FROM ENERGY POVERTY TO ENERGY EXTREMISM 61Another theory, the one many still use to understand the region today,
focused on the unique style of development provided by oil riches. In a
1987 edited volume titled The Rentier State, the economists Hazem Beb-
lawi and Giacomo Luciani boldly declared that the massive transfer of
wealth to oil states had brought about a new form of state- society rela-
tions. These were not typical “productive” economies that collected taxes
from citizens and redistributed the proceeds in the form of services. The
Gulf monarchies were “allocative” economies— rentier states— where
the national treasury was funded by oil rents from overseas. Services
were provided, but there was no need to extract taxes to pay for them.
The gush of oil rents, particularly after the 1973 embargo and national-
ization, left the state in command of nearly all national wealth— wealth it
used to buy political support.
According to this new rentier theory, the exchange of welfare bene-
fits for political support was enshrined in an unwritten social contract
between state and society. As long as the populace received a generous
share of the oil proceeds, ruling would be left to the rulers. Avoiding tax-
ation was key. Taxes were well understood as a bedrock element of democ-
racy. Societies that paid taxes tended to maintain an interest in how their
contributions are spent. Taxes thus created an accountability link between
governments and taxpayers, constraining the autonomy of governing
authorities.^27
Democracy failed to gain traction in rentier states because autocrats
wielded rent streams to block it. Governance grew more centralized and
autocratic.^28 Groups that held political power in the pre- oil past, such as
merchants and rival tribes, saw their political functions relinquished in
return for a share of the wealth.^29 Oil rents quashed the few tenuous
advances toward democracy and funded the complex distributive wel-
fare states of today.^30
Compared with the ethical contortions of political culture, rentier-
ism offered refreshing simplicity. Support for autocracy was based on
citizens’ economic self- interest. The welfare states of the Gulf became the
envy of the developing world. People whose ancestors had scraped by
through the millennia found their lifespans extended by decades. They
were showered with modern comforts: air- conditioned homes, paved