RENTIER STATE THEORY

Rentier State Theory

Rentier State Theory Reflection Paper

Introduction

Rents have been defined as “the income derived from the gift of nature” and are thus usually understood to be income accrued from the export of natural resources, especially oil and gas. Furthermore, external rents may also be conceived of as bilateral or multilateral foreign-aid payments, such as foreign development assistance or military assistance, which are termed 'strategic rents'. The rentier effect in the Arab world concerns both oil-exporting states and non-oil exporting states. A significant extent of the rents of the oil states has been recycled to all Arab states through migrant workers' remittances, transit fees and aid (Wendt, 2003).

A rentier economy is one in which the rent situation predominates, an economy dependent on external rent. The economy of Gabon has been dependent in two different senses of the term. In the first sense, it has been a dependency of France, a neocolonial enclave of enduring French interests. This has been a kind of post-imperial imperialism, or what has been called a "dominance-dependence relationship." The second kind of dependence has been on its primary production industries. This kind of dependence refers to the massive influence wielded by export revenues on the national income and public finance of Gabon, particularly from the petroleum sector. In this latter sense the Gabonese economy has often been called "oil-dependent." This chapter will describe the variety of means that France has employed to control the Gabonese economy. It will also summarize the history of the Gabonese oil industry in order to show how oil-rent came to dominate the national economy.

Discussion and Analysis

This common rentier effect emerged in the 1970s through the establishment of an implicit social contract, the state used its economic resources (oil revenues, strategic rents, developmental aid; not taxation) to offer benefits such as jobs, free education, and subsidies to its citizens in exchange for political acquiescence. It was based on an inverse logic of the dictum of the American Revolution 'no representation, no taxation'. As long as the state did not need to tax its people (due to alternative revenues in the form of rents), demands for representation were deemed not legitimate to be voiced. Political legitimacy was rooted in material legitimacy and the state's ability to meet its welfare commitments.

The functioning of this rentier model of statehood depended obviously on sufficient resources in the hand of the state. ...