Rentier state

In current political-science and international-relations theory, a rentier state (/ˈrɒntieɪ/ RON-tee-ay or /rɒ̃ˈtjeɪ/) is a state which derives all or a substantial portion of its national revenues from the rent paid by foreign individuals, concerns or governments.^[1]

The academic use of the term rentier states and rentier states theories (RST) became well known after the works of Hazem El Beblawi and Giacomo Luciani on the development of oil-rich countries, known as petrostates, in the Persian Gulf.^[2] They show that rentier states receive income without an increase in the productivity of the domestic economy or political development of the state, that is, the ability to tax citizens. The unequal distribution of external income in rentier states has thus a negative effect on political liberalism and economic development. With virtually no taxes citizens are less demanding and politically engaged and the income from rents negates the need for economic development.^[3]

Rentier state theories have now become a dominant frame of reference for studies of resource-dependent countries in the Gulf and wider Middle East and North African region,^[4] but are also used to analyse other forms of rentierism.