Wednesday, 21 March 2012

The Wealth is Not Enough

Acemoglu and Robinson have, on their blog, very kindly responded to the email I sent them.

However, I'm inclined to say that their purported explanation falls short of explaining the empirical puzzle presented.

They resort to what is effectively rentier state theory - resource rich countries can buy off their populations, other ones can't. Unfortunately, this theory has several gaps in it.

1. What about Morocco, Jordan, Bhutan, Swaziland?

These aren't resource rich countries. (current accounts in Morocco, Jordan, Bhutan, Swaziland, all of which hover at or below 0. Note that the recent spike in Bhutan is caused by the building of a large hydroelectric powerplant, the energy from which is mostly exported to India).

Resource wealth can explain Saudi Arabia and Bahrain handily, sure, but how compelling is it as an explanation for Oman? True, Oman has plenty of resource wealth -Oil and Gas exports approached 50% of GDP in 2008-, but its patterns of reform hardly match that of a King buying off his population with reform. Prior to the Arab Spring, the only major threat to Bin Said was the Dhofar rebellion, which began in 1965 under his father's reign. According to Joseph Kechinian, “Oman was not just experimenting with participatory government”, under Qaboos, but in fact it was choosing to “stay well ahead of changing circumstances.”[1] When you look carefully, Rentier State Theory can only explain about half of the puzzle.

Acemoglu and Robinson try to explain this away by saying "The genius of the regimes in Saudi Arabia, Qatar, and the United Arab Emirates has been to use their resources before there was much of a protest movement." which brings us to

2. Libya?
As Acemoglu and Robinson acknowledge, Libya is resource rich. But they say, it has chosen the path of repression, and therefore was doomed to fall. But wait- wasn't the question of whether a state chooses the path of repression or accommodation part of the very thing we were trying to explain in the first place? Why did Libya choose repression and not Qatar? Here the authors cite the UAE, and Saudi Arabia's 'genius' as the explanation for their pre-emptive appeasement. But if this is so, why were regional scholars as recently as 2006 saying things like "the U.A.E actually represents one of the purest autocracies in the world…second only to Saudi Arabia.”[2]

The enormous resources of the U.A.E. and Saudi Arabia is related to their continued preservation, surely- but it seems to me that the resources merely gave these countries the power to make few genuine concessions that threatened the monarchs' stranglehold on power. The same explanation cannot be true for Oman or Kuwait, where meaningful alternative's to the King's power exist. Moreover, that explanation clearly has no relevance in Jordan or Morocco, where resources are lacking. Expanding the sample outside of the Middle East ("Region only begs the question about the factors actually at work… region is merely a summary of factors that have taken on geographical form"[3]) demonstrates that other resource poor monarchies have also managed to survive - such as in Bhutan and also in Swaziland. Rentier State Theory cannot explain why.

Some of these questions I tried tackling, here (warning, this is another shameless plug of my thesis). The most striking snippet of information can be found on the simple table on page 26. Personally, I found most interesting the relationship between the timing of reforms and the age of the King.

[1] Joseph. A. Kechichian, Oman and the world, the emergence of an independent Foreign Policy, p54 (RAND, 1995)
[2] Christopher M. Davidson, ‘After Shaikh Zayed: The politics of Succession in Abu Dhabi and the UAE’ Middle East Policy, Volume 13(1), Spring 2006, p42
[3] Valerie Bunce, ‘Rethinking Recent Democratization, Lessons from the Postcommunist Experience’ World Politics 55(2) January 2003 pp 191-192

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