The Legitimacy of Rentier States

Unlike in an interventionist state, in a rentier state the government relies on substantial external rent (from outside of the state) to sustain the economy and lacks a strong productive domestic center. In the MENA region in many cases, this means that the government of a state will have the money that they make from oil equal to 90/95% of their budget revenue. This fosters an environment where citizens of a state aren’t as involved as what happens in their state’s politics because it isn’t their money that is being utilized by the government, further widening the disconnect between a state and its citizens. Another typical quality of a rentier state is that the government of the state is the principal recipient of the external rent and therefor creates a major wealth disparity between the government, and the people. The majority of the people in the state aren’t directly involved with the money that is being made from oil and are only involved with distributing it or utilizing it, creating more levels of disconnect and also fosters a sense lack of legitimacy in the government.

Rentier States

In most rentier states, there is a large disconnect between the citizens and those in power. Because the rent a state collects is usually used to provide privileges to the political elite in exchange for loyalty to the state, the priorities of the ruling elite are always superior to the priorities of the citizens. Furthermore, the rewards handed out by those in power are not given to citizens based on their merit or performance, but on perceived loyalty to the state and to those in power. This does not provide any incentives or rewards to citizens who work to benefit the state, so the motivation for citizens to respect and support those in power is low, if not nonexistent. By ignoring the citizens within the state, the people in power create a considerable divide between themselves and the citizens within the state. 

For example, if we look at Jordan, considered a non-oil-exporting rentier state, the state has a weak tax system, and the distribution of foreign aid lies solely in the hands of the royal family, so the political elite reap most of the benefits of this aid while the citizens do not benefit at all. And even when the money does go back into helping society as a whole, the services and systems created for the citizens within the state are low quality and under-funded. So logically, this disconnect between those in power (the political elite) and the citizens would delegitimize the authority within the rentier state as seen through the eyes of its citizens, because the governments' decisions are not made with the interests of all citizens in mind, but are politically motivated and based on loyalty to the state. 

Rentier States

A rentier state is less legitimate in the eyes of its populous because the rentier economy hurts  political participation by increasing the disconnect between a state and its citizens. Since only a few control the resources, it leaves the majority of the population with no direct participation in the production, sale, or export of the resource collecting rent. For example, Hazem Beblawi includes the statistic that an average oil producing rentier state's oil revenue represents 90% of budget revenue. It also represents 95% exports. However, only 2% to 3%  of the labor force is engaged in production and distribution of this oil wealth.

Because most of the income is centralized in the production and exportation of a concise resource, there are virtually no taxes imposed on the people of a rentier state. Virtually no taxes mean that citizens are less demanding in terms of political participation. Nationals take on a rentier mentality, which is a breakup of the tradition social contract between the state and its people; a contract that the state will give the people aid and benefits in exchange for their consent. Without this social bond, there is a huge lack of accountability and connection between the few in charge of the government and resources and the rest of the population. This increases the oligarchy or hierarchy and decreases political legitimacy and participation.

This can be seen in Saudi Arabia where 80% of the budget revenue and 40% of GDP comes from exportation. This rentier economy is controlled by the monarchy. The monarchy then uses its funds from the oil to buy tribal loyalty. However, this system has its limits. For example, Roger Owen argues that such systems produce the King's Dilemma, which is a lack of modernization and diversification of the economy. Since rentier economies are not forced to be self sustaining due to foreign cash flow, there is no incentive for economic diversification. This keeps the economy static and increases unemployment rates which further increases disconnect and dissent.

Rentier States

In the eyes of its citizens, a rentier state is probably less legitimate since it relies on foreign income and aid. A rentier state is not able to stand alone. A rentier economy most likely hurts the problem of disconnect between the state and the citizens. Since the government has an elite who control the income, the citizens are less in their eyes. There is a hierarchy within the government creating an obvious and direct divide between the state and the citizens. Citizens are not taxed in rentier states. This, again, creates a chasm between the state, which whom pays the taxes, and the citizens, who lower their demand for political participation. With lower demand for political participation, the elite can control with the government for a longer time. According to Charles Tilly, the state is essentially a protection racket. Imagining the state as a protection item, it is inferable to me that the state has more power than the citizens do. With all of these aspects of rentier states, the relationship between the state and all of its citizens is usually a negative, unequal one. Reliance on other countries as a way of aid and revenue, makes a country less legitamate in the eyes of it's citizens.  

Non-Violent Social Movements

As you know by now, 'non-violent' struggle is not about sitting around in circles singing Kumbaya. Quite the contrary, it's a highly strategic enterprise that usually entails significant risks to personal safety for those who take part. Zunes gives several examples of non-violent struggle in the MENA region while Dajani discusses the effectiveness of non-violent resistance in the first Palestinian Intifada. As we know twenty-five years later, the Intifada didn't lead to a resolution of the conflict. What did it achieve, if anything? What impact did it have on both the Palestinian and Israeli societies?

Rentier States and Legitimacy

Thus far, we have talked about the big interventionist state, which is simultaneously quite weak in legitimacy. Do you think a rentier state is more or less legitimate in the eyes of its citizens? In other words, does a rentier economy help or hurt the problem of a disconnect between state and citizens? Provide a clear rationale for your argument.

The Washington Consensus

The "Washington Consensus" is a set of ten economic policy prescriptions targeted at developing economies and countries. It focuses on a switch to a free-market system by providing aid packages. The hope is that this aid will help countries get on their feet and privatize. This move to privatize and develop is also seen as a push for these nations to "modernize."

There are many fundamental positive expectations of the consensus. The hope is that through aid and stimulus, the economies will grow. This growth in economy theoretically will help with job creation to battle severe unemployment. As unemployment increases, it is expected that standards of living will rise as well. Poverty, as a result, will hopefully be reduced.

Many MENA states have been reluctant to the Washington Consensus. It is seen as power move by Western nations to "modernize" the region, which is a mindset that can be considered a second wave of colonialism. Western nations and institutions, such as the World Bank or IMF, assert control by attaching strings to aid. These include the implementation of certain infrastructure or requirements on health goals. By making aid conditional to Western values, MENA states are left suspicious and hesitant.

There are many counterproductive effects to this plan. For one, it has been known to lead to destabilization of local economies since the change is not organic. In order to achieve that goals, the change must come from local development and not from top-down mandates. Also, the plan leaves the countries open to foreign exploitation. Like what we saw in the documentary about the Zaballeen in Cairo, foreign companies are contracted to provide services so that a country can meet the conditional requirements for aid. But by contracting internationally, the local economy is not growing.