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What aspects of politics in the Middle East and North Africa can ‘rentier state theory” explain?

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The rentier state theory is a theory that looks at states whose income is derived almost entirely from a singular natural resource. In the majority of cases, this resource happens to be oil, which is something many Middle Eastern and North African states enjoy in abundance. Rentier states often share similar qualities, and it can be argued that there is effectively a blueprint as to how these states run. This essay will use the examples of Saudi Arabia and Libya to outline how the rentier state theory applies to both the Middle East and North Africa, while also touching on other nations to provide a larger perspective. 

Firstly, before assessing whether this theory applies to these areas it is important to define the idea of a rentier state. Charlotte M Levins provides an excellent summary with, “In a rentier state, the government collects oil revenues and distributes the proceeds to the population. The population relies on their government for food, shelter, income, and job opportunities. Because the government in a renter state plays the role of benefactor, citizens will not rush to demand an entirely new system even one with increased representation” (2012). 

It is evident that this definition certainly applies to many of the states in question. For example, in Saudi Arabia “The oil and gas sector accounts for about 50 per cent of gross domestic product, and about 70 per cent of export earnings” (Annual Statistical Bulletin, 2021). Because of this, citizens can rely on the government instead of making money for themselves. This in turn creates a system that damages other areas of the economy because the need for other enterprise is minimal. This notion is backed up in MB Altunisik’s work, which reads, “the oil industry does not incorporate much local input, and the local economy, in turn, does not make much use of the product. As a result, in rentier economies the rest of the economy is not as well developed” (2014). Saudi Arabia perfectly embodies this concept as “the average monthly wage for a public worker in Saudi Arabia in the first half of 2020 was about 11.4 thousand Saudi riyals. In comparison, the average monthly wage for a worker in the private establishment sector was 5.3 thousand Saudi riyals in that year” (Statista Research Department, 2022). This shows that working for the government will on average provide a worker in Saudi Arabia more than double the salary of working in the private sector. From this, we can extrapolate that the areas of the economy outside of oil production are very weak, which is predicted in the rentier state model. It is this way because there is simply no short-term need to invest in other areas of the economy because of the extreme wealth to be gained in the oil industry. 

The reliance that citizens have on the state in a rentier state system often leads to an authoritarian style of governance. Because of the economic power the state holds, and the reliance the people have on the success of the regime, the easier it is to form dictatorships. An investigation by Jesus Crespo Cuaresma, Harald Oberhofer and Paul A. Raschky found “that oil abundance increases the duration of dictatorships” (2010) by using a theoretical model using a dataset comprised of 106 dictators. Due to this occurrence rentier states often become highly militarised and often deny their populations of freedoms and liberty. This is because it is not beneficial for a dictator to give freedom to their citizens as it increases the likeliness of their overthrow. Camilla Sandbakken found that “The first feature of rentier states is that oil revenues make them autonomous from their population because they do not have to tax their populations for income. The lack of taxation reduces the basis for citizens to demand accountability from and representation in the government, and thus makes democracy less likely. It follows that, ‘states that do not face a fiscal crisis and enjoy continuing access to exogenous rent will be able to postpone democratization indefinitely’. This is the so-called ‘no taxation – no representation’ thesis. The view that taxation tends to produce more representative government is based on a historical understanding of political development in early modern Europe and colonial America. The monarch taxed his/her subjects in order to obtain revenues for warfare. Because it was impossible to collect the taxes without considerable cooperation from those who were taxed, the monarch granted taxpayers some influence over government spending and tax rates to induce greater willingness to pay. It was more convenient for both monarchs and taxpayers to negotiate collectively, and so representative government was formed” (2006). For these reasons, it is common to witness civil wars in rentier states such as in the regions of North Africa and the Middle East. A good example of this real-world application of the rentier state theory can be seen in Libya. After changing the system of government in 1973, many Libyans began to grow unhappy with their lack of democracy. “The Qaddafi regime responded to increasing domestic dissent by tightening its grip on the media and justice system, and sometimes resorting to brutal repression” (James Siebens, Benjamin Case, 2012). Furthermore, “corruption, economic mismanagement and unemployment contributed to an erosion of support for the regime”. Also, “in addition to a large military, the repressive apparatus was expanded in the 1970s to include the infamous revolutionary committees. Their activities included arbitrary arrests, executions and intimidation of officials and the public. Furthermore, Qaddafi allowed no political parties, independent media or political associations outside the regime’s governing structures” (Camilla Sandbakken, 2006). It is clear as to why a regime with these types of practices would lead to civil war. When populations are oppressed, eventually they tend to hold revolutions. Because rentier states produce so many oppressive leaders such as Qaddafi in Libya, it leads to many revolutions and uprisings. Although there are other factors to consider such as religion and ideology, this aspect of Northern African and Middle Eastern politics can certainly be explained by the rentier state theory.

As mentioned previously, a huge factor in Northern African and Middle Eastern politics is the role of religion and race. While it is harder to use the rentier state theory in this instance to explain the role that religion and race play, it is possible to conclude that being a rentier state can accelerate and/or magnify the effect of religion and race on politics. It could be argued that when there are competing religions or ideologies in a state, it is not preferable to have one have total dominance and authority over the other. When a state is resembling that of a rentier state, this could lead to an authoritarian situation where one religion/ideology has total power and can discriminate against and withhold freedom from the other. Syria is a good illustration of this concept, where the government has illegitimate control over a nation that is religiously divided. “In the case of Syria, while it is not a ‘classic rentier state’ in the sense that the state does not rely on oil for the bulk of its revenues, Syria is in fact a ‘quasi-rentier state’ that relies upon foreign aid for a large proportion of its revenues. The crucial point … here is that quasi-rentier states such as Syria exhibit the same behavioural and policy patterns as the classic rentier states in stressing the allocative function of the state and the circulation of rent throughout the economy over the productive economic sphere” (Leonard Robinson, 1996). Here, Robinson summarises how while Syria does not necessarily rely on oil for its revenue, they are still an allocation state rather than a taxation state. In turn, this means that the government has almost complete autonomy over the economy, welfare and social issues. This is and has proven to be a dangerous scenario in Syria as the Syrian government and leader, Bashar Al Assad are Shia Muslims, which make up less than 10% of the Muslim population with Sunni Muslims totalling around 75% of the entire population. An example of Sunni discrimination can be found in a 1989 article written by the Research Directorate, Immigration and Refugee Board in Canada that reads, “The government has banned the activities of a number of groups, and foremost among these being the Muslim Brotherhood (al-Ikhwan al-Muslimin), a Sunni Islamic fundamentalist group which openly challenged the Ba’athist secularist government of President Hafez al-Assad in the seventies and early eighties. [U.S. Department of State, Country Reports on Human Rights Practices for 1987, (Washington: U.S. Government Printing Office, 1988) Membership in the Muslim Brotherhood is prohibited, and, according to one source, punishable by death. (Delury, World Encyclopaedia of Political Systems and Parties) Amnesty International reports that a number of the prisoners who have died as a result of injuries sustained through routine torture or ill-treatment while imprisoned, were prisoners arrested on suspicion of involvement in the Muslim Brotherhood. [Amnesty International, Syria: Torture by the Security Forces, (London: Amnesty International Publications, 1987). This shows how the powerful minority can repress the majority due to their rentier state nature. If Syria did not resemble a rentier state, this type of behaviour and discrimination would be impossible due to their illegitimacy and inability to collect taxes. If the Syrian government relied on taxes to operate, they would immediately fail as the population would be unwilling to support the government. Therefore, it is safe to conclude that the rentier state theory can explain some of the religious politics in the Middle East and North Africa. This is because if these states relied on their people more for support there would be far less religious discrimination.

Besides the fact that Saudi Arabia is a key example of a rentier state, it is also an example of a state that is perhaps learning from the damages this can cause. Being a rentier state is dangerous as the economy of the state is almost all dependent on the price of oil. If oil prices were to drop significantly then a rentier state would be left with no other advanced industries to offset the fall in revenue. While in the short history of Saudi Arabia’s independence, oil money has helped shape and transform a prosperous nation, it is being realised that the rentier state model cannot support the success of a nation in the long term. This is the reason that Saudi Arabia is beginning the diversification of its economy and increased spending on sectors such as education to improve its future. They have put into place a plan known as ‘vision 2030’ which aims to enhance the private sector, educate the youth and provide more freedom’. This move away from the rentier state model has seen more relaxed laws come with it, as to gain legitimacy and support from the people. As mentioned previously in this essay, when states are rentier, they do not have to provide their citizens with much liberty. Therefore, it is important for Saudi Arabia to do this as to not spark revolution as they disengage from the rentier state model. An example of these new freedoms is the lift of the driving ban on women. If Saudi Arabia is successful in the following years with this plan, it may inspire other states in North Africa and the Middle East to depart from the rentier state model.

In conclusion, the rentier state theory can effectively explain much of the politics in Northern Africa and the Middle East. It can explain many states economies and can even better explain the forms of leadership and governance in these areas. The theory perfectly explains why so many states in these regions are under authoritarian rule and why democracy is far less common. The theory also gives investigators reasons as to why other factors such as religion play a bigger role in rentier states. Even though the rentier state theory is an excellent explainer of the situations and politics in Northern Africa and the Middle East, it is perhaps becoming outdated. With increased globalisation and the spread of ideas, states such as Saudi Arabia are considering the abandonment of the rentier state model. It can be argued that within the next century the theory will not explain the politics of these regions to the degree it does today.

Reference:

Essay written in 2022

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Oil pumpjacks and storage tanks at an oil extraction site in a rural landscape

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