Sep
22
Rentierism Reflection
September 22, 2023 | | 2 Comments
Oil rents do pose a threat to the political and social outcomes for MENA, but it is not the only cause of MENA’s “exceptionalism.” Taxation (and the lack of representation without it), spending, and group (non) formation are the factors that make up the rentier effect. The rentier effect also interacts with repression and modernization.
Oil rent is high in this region. States rely on the international market, which can lead to fluctuation. These stagnant prices can be difficult for a resource-rich country’s economy when there are frequent drops in barrel prices, which leads to foreign borrowing and eventual debt, such as in Egypt. However, when prices are steady with no budget deficit, governments do not have to tax their populations because of the income coming into the country (since they can afford their budget without taxpayer money). According to scholars, this can make a population less inclined to question what is happening with their money. My belief, illustrated by the Arab Spring Uprising, is that people will be inclined to ask these questions whether they are taxed or not. Instead, without taxation, the government feels they do not owe as much transparency to their citizens.
Not all countries in MENA are the same. Their experiences with the rentier effect differ according to their resources and their labor market. For example, resource-rich and labor-poor countries (RRLP) do not have to use as much repression in their state because they have the sums of money to give citizens when things get too disruptive (since they have a surplus to pay off their small population). Resource-rich, labor-abundant (RRLA) countries can not do this. While they may have significant funds, it is not enough to distribute to their entire population. However, they may be able to pay off a few elites. The RRLA countries must then lean into repression more when citizens become disruptive.
RRLP countries rely on imported labor from labor-abundant countries. Imported labor entails that the working population is less likely to unionize (form groups) because they are not citizens. The RRLP countries also ensure these laborers do not get citizenship, guaranteeing no group formation. RRLA countries do not have this advantage. RRLA countries have native citizens who comprise their workforce, and these native citizens may become unified to improve their conditions. Group formation also causes RRLA countries to repress their citizens more, so there is no collectivism.
There are also historical differences between these regions. RRLP countries tended to have significantly less colonization than their RRLA counterparts. RRLP countries would have more autonomy when being colonized and for less time. Colonization occurred in RRLA areas for significant periods- like Algeria. Including more colonization, RRLA countries tend to have more historical breaks or coups/overthrows. RRLP countries have had the same ruling power since the formation of their country by Western powers, such as in UAE.
RRLA countries tend to have failed industrialization. The country may have suffered from Dutch Disease and could not handle the new influx of citizens into urban areas. Others may have attempted to modernize and failed because of regime change, lack of funding, loss of the agricultural sector, or ineffective distribution of funds. Their attempts to “develop” damaged the outcome of their state.
The factors that affect MENA vary among rent, repression, and modernization. These components affect MENA depending on their resources, wealth, and labor force. There is not one factor that has contributed to MENA’s “exceptionalism.” MENA is a diverse group of countries with overlap; there needs to be micro, meso, and macro analysis to understand the region.
Citation
Ross, Michael L. 2001. “Does Oil Hinder Democracy?” World Politics 53 (03): 325–61. https://doi.org/10.1353/wp.2001.0011.
Comments
2 Comments so far
This shows a good grasp of the most important dynamics. One correction: Jordan does indeed have continuity of rule from the period of British colonization but, unlike the Gulf monarchies, it is not RRLP but RPLA.
Thank you, Professor,
I just fixed it! After this post, I had a better understanding of the different RRLP, RRLA, and RPLA countries. The UAE fits much better in this context.