The Rentier State: Antidemocratic Cause & Effect

Rents accrued to governments in MENA mean the country’s ruling elite are not beholden to a tax-paying public. This anti-democratic effect of rents is attached to how these rent-receiving governments administer taxation. In many cases, a country may not need to levy taxes on its citizens, or in other cases, it can distribute resource revenues to the public or competing factions to quell calls for democratization. The interaction of rent-seeking behavior with the creation of coercive state machinery to repress calls for democracy also illustrates this causal mechanism as rents may enable governments to prioritize military spending or internal security. Whether a government chooses to invest its oil revenues in coercive tools to repress democracy or distributive systems to deliver social welfare to the people and patronage to important political players will determine how damaging the political and social effects of oil rents, not necessarily how much a share of national output belongs to rent revenues.

The scope of rents while important does not fully encompass the causal effects of resource wealth on oil-rich states in MENA. Resource-poor countries may derive little rent from resource extraction, but the important thing is not that they receive small amounts of rent, but rather that there are distinct political and social consequences that reduce the transparency and openness of a government attached to these revenues. The definition of a “rentier state” offered in Ross’ article emphasizes the scope of strategic and resource rents but also illustrates how rents penetrate deep into political power-balancing, buying acquiescence from opposition forces, and strengthening repression tactics. Furthermore, the very nature of rent-seeking behavior in states where resource extraction is not labor intensive can contribute to a political environment with few alternative sources of economic and political power (or social capital) other than the government or powerful elites. All of these consequences of rents are not directly tied to rents themselves; although, a larger pool of rents would equate to potentially more antidemocratic and cronyism, what we are concerned with is why governments in MENA use their oil revenues to create and sustain authoritarian regimes. The choices authoritarian regimes in MENA make with their rents will involve the political and social context of each individual government, but, in my view, these choices have more to do with outside factors and historical particularities that cannot be accounted for by amount or extent alone.