The Dangers of Rentierism

While renting has brought tremendous amounts of wealth into the pockets of Middle Eastern and North African countries, it poses significant threats towards equality and democracy becoming a norm in the region. The relationship between rents and the lack of democracies is obviously not just down to the oil itself. Something that comes from the ground cannot be at fault for suppressing human rights. However, it is the astronomical quantity of money which brings corruption and nondemocratic practices that can, and should take the blame. Money helps prevent democracy, and can be a powerful engine to prevent change in countries.

When the money collected from natural resources goes straight into the hands of those in power, they have no true incentive to pass it onto their people. The lack of accountability of elected or traditional leaders gives the populace no reason to expect anything from them. If money circulated not just back to the pockets of the citizens, but at least to something which would have visible benefits, political efficacy might increase. However, since that is not the case, the state has no need for the taxes of its citizens due to the rent profits, creating a near meaningless relationship between the two besides the necessity for labor. Rather than developing and nurturing a positive and symbiotic exchange, rentier states and their leaders have only sought to line their pockets more, and by doing so, preserving their own power. While the size of the rents is not by any means insignificant to how countries proceed with regards to democracy, the influx of money into the political system is the main reason behind the absence of democracy.

The power behind oil money is not restricted to the Middle East and North Africa, which shows that it not simply just the scale of the rents. Rather, it is the money which are synonymous with those rents combined with the opaqueness of MENA governments which has stifled progress. The money keeps change at bay, stunting the ability of the people to get involved, since there is no benefit to them trying. The cyclical nature of maintaining power by spending the oil money from the rents to do so without nearly any of it going back to help the people. The low tax rates combined with a general low interest in involving the people results in the same leaders staying in charge without any popular oversight, which is part and parcel to a democracy.

Rather than reinforcing the idea of a resource curse, what needs to be examined is the structure of the government within the resource rich states. Resources cannot be immediately seen as a threat, but rather as a positive force for the improvement of a state’s population. The tremendous amounts of wealth hydrocarbons have can turn a countries’ fortunes around. Public education, infrastructure, and economic advancement all become more possible with the influx of money, but it lies on the government to ensure that happens.