Does oil hinder democratic reform?

By Rebwar Rawf Salih:

The crux of this question is in the theory of the ‘rentier state’. Democratisation has to be distinguished from political liberalisation; the former refers to the openness of the political system to more actors or groups, but the latter refers to the provision of rights, which are usually given by governments and can be taken back by the political elite. This article focuses mainly on the connection between oil and democratisation. It also explains the idea of ‘rentierism’. Why do rentier states develop in terms of economic and social structure but not political structure? Most of the studies explain and support the argument that says ‘oil does hinder democratic reform!’. They provide different mechanisms and theories in their arguments, they also provide some important factors that prevent democracy in rentier sates. According to those augments there are two main factors: ‘internal factors’ and ‘external factors’. To understand this, we focus on the Gulf monarchies such as Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE), because they are the most dependent on oil resources.

Michael Halliday believes that exploitation in the Gulf region will inevitably lead to some kind of social conflict and eventually political change. Samuel Huntington also has same expectations about the Gulf rentier states as he believes that social mobilization could happen in the Gulf region sooner than later. It has to be mentioned that the main reason that makes these writers and authors predict instability in the region is the lack of democracy and also the lack of any attempts at democratic reform. The Gulf countries can be seen as a bunch of similar countries, but they are also very different, because they have different population sizes, different stores of oil and gas, and different abilities from the rulers to access their rent and distribute it on to their people.

What are the characteristics of rentier states? Is oil wealth a curse or a blessing? How can the rulers of the Gulf States stay in power without political reform? What are the mechanisms, factors and causes that prevent achieving democracy in the region? Does natural resources wealth always goes together with autocracy, or is this only under certain conditions?

According to Giacomo Lucianni, in rentier states oil has a direct influence on domestic politics and democratic reform, it helps ruling elites to resist local challenges. Some states, especially the monarchical states in the Middle East, “would probably not have survived the twenty-first century without oil”. He also emphasises that “the most important feature of the rentier state is that of being financially independent of society; state does not need to seek legitimacy through democratic representation, so these states paradigm has become most popular through several of the well-known sayings such as ‘no taxation without representation’ into its mirror image ‘no representation without taxation’”. So, for him, rents in rentier states create an environment in which rulers can practice authoritarian regimes. In this case, oil has a negative impact on democracy. Other writers, such as Michael Ross, Christopher Davidson, Haber and Menaldo also have their own arguments about rentier states. For instance, Ross says that some political scientists believe that, as incomes rise, governments normally tend to become more democratic. But, “some scholars imply that there is an exception to this rule: if rising incomes can be traced to a country’s oil wealth, they suggest, this democratizing effect will shrink or disappear”, this means that oil and other minerals that increase rulers wealth, may hinder democratic reform and the state could become less democratic.

The Gulf monarchies have adopted some sort of capitalist production, therefore they have made a type of proletariat which has never been interested in overthrowing the class above. Davidson mentions the article of Hazem Beblawi 1987; according to this “the rentier state in the Arab world, especially the Gulf monarchies have drawn on Marx’s view on class formation, Beblawi claims that a rentier state is one in which only a few engage in the generation of wealth with the majority being only involved in the distribution or utilisation of it”. This means that the indigenous population have been used as a simplistic explanation for the durability of traditional political systems; therefore, the rulers do not allow the lower classes to have their voice heard politically or democratically. This obviously leads to corruption and a lack of transparency. Haber and Menaldo are two writers who also believe that oil hinders democratic reform, and disables citizens from practising their political rights. To support their arguments they provide Mahdavy’s point of view about the rentier state. They write:

“A substantial political economy literature argues that economic and fiscal reliance on petroleum, natural gas and minerals helps create and perpetuate authoritarian regimes. The genesis of this idea can be found in Mahdavy (1970), who noted that petroleum revenues in the Middle Eastern countries constituted an external resource of rent directly captured by governments, thereby rendering them unaccountable to citizens”

Theoretically, these writers try to explain the causes that make difficulties for a democratic process to be practised by lower actors in rentier states. Some of their theories predict future social change in rentier states, because of a lack of democracy and political participation. Davidson supports his argument by explaining the theory of modernization which is emphasized by Samuel Huntington (1968), under the title of ‘Political Order in Changing Societies’. “Huntington argues that incumbent regimes resist strongly, often by developing short-term containment strategies and possibly by resorting to violence. Nevertheless, he still subscribes to the inevitability of new and modern social groupings that eventually dispense with traditional polities”. Ross agrees with this argument, he thinks that wealth in rentier states has negative impacts on democracy; he classifies the impacts into three possible effects: firstly the ‘rentier effect’, secondly the ‘repression effect’ and finally the ‘modernization effect’. According to Ross, “a rentier effect suggests that resource-rich governments use low tax rates and patronage to relieve pressure for greater accountability; a repression effect argues that resource wealth retards democratization by enabling governments to boost their funding for internal security; and finally a modernization effect holds that growth based on the export of oil and minerals fail to bring about the social and cultural changes that tend to produce democratic governments”. Oil and other mineral wealth prevents democracy and makes states less democratic in undeveloped countries such as the Middle Eastern countries, especially the Gulf monarchies. More or less, Herb provides same sort of theoretical arguments; he argues that the absence of tax, the buying off of the opposition and the repercussion of wealth on society, are the main reasons for having authoritarian regimes, these regimes have no desire for political or democratic reform. Herb states:

“First, the state may be virtually completely autonomous from society, winning popular acquiescence through distribution rather than support through taxation and representation. Second, rentierism increases the capacity of the state to both buy off and to repress oppositions. These two mechanisms, together, often are thought to produce a ‘rentier social contract’ in which the state provides goods and services to society, while society provides state officials with a degree of autonomy in decision-making. Third, oil revenues change the class structure of society. Democracy is stymied when oil revenues prevent changes in class structure that usually lead to democracy.”

Despite having these theoretical studies, there are also some studies which point out how oil produces some factors that stop democracy in rentier states. Most of those factors pointed out by Ross and Luciani. Ross’s main factor is that “oil wealth provides the Middle East governments with budgets that are exceptionally large and unconstrained; rulers in the region may follow the same tactics as their authoritarian counterparts elsewhere”. He also mentions that these governments disallow any group formations in societies, especially if the purposes of forming these groups are to request increased political rights. Because, when oil revenues provide a government with enough money, the government will use its largesse to prevent the formation of social groups that are independents from the state and hence that may inclined to demand political rights.

Another factor is military force. The large wealth in the rentier states helps regimes have a greater demand or interest in protecting themselves against any internal popular pressure, especially because resource wealth would easily lead to ethnic or religious conflict within these states. “There are two reasons to explain why resource wealth might lead to larger military forces. First, is pure self-interest: given the opportunity to better arm itself against popular pressure, and an authoritarian government will readily do so. A second reason is that resource wealth causes ethnic or regional conflict; a larger military might reflect the government’s response”. Therefore, it is difficult to hope for democratic reform or political participation when a state works against group formation, and empowers itself militarily for authoritarianism. There are also some factors that have been mentioned In Luciani’s writing, such as good relationships between rentier states and the developed or the Western states. These relations reduce external pressures. The Western states are interested in stability in the region because of their interest, and sometimes they have a good relationship even with the dictators in the region. Luciani says “Oil is a very important factor in the international relations of the Middle Eastern states, both with respect to regional or inter-Arab relations, and with respect to international relations at large. The best example was the flirting with Saddam Hussein’s regime for oil concession after lifting of the UN oil embargo”. Other factors that have been pointed out by Ross are religious and cultural ones. Most of the population in the Gulf countries are Muslim, and there is an argument that Muslim people do not have a great desire for democracy, and most feel naturally against democratizing their region as they think that religion and democracy could not work side by side. Also, most do not want their traditional regimes to attempt any historical or cultural change in the region by implementing democracy; Ross states:

“Previous studies have suggested that states with large Muslim populations tend to be less democratic than non-Muslim states.”

In contrast, there are studies that have different views about oil; whether oil is a curse or a blessing. Those studies do not always believe that oil is a resource that has a negative impact on a regime type or on society. Herb thinks that oil in richer countries such as Jamaica, Lithuania, the Netherlands and Norway have had a positive impact in providing services and welfare, and it does not harm democracy: “In richer rentier states, rents create a larger middle class, pay for schoolteachers, increase per capita GDP, and drive up other measures of development”.

Most of the oil-rich authoritarian regimes are in the Middle East, but the only cause for having authoritarian regimes in the Middle East is not oil, because these countries have always had authoritarian regimes, since they were established. The Middle East is nevertheless a difficult place to test the claim of negative impact of oil, because these oil-rich Mideast governments have been highly authoritarian since gaining independence”. Haber and Menaldo provide some sort of theoretical formula to test whether oil is a curse or a blessing, to do this and ease their argument they talk about John Dunning’s ‘advanced theory’ as follow:

“Dunning 2008 Dunning advances a theory about resource curses, he thinks that it is conditional on the distribution of income, in countries where income is unequally distributed there is a resource blessing, but in countries where income is more equally distributed there is a resource curse”.

In conclusion, based on the evidence cited in this writing, it can be said that oil has a great role politically in the Middle Eastern countries, especially the monarchical states. Most of the studies insist that oil wealth is a curse and creates authoritarian regimes. Those regimes use their large budgets in the military spending and they do not tolerate or allow any type of group formation which is not loyal to their regimes. Societies in the rentier states are free from taxation, this means they do not have representation; therefore only a particular elite rules the state and whatever belongs to the state belongs to them at the same time. Studies say that another reason is that the people of the rentier states in the Middle East are very religious and do not want to become democratic. It has been explained theoretically how oil could hinder democratic reform. Also some factors have been mentioned; depending on those theories and factors there are negative relationships between oil and democracy. But, on the other hand, there are a number of scholars which think that there is not any relationship between oil and authoritarian regimes; they believe that oil does not affect democracy negatively everywhere. Some studies say that certain rentier states were authoritarian even before they became rich from oil resources. Writers who support this argument think there is no association between an increase in resource reliance and authoritarianism. In fact, in many specifications they generate results that suggest a resource blessing.


Davidson, CH. 2012. After the Shaykhs: The Coming Collapse of the Gulf Monarchies. London: C. Hurst and Co.

Haber, S. And Menaldo, V. 2011. “Do Natural Resources Fuel Authoritarianism? A Reappraisal of the Resource Curse,” American Political Science Review. 105: 1, pp. 1-26.

Herb, M. 2005. “No Representation without Taxation? Rent, Development, and Democracy,” Comparative Politics, 37 (3): 297-316.

Luciani, G. 2004. “Oil and Political Economy in the International Relations of the Middle East”. In Fawcett. L. (ed) International Relations of the Middle East. PP 81- 103. Oxford: Oxford University Press.

Ross, M. 2001. “Does oil hinder democracy?”. World Politics, Vol. 53, No. 3, pp. 325-361. Cambridge University Press.

Ross, M. 2012. The Oil Curse: How Petroleum wealth Shapes the Developments of Nations. Princeton University Press. Chapter ‘More Petroleum, Less Democracy’.

Christopher Devison lecture at the LSE. After the Arab Spring: the Gulf in the Age of Uncertainty,

Rebwar Rawf Salih is from Kalar (Kurdistan) and was a political activist in the 1990s. Currently, he is studying Global Politics and International Relations at the University of London.



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