The Rise and Fall of Oil-Rentier States in Africa

Abstract

This chapter is concerned with African ‘rentier states’, a category first coined by an Iranian economist Hossein Mahdavy (1970), writing about the problems of oil dependency in Iran. His theory was successfully applied by other scholars working on Arab countries (e.g., Beblawi and Luciani, 1987), Sub-Saharan Africa (e.g., Yates, 1996; Omeje, 2008; Watts, 2008), and then Latin America (e.g., Buxton, 2008; Campodöcino, 2008). More than a simple pejorative, this classification refers to a complex of associated ideas concerning negative developmental patterns in economies dominated by external rent, particularly oil rent, in the developing world. The rise and fall of these states is more than just another boom-and-bust cycle of resource dependency. Instead of cultivating an ethic of hard work, oil rentiers follow an easy path to quick riches, spending money which they have not earned. The more eagerly they spend their unearned oil revenues striving to reach development, the farther they recede from it. Like those men described by Seneca who desire to live happily, but whose minds are blinded to a clear vision of just what it is that makes life happy: ‘The more eagerly a man strives to reach it, the farther he recedes from it if he has made a mistake in the road; for when it leads in the opposite direction, his very speed will increase the distance that separates him’ (Seneca, 2006: 99).