62FROM ENERGY POVERTY TO ENERGY EXTREMISMroads, and modern medicine. They were better educated, healthier, and
wealthier. Who wouldn’t support rulers who brought such positive
change?
In the Gulf, cheap energy became part of the rentier playbook for
fending off democratic pressure. Subsidies also came about for another
reason. They are easy. Rentier states like those in the Gulf do not have
strong administrative tools to operate complex social policies. Countries
that do not tax their citizens lack the means to collect income data. They
cannot easily divide society into those who need government help and
those who don’t. Taxation creates institutional depth, that is, a knowl-
edge of society that allows for equitable redistribution. Rentier states for-
feit this capacity. In these countries, subsidies are pervasive because there
are few other mechanisms for governments to spread the largesse.^31
Early rentierism turned out to be enormously successful. For the most
part, ruling families enjoyed genuine legitimacy. But once the govern-
ing institutions of the rentier state were established, they proved hard
to change. Where one generation was grateful for the state’s antipoverty
benefits, the next claimed them as entitlements. As people grew wealthy,
they no longer needed subsidized gasoline or electricity. But the state
kept providing energy benefits and much more besides. Once the prec-
edent was established, the governance bargain seemed to dictate that
these benefits were sacrosanct. Subsidies, ruling families learned, are
sticky: easy to hand out, much tougher to retract.
Something similar took place in the academic realm. Rentier theo-
ry’s explanatory power obscured a fundamental flaw. Subsidizing energy
would ignite demand to such an extent that rent- based politics would
compete with the rent- based economy for the same resources.