BY ALEXANDRIA REID, 27/11/2016
In early 2011, as an unexpected wave of revolutions spread throughout the Middle East and North Africa unseating dictators from their long held family thrones, patterns of regime resilience seemed to reaffirm Rentier State Theory (RST). Several scholars explained the survival of petroleum-exporting states with reference to the key axioms of RST; namely, that in return for the distribution of rents, the state could expect a politically disengaged and apathetic population (Ross 2011, p.2). Yet the overthrow of Gaddafi’s Libyan regime and revolutionary mass mobilization initially witnessed in Bahrain stand out as two conspicuous examples defying the expectations of rentier state theorists. To revisionist scholars, RST’s cause and effect explanation of regime resilience disguises a more complex reality, that must account for themes of historical state formation and how the distribution of rent is harnessed in society to reinforce, or undermine, regime resilience.
Originally proposed by Hossein Mahdavy in relation to the pre-revolutionary Iranian regime, RST has since then been a primary tool of analysis for the political and economic development of the Middle East and North Africa. Beblawi identifies the rentier states as having three key characteristics: firstly, whilst there is no ‘pure rentier economy’ where sources of national revenue are wholly derived externally, the rentier state must depend upon external, as opposed to internal, rents as primary source of national revenue (Beblawi 1987, p.387). Secondly, during the generation of external rents ‘a minority in the population must be engaged in the generation of the rent, while the majority is involved only in the distribution or utilisation of it (Luciani and Beblawi 1987, p.10).’ Thirdly, a rentier economy liberates the state from the necessity of imposing taxes upon society. The rentier state therefore characteristically provides public goods by deploying oil rents in the form of: ‘(1) general public expenditure, (2) employment, and (3) public policies, especially those relating to economic subsidies and land allocation (Levins 2013, p.396).’ Rentier states are therefore distinguished as ‘distribution’ or ‘allocation’ rather than ‘production’ states.
By utilising external revenue from oil rents rather than funds accrued through taxation, Anderson identifies that the rentier state is ‘virtually autonomous from its society, winning popular acquiescence through distribution rather than through taxation and representation (Anderson 1987, p.10).’ This is juxtaposed with the Western experience of state formation and suggests that rentier states operate on the reverse of the slogan of the American Revolution, ‘no taxation without representation’ (Vanderwalle 1987, p.160), since demands for ‘democratic representation and government accountability rose out of the attempt of the ruler to impose new taxes (Luciani 2012, p.93).’ This results in a rentier variation in the social contract for which citizens are expected to tolerate a lack of political representation in return for minimal taxation. Theorists suggest this engenders a ‘rentier mentality’ amongst a population who are expected to be disengaged from the local and national economy because the politics of distribution break the classical ‘work-reward causation (Beblawi 1987, p.385).’
By virtue of their reliance upon rents distributed by the state, citizens are expected to be almost entirely politically disengaged. Without a demand for accountability from the populace, Luciani suggests ‘democracy is not a problem for allocation states (Luciani 1990, p.76).’ Political quietism is the expected status quo for the rentier state, and opposition to the state is expected to arise only when economic benefits are jeopardised by a fluctuation in external rents, thus affecting the ability of the state to functionally buy their own legitimacy.
Yet turbulent mass mobilisations in both Bahrain and Libya, and more contained forms of political activism in Saudi Arabia and the UAE in 2011, question the notion that the rentier state is capable of manufacturing ‘political indifference or placating political opposition at will (Baskan, al-Zo’by 2015, p.412).’ Whilst grievances voiced in a petition signed by 133 public figures in the UAE, demanding free elections to the state Federal National Council, fell far below the level of mass mobilisation, Baskan and al-Zo’by argue that the very existence of this level of political antagonism nonetheless constituted a significant ‘oppositional discourse’ for which RST cannot account.
Okruhlik suggests this is because the political element of RST’s political economy approach has thus far been missing from the theory (Okruhlik 1999, p.296). Okruhlik proposes that the socio-historical context of the state, particularly during state formation, must be accounted for in the analysis of the resilience, or lack thereof, in the rentier states of the region (Okruhlik 1999, p.310). Echoing this, Lowi asserts that RST, in its classical form, is missing two vital elements that explain variations in regime resilience. First, ‘that in authoritarian states with deeply divided societies, the seeds of breakdown tend to precede oil-based development and derive, as in non-oil-exporting states, from problems related to the construction of the nation; and second, that the decisions of political leaders, whether they relate to nation-building or to utilising oil rents, are at least as important as structural variables in explaining outcomes (Lowi 2004, p.83).’
How and to whom oil rents are distributed by the state is ‘rarely benign’ (Okruhlik 1999, p.297). Whilst rent may be abundantly available during boom eras, it is widely accepted that authoritarian elites will nonetheless conform to a ‘minimum winning’ coalition when distributing rent, composed of ‘the smallest possible group of supporters necessary to maintain its first-order preference of survival (Yom 2011, p.213)’. This inevitably entails a strategically driven political decision by the state about whom does or does not receive the full economic benefits of rentier citizenship. Assuming that money does buy regime loyalty and political detachment in those receiving it, this nonetheless results in a condition in which the state creates its own social opposition by disenfranchising certain elements of society through its allocation policies (Benli 2014, p.80).
This demands a reconsideration on sources of regime stability in petroleum-exporting states during the Arab Spring. In Bahrain, where the Sunni al-Khalifa dynasty presides over a Shi’a majority population, the regime has historically discriminated against the Shi’a population in both the distribution of oil rents and in the bureaucratic institutions of state employment (Gengler 2011, p.2). Similar sectarian patterns in the distribution of rents prevail in Saudi Arabia. It is notable that protests were largely confined to the Saudi Eastern Province, which houses most of their Shi’a domestic. In keeping with Okruhlik’ s assertion that in the politics of distribution the state creates its own domestic enemies, it is hardly surprising to find Bahrain to be the most unstable rentier regime in the Gulf during the Arab Uprisings given that distribution has systematically discriminated against the majority of their population. This not to dismiss that both states initially saw protests across a much broader and representative demographic of society. Yet revisionist scholarship contextualises how elites were able to manipulate historical societal divisions, made more acute through distributional patterns over time, to maintain regime control.
RST remains a useful lens for approaching some sources of regime resilience in the Arab Uprisings, especially the large economic stimulus packages issued by rentier states during the period of unrest. Yet the theory is most convincing when combined with contemporary revisionist scholarship, providing necessary supplementary tools of analysis to understand rentier societies. Contextualising the role of oil in domestic governance and accounting for the significance of the pre-oil historical development of the state is key to understanding how rent is distributed to achieve, or to undermine, regime stability.
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