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A look at Rentier states

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Charles B.
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  1. Introduction
  2. Rentier and semi rentier states
  3. Unsustainable rentierism: The case of Jordan
    1. Loyalty to the Hashemite monarchy
    2. The political development of Jordan
    3. The reason why Jordan made drastic changes
  4. Bahrain: Oil and foresight
    1. The al-Khalifa family
    2. An ideological commitment to the market
    3. Economic and political reform in Bahrain
  5. Conclusion

When I think of rentier states I am reminded of a time in the early 1970s with Richard Nixon invited Johnny Cash to the White House, provided that the sing the right-wing satire, ?Welfare Cadillac.? Claiming he did not know the words, Cash instead sang the ?Ballad of Ira Hayes,? about an American Indian who starved because the government never paid his veteran benefits. This brief anecdote illustrates the attempts President Nixon made (but failed to complete) in undoing Lyndon Johnson's creation of the American welfare state. Significantly?if ironically?it also illustrates the differences between rent and non-rent mentalities. In a rent mentality, the ultimate receivers of the rent do very little to earn their benefits: more importantly the rents buy the loyalty of the beneficiary. Thus, just as Guy Drake's protagonist supports Johnson, a rent beneficiary supports the rent distributor.

[...] Bahrain, with the luxury of foresight, has taken a more gradual route, weaning rather than abrogating, its rentier state. In any case, both of these examples show that the rentier state is not a useful hermeneutic for the Arab state, unless one views it in transition to a neo-liberal political economy. Like Johnny Cash, the Arab state is forgetting the lyrics to ?Welfare Cadillac? and singing the ?Ballad of Ira Hayes? instead. Noland and Pack 26. Beblawi 52. Ibid. 51-52. [...]


[...] For example, revenues from these semi-rents formed of Syria's government expenditure in 1980 and formed of the GDP.[6] It would thus be wrong-headed to confine the discussion of rentier states in the Arab world only to oil producers, for non-oil producing governments have operated in much the same way. Unsustainable Rentierism: The Case of Jordan[7] Throughout the 1970s and into the 1980s, Jordan benefited both from foreign worker remittances and from Arab and Western foreign aid in order to finance an import substitution economy: the government funded high-risk industries that made products Jordan would otherwise have needed to import. [...]


[...] The Jordanian government's behavior during the 1970s and 1980s bears all the aspects of a rentier?or at least semi-rentier?state and would thus appear to indicate that this is a good hermeneutic for analyzing Arab politics. However, the political development of Jordan took a drastic change beginning in the late 1980s. Between 1981 and 1987 foreign aid and grants dropped from one third of state expenditures to less than one sixth. Aid and remittances, which had formed nearly two-thirds of GDP in 1980 sharply dropped to around 30% of the same by 1988. [...]

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