Rentier States
A rentier state is a country that derives a substantial portion of its national revenues from the renting of land, natural resources, or other assets. The term was first used to describe certain Latin American countries that depended on the sale of land or minerals to foreign investors. Today, the term is often used to describe oil-rich Gulf states like Kuwait and Qatar, which use their petroleum resources to generate large amounts of revenue (Beblawi, 2015). While rentier states can enjoy high levels of prosperity, they also tend to be highly dependent on foreigners and vulnerable to economic fluctuations. As a result, many scholars have critical of rentier state theory, arguing that it fails to take into account the unique political and economic dynamics of these countries.
A few examples of resource-rich countries that can be classified as rentier-states include Venezuela, Angola, and Iraq. These countries all have weak institutions and are highly reliant on oil exports to fund their governments. Additionally, they have all experienced periods of political instability and violence in recent years. While not all resource-rich countries are rentier-states, those that are often struggle to provide for their citizens and provide stability (Mahdavi, 1970).
In recent years, a great deal of attention has been paid to the so-called resource curse, the phenomenon whereby countries with an abundance of natural resources tend to be less economically successful than those without. A key factor in this is the fact that resource-rich rentier states are often governed by elites who have little incentive to invest in the long-term development of their countries. Instead, they often siphon off resources for their own personal gain, leading to stagnation and poverty. In addition, resource-rich countries often face instability and conflict, as competing factions vie for control of the lucrative resources. As a result, it is clear that resource-rich rentier states are not necessarily able to achieve economic growth and development.
References
Beblawi, H. (2015). The rentier state in the Arab world. InThe Arab State(pp. 85-98).
Routledge.
Mahdavy, H. (1970). The patterns and problems of economic development in rentier
states: the case of Iran.Studies in the economic history of the Middle East,428, 67.
