- Rentier state
A rentier (pronounced // or //) [Oxford Dictionary of English (
IPA ): /'rɒntɪeɪ/. Merriam-Webster's Collegiate Dictionary (respelling): äⁿ-'tyā (IPA equivalents: /rɑ̃'tɪeɪ/, /rɒ̃'tɪeɪ/).] is an individual who depends on income derived from rents, which in turn are defined as “a reward for ownership of all natural resources” or the “income derived from the gift of nature.”p.85, Beblawi, H., 1990, The Rentier State in the Arab World, in Luciani, G., "The Arab State", London, Routledge ] A rentier state is a term inpolitical science andinternational relations theory used to classify thosestate s which derive all or a substantial portion of their national revenues from the rent of indigenous resources to external clients. The term is most frequently applied to states rich in highly valuednatural resources such aspetroleum , however it could also be applied to those nations which trade on their strategic resources (such as permitting the development of an importantmilitary base in their territory). Dependent as they are on this source of income, rentier states may generate rents externally by manipulating the global political and economic environment. Such manipulation may includemonopolies , trading restrictions, and the solicitation ofsubsidies oraid in exchange for political influence.Hazem Beblawi suggested four characteristics that would determine whether or not a state could be identified as “rentier”:
#if rent situations predominate
#if the economy relies on a substantial external rent – and therefore does not require a strong domestic productive sector
#if only a small proportion of the working population is actually involved in the generation of the rent
#and perhaps most importantly, that the state’s government is the principle recipient of the external rent.ibid, p.87-88]The emergence of the new oil states and their increasing importance in world trade in the 1970s brought a renewed interest in thinking on rentier economies in the aforementioned disciplines of
political science andinternational relations .ibid] Examples of rentier states include oil producing countries in theMiddle East region includingSaudi Arabia ,United Arab Emirates ,Iraq ,Iran ,Kuwait andQatar as well as states such asVenezuela andLibya in Latin America and North Africa, all of whom are members ofOPEC .ibid] [Anderson, L., 1987, The State in the Middle East North Africa, "Comparative Politics", Volume 20, Issue 1, Pages 1-18] Rentier state theory has been one of several advanced to explain the predominance of authoritarian regimes in the Middle East and the apparent lack of success of democracy in the region. [Smith, B., 2004, Oil Wealth & Regime Survival in the Developing World: 1960-1999, "American Journal of Political Science", Volume 48, Issue 2, Pages 232-246 ] While many statesexport resources or license their development by foreign parties, rentier states are characterized by the relative absence ofrevenue from domestictaxation , as their naturally occurring wealth precludes the need to extract income from their citizenry. According toDouglas Yates (cited [http://www.semp.us/biots/biot_227.html here] ), the economic behavior of a rentier stateembodies a break in the work-reward causation ... [r] ewards of income and wealth for the rentier do not come as the result of work but rather are the result of chance or situation.
Hazem Beblawi has argued that this could create a “rentier mentality,”ibid, p.88] while political scientistFareed Zakaria has posited that such states fail to develop politically because, in the absence of taxes, citizens have less incentive to place pressure on the government to become responsive to their needs. Instead, the government essentially 'bribes' the citizenry with extensivesocial welfare programs, becoming an allocation or distributive state. The budget, in effect, is little more that an expenditure programme.ibid, p.90] Moreover, because control of the rent-producing resources is concentrated in the hands of the authorities, it may be used to alternately coerce or coopt their populace, while the distinction between public service and private interest becomes increasingly blurred.ibid, p.91] There is, in the words ofNoah Feldman in his book "After Jihad",no fiscal connection between the government and the people. The government has only to keep its people in line so that they do not overthrow it and start collecting the oil rents themselves. (Feldman 139) [Feldman, N., 2003, "After Jihad: America and the Struggle for Islamic Democracy", New York, Farrar, Straus and Giroux ]
Consequently in these resource-rich rentier states there is a challenge to developing
civil society anddemocratization . Hence, theorists such as Beblawi conclude that the nature of rentier states provides a particular explanation for the presence of authoritarian regimes in such resource rich states.Beblawi, H., 1990, The Rentier State in the Arab World, in Luciani, G., "The Arab State", London, Routledge ]Beblawi identifies several other characteristics particularly associated with “rentier” oil states. For example, where the government is the largest and ultimate employer, the bureaucracy is frequently bloated and inefficient – and indeed comes to resemble a “rentier class” in society. Moreover, local laws often make it impossible for foreign companies to operate independently. This leads to a situation where citizenship becomes a financial asset. In order to do business, foreign enterprises engage a local “sponsor” (al-kafil) who allows the company to trade in his name in return for a proportion of the proceeds – another type of rent. In addition, the oil “rent” leads to “secondary” rents, usually stock market or real estate speculation.ibid, p.92]
The crucial nature of oil has led to a situation where non-oil states have started to behave like rentier states. This can be seen for the region as a whole – so some states have been able to exploit “location rent” due to their strategic location, for example for military bases. More significantly, inter-state relations in the region have been affected as oil states try to ensure stability and tranquillity for their rent by buying allegiance from neighbouring states – in effect, sharing the oil rent. Beblawi highlights the case of Egypt whose receipt of financial aid from oil rich neighbours declined significantly after Camp David, and money going instead to Iraq, Syria and the PLO who were considered more “assertive”.ibid, p.96]
ee also
*
Resource curse
*Rent-seeking
*Rentier capitalism References
External links
* [http://www.semp.us/biots/biot_227.html What is a Rentier State?]
* [http://www.sgir.org/conference2004/papers/Schwarz%20-%20State%20formation%20in%20Rentier%20States.pdf State Formation Processes in Rentier States: The Middle Eastern Case]
* [http://baltimorechronicle.com/2006/090607HICKMAN.html Rentier States and Democratization]
* [http://www.turkishweekly.net/comments.php?id=2878, Rentier State and Post Soviet Transition]
* [http://www.alternativesjournal.net/volume1/number1/akuru.htm The Rentier State Model and Central Asian Studies: The Turkmen Case]
* [http://www.fes.de//fes4/publikationen/tare_workshop.htm Dauderstädt, Michael: Dead Ends of Transition Rentier Economies and Protectorates]
* [http://www.turkishweekly.net/comments.php?id=2878 Rentier State and Post Soviet Transition]
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