| ID | 171899 |
| Title Proper | Can a rentier state evolve to a production state? An ‘institutional upgrading’ approach |
| Language | ENG |
| Author | Yamada, Makio |
| Summary / Abstract (Note) | Can a rentier state evolve to a production state? This article attempts to answer this question by analysing how historically states evolved to production states and by comparing their experience with today’s Gulf states. Although the Gulf states show some productive traits today, their mode of production largely remains ‘production with rentier characteristics’, that is reliant on oil-driven advantages. Their further economic diversification requires improved governance capabilities that enable their government to enhance human capital. Production states around the world acquired such governance capabilities through ‘institutional upgrading’, a replacement of clientelistic institutions with meritocratic ones. While clientelistic institutions tend to persist, such institutions were significantly reduced in these states through the exit of vested-interest players from major fiscal and organizational spaces. The exit appears to occur when these vested-interest players accept pain-sharing to ensure their protection in the context of the revealed vulnerability of their patron regime and when alternative productive gains are offered to them in lieu of conventional distribution. Presently neither condition is in existence in the Gulf states, which continue to be characterized by their direct and extensive distributional regimes. Without a prospect for immediate governance improvement, a realistic reform possibility lies in agency under institutional constraints. |
| `In' analytical Note | British Journal of Middle East Studies Vol. 47, No.1; Feb 2020: p.24-41 |
| Journal Source | British Journal of Middle East Studies Vol: 47 No 1 |
| Key Words | Economic Diversification ; Institutional Upgrading ; Saudi Petrochemical Industry |