Middle East Research and Information Project:

Is [Egypt's interim prime minister Hazem] Beblawi the answer? Intriguingly, one of his main claims to fame before July 9 was his scholarly publications, particularly those about the “rentier state.”

His chief argument is that excessive reliance on “rents” -- unearned state revenues -- makes governments bloated and unaccountable to the citizenry. Such governments are “rentier states.” Rents classically come from hydrocarbon deposits or other natural resources. But foreign aid, tourist dollars and the remittances of migrant workers are also rents. In the case of Egypt, so are tolls upon traffic in the Suez Canal. The key for Beblawi’s theory is that rentier states do not have to extract taxes from the people in order to pay the government’s bills. The rentier state, in fact, is flush enough to prop up living standards with handouts of varying generosity. The result is a dynamic of “no taxation, no representation.” Governments have fewer incentives to perform well; because they do not bankroll the state, citizens have less leverage in pushing for more rights or a greater say in public affairs. To put it another way, in the world according to Beblawi, rentier economies are no good at producing democracy. 

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