Group-Based Political Mobilization in Bahrain and the Arab Gulf

Born of the newfound importance of oil-exporting nations in the 1970s and 1980s, the idea of the "rentier economy" arose in economics as a description of those countries that rely on substantial external rent, the latter defined broadly as a reward for ownership of natural resources, whether strategically located territory, mineral deposits, or, more to present purposes, oil or natural gas reserves. A special category of the rentier economy, a "rentier state," came to describe those economies in which only a few are engaged in the generation of this rent, the archetypal examples of which were, and remain, the oil- and gas-rich monarchies of the Arab Gulf. In rentier states, then, the creation and control over wealth is limited to a small minority of society, that is to say, to "the state," or, in the case of the Gulf regimes, to the ruling family qua state, while the vast majority of residents and citizens play the role either of distributor or consumer.

With such an extreme economic-cum-political imbalance thus written into the very definition of the rentier state, a significant portion of the rentier literature concerns itself with an inherent puzzle: how are these regimes seemingly so durable? That is, why do the citizens or residents of rentier states not simply confiscate the revenue-generating resources from their physical owners? The latter, after all, are hopelessly outnumbered. Yet, far from the gloomy predictions about the post-colonial fates of the Gulf monarchies, more than 40 years after the British withdrawal from its protectorates in 1971, the Arab Gulf states "continue to be ruled by the same families, sometimes the same individuals, under the same traditional forms and within virtually the same borders that had been engineered by the British political agents as they departed." And all this despite having seen three major regional conflicts, several oil crises, the rise and fall of Arab nationalism, the Iranian Revolution, the Arab Spring, and the threat of similar revolutionary episodes across the Gulf. What has enabled—continues to enable—these seemingly anachronistic regimes to survive?

A Hard Bargain: The Classical Origins of the Rentier State

Beginning with the earliest statements of the rentier state framework, theorists have posited that the resource-controlling parties within rentier states can, in short, buy off would-be domestic opponents through judicious economic policy. The form of such policy is at once positive (rent controllers offer citizens a portion of their wealth as public and private goods) and negative (they agree not to expropriate from citizens as they otherwise would like to). In practical terms, these avenues of mass co-optation correspond to two complementary mechanisms by which modern Gulf regimes are said to use their economic hegemony to elicit political acquiescence. First, they employ those who need employment; and, second, they abstain from levying taxes "on the basis," in Vandewalle's oft-repeated formulation, "of the reverse principle of no representation without taxation." Together these incentives foster a rent-induced consensus that "helps explain why the government of an oil-rich country ... can enjoy a degree of stability which is not explicable in terms of its domestic economic or political performance."

"Every citizen" of a rent-based economy, Beblawi insists, "has a legitimate aspiration to be a government employee; in most cases this aspiration is fulfilled." Judging by present public-sector employment rates in the Arab Gulf, it would seem that this idea is as valid today as it was decades ago. In 2009, the National Bank of Kuwait estimated that Gulf citizens working in the public sector "account for 58% of total GCC nationals employed," including 50 percent of Saudis, 84 percent of Kuwaitis, and almost 90 percent of Qataris." Among respondents in my 2009 Bahrain survey, around 43 percent report being employed in the public sector. These already vast proportions, moreover, are on the rise: public sector jobs in the GCC rose at an average of 5.2 percent per year during 2006 and 2007, with Qatar recording a spectacular 33 percent annual growth rate, followed by the UAE and Oman at 5 percent, Kuwait at 4.4 percent, Saudi Arabia at 2.9 percent, and Bahrain at 2.4 percent. More recently, bolstered social welfare spending in response to the Arab uprisings has only pushed these percentages higher. In Oman, for instance, private-sector employment among nationals decreased by 4 percent in 2011 over the previous year. In Kuwait, the number of nationals entering the public sector in 2011 almost doubled, prompting the country's finance minister to warn in March 2012 that public-sector wages now equaled 85 percent of oil royalties.

By establishing an entanglement of bloated government ministries, subsidizing large, state-owned conglomerates, and spending huge sums on disproportionately large and well-equipped militaries, Gulf regimes can sop up a young populace that is easily disaffected, eager to marry and find housing, and generally well educated yet nonetheless ill-equipped for work in the private sector. The upshot is that the latter will be content to live their days as government pensioners and social welfare recipients, careful not to kill the goose that lays the golden egg. For their part, ruling families gain a political ally—at worst a self-interest-maximizing, apolitical animal—and need forfeit only a portion of their rent proceeds to guarantee continued enjoyment of the remainder.

Yet the state's beneficence does not end there. At the same time that it subsidizes citizens via employment, it also agrees not to extract through taxation: the rentier gods both giveth and doth not take away. "The cry of the American Revolution," writes Gause "was 'no taxation without representation.' None of the Gulf governments seems willing to take the political risk that direct taxation entails." As Ayubi aptly summarizes,

The taxation function is thus reversed in the oil state: instead of the usual situation, where the state taxes the citizen in return for services, here the citizen taxes the state—by acquiring a government payment [i.e., a salary]—in return for staying quiet, for not invoking tribal rivalries and for not challenging the ruling family's position.

Here, then, is the ostensive political bargain that has allowed the unforeseen longevity of rentier states, and the Gulf monarchies in particular, since their rise to prominence over the last half-century: ordinary citizens are content to forfeit a role in decision making in exchange for a tax-free, resource-funded welfare state. By this conception, economic satisfaction is the primary variable influencing the...