shedding light on the political role of SWFs, this article contributes to debates surrounding rentier states and financialization literatures. It highlights how the elasticity of rentierism as financialized forms of state-led economic development does not erode state capacity but rather empowers ruling elites with a new range of tools and resources to upgrade rentier governance in times of economic transitions.

Rentier States and the Transition Away From Oil: Oman, Kuwait, and Saudi Arabia

Rentier States and the Transition Away From Oil: Oman, Kuwait, and Saudi Arabia

State autonomy, economic reform & business elite influence in the GCC

ABSTRACT This study challenges traditional rentier state theory and contributes to a new generation of scholarship focused on state-business relations by evaluating the relationship between different degrees of state policymaking autonomy and business elite influences in political and economic institutions. The findings of this study address central policy questions about economic reform in the Gulf Cooperation Council countries. Using primary data from my case studies of Qatar and Kuwait, I posit two arguments. First, states with lesser business elite influence over political institutions have more autonomy to realise their economic reform goals; a less dominant and influential business elite circle will more likely submit to state-led economic reform initiatives. Greater business elite dominance, meanwhile, tends to create a powerful bloc undercutting economic change, such as labour reform or new regulatory frameworks, that would benefit the long-term stability of the state. Second, rentier states with higher degrees of state-led capitalism have more autonomy to conduct economic reforms; state-led capitalism produces more coherent and cohesive state apparatuses that can incentivize business elite cooperation.

The Political Economy of the Kafala Abolishment in Saudi Arabia

Saudi Arabia – an oil-rich rentier state, receives a large number of guest workers, and they were maintained under the controversial Kafala system. Recently, Saudi Arabia announced to abolish this system to come into effect in March 2021, but excluded domestic workers. Such observations show that there are political-economic incentives for the authority in abolishment apart from the humanitarian ground. Again, the current regime is willing to reduce its dependency on oil by diversifying its economy. Crown prince Mohammad Bin Salman announced massive reform plan – “Saudi Vision 2030” – to bolster FDIs and develop the public sector and service industries, where they need skilled labourers and experts to run their economy, where Kafala is not suitable. In this context, this paper would like to follow the political economy of migration policy as an analytical framework to provide a political-economic analysis of Kafala abolishment in Saudi Arabia by looking at the current transformation and Kafala abolishment.

Экономика Пакистана – причины и последствия замедленного роста

Immediate causes of Pakistan’s economy lagging behind the economies of neighboring countries, such as Bangladesh, India, and China, in the first quarter of the current century lie in a mixture of internal and external circumstances. Primarily, it is the state’s involvement in the “war on terror” that unfolded after the events of September 11, 2001, as well as exogenous natural shocks and financial policy with a built-in dependence on external sources of credit. The deep underlying factors of slower growth include the fundamental immutability of the social structure, the dominance of conservative capitalism, the seizure of the state by elites, which seek short-term enrichment, the transformation of Pakistan into a kind of “rentier state”. Nevertheless, the country has certain potential for development. Firstly, a huge young population, which allows for the use of the so-called demographic dividend. Secondly, the state’s favorable geographical location that may help Pakistan to become a bridge between Central and East Asia, on the one hand, and the Near and Middle East, on the other. This advantage has already been partially realized through the implementation of the China Pakistan Economic Corridor (CPEC) investment project. Thirdly, Pakistan’s natural resources are not sufficiently explored and deposits of not only oil, natural gas, and coal, but also metal ores and rare earth minerals can be discovered. In the middle term, Pakistan may embark on the path of accelerating economic growth and become – among other achievements – one of Russia’s important partners in Asia.

İKLİM DEĞİŞİKLİĞİ VE KÖRFEZ: ETKİLER, EYLEMLER VE REKABET

Traditionally, Gulf countries are widely known as rentier states. Their economic structures depend on the income from fossil fuels such as oil and gas. These revenues obtained through natural resources directly influence politics. For example, by exploiting natural sources, Gulf countries designed their foreign and economic politics. But climate change forced Gulf countries to transform their policies since it emerged with problems such as increased temperatures. This directly negatively affected Gulf countries’ traditional positioning regarding foreign and economic policies. In addition, it has been revealed that the oil and gas-based economies are in danger since these sources are about the end. This process altered the Gulf countries’ economic politics. This paper seeks to analyze how climate change transformed the geopolitics in the Gulf. The paper argues that Gulf countries started to change their foreign policies by diversifying actors. Moreover, they are more eager to increase their income alternatives. For example, they launch visions encouraging investment in sports, music, and modern cultural events. Further, to preserve relations with Western countries, which are sensitive to climate change, Gulf countries began to give more importance to activities such as renewable energy, nuclear energy, and mineral exploration. In this regard, competition has risen within the Gulf. Riyadh, Abu Dhabi, and Doha administrations contest in several fields, such as becoming a trade hub and leading the regional order by increasing soft power.

TEK KUTUPLU SİSTEMDE BÖLGESEL GÜÇLERİN GÜVENLİK YAKLAŞIMLARI BOYUTLARI

The power capacities of the states and the distribution of these capacities are important in determining both the polarity of the system and the characteristics of the countries in terms of being a superpower, great power, and regional power within the anarchic structure of the international system. Within the framework of the regional policies of the superpower, the security threats of the countries in the region are defined, and in order to combat these threats, it is emphasized that the internal threats are more important for the security of the regime within the framework of the characteristics of the regional powers. The features of a state such as competing allegiencies, monarchical state structure, being a rentier state cause the security of the regime in that state to be more important and prioritized than the security of the state. In this category, it is necessary to evaluate the state with a different approach than the alignment and bandwagoning strategies used by the classical approaches for the security strategies of the superpowers and great powers. This article examines a range of local conditions and motivations regarding the security behavior of states, especially regional powers, that have not been adequately discussed in the literature. In addition, it is aimed to strengthen the argument by explaining what is effective in determining the alliance relations of regional powers, unlike the great powers.

Factors Determining the State Behavior of Saudi Arabia as a Regional Power

Classical approaches cannot produce conclusions that can be generalized in order to analyze the state behavior of regional power countries such as Saudi Arabia and to understand the real reason behind the alliance relations. The reasons that determine the position of regional powers in the system and originate from their local positions confront them with internal threats rather than external threats. In this case, internal threats take precedence over external threats. Since most of these countries have monarchical state structure, competing allegiencies and rentier state economic features. Therefore, the security of the regime is more important than the security of the state and the people in these countries. This always causes an internal threat to the regime in Saudi Arabia. The local characteristics of regional powers necessitate them to deal with their internal threats before their external threats. Thus, a regional power like Saudi Arabia combats the threat, primarily by allying with the foreign power interrelated with its internal threat or by improving relations, it balances and sometimes suppresses the internal threat with an external threat and then it can focus on the real threat. To explain this form of balancing, the “omni-balancing” strategy has been used and the systemic and local characteristics of Saudi Arabia has been emphasized.

ПОЛИТИКА БЕЗОПАСНОСТИ САУДОВСКОЙ АРАВИИ КАК РЕГИОНАЛЬНОЙ ДЕРЖАВЫ В ОДНОПОЛЯРНОЙ СИСТЕМЕ (2010-2020)

When the security policies of Saudi Arabia between 2000-2010 and 2010-2020 are examined, it can be seen that although there is no change in the internal threats to the Saudi Arabian Regime, there has been a change and transformation in its external threats. Therefore, although the internal threats are the same, in the alliance relations it has formed to balance the internal threats with the interrelated external threats, the interrelated external threats and the main threat have changed. In this case, it shows us that state behavior and alliance relations are constantly re-established as instant security measures. Threats, which are also seen as the dynamic structure of the international system, and the change in alliance relations necessitate a multifaceted approach for regional powers. This is also due to the features of Saudi Arabia such as the monarchical state structure, the competing allegiencies of the people, and the fact that it is a rentier state. For societies where the security of the regime is more important and prioritized than the security of the state due to internal threats, it should have multi-layered factors to ensure their security, because of their local characteristics. For Saudi Arabia, these factors consist of internal threats, an external threat interrelated with an internal threat, and regional and global threats. This situation gives rise to the omni-balancing strategy, which means that Saudi Arabia forms alliances with foreign powers interrelated to its internal threats and balances internal and external threats with each other. In cases where omni-balancing is not possible, various reforms, social assistance and cooperation initiatives come into play.