INSTITUTIONALISM AND THE DYNAMICS OF RESOURCE-BASED DEVELOPMENT IN THE ARAB GULF STATES: AN EMPIRICAL ANALYSIS
Abstract
This study aimed to address a theoretical and practical issue in Gulf and Middle East studies, namely the dominance of the rentier paradigm in understanding the relationship between natural resource abundance and socio-economic development dynamics. This perspective has remained dominant despite two key factors: first, the extensive criticism directed to it over the past two decades by numerous scholars across various disciplines, questioning its explanatory and predictive power; and second, the significant advancements in development studies that address similar issues, without pushing rentier theorists to incorporate these advancements or keep up with them. Therefore, this thesis tried to promote a different perspective for examining the socio-economic development dynamics in the Gulf States and similar resource-dependent countries, namely the institutional perspective. To do this, the study had two main goals: first, to show how institutional factors can help overcome the "curses" predicted by the rentier perspective, particularly in its socioeconomic dimensions; and second, to demonstrate the explanatory power of the institutional perspective and use its tools to reinterpret development dynamics in the Gulf. Thus, the two main questions of this study were: To what extent is the institutional quality of Arab Gulf states associated with their level of socioeconomic development? And to what extent can the institutional quality of oil and gas dependent countries enable them to avoid the economic and social effects of the resource curse? These two questions were addressed through two empirical studies. The first study focused on a sample of oil and gas dependent countries, covering the period from 2012 to 2019, and employed cross-sectional analysis. It tested the institutional hypothesis by using the six world governance indicators as proxies for institutional quality and independent variables, while socio-economic development indicators such as GDP per capita, the Human Development Index (HDI), the Sustainable Development Index (SDI), progress in the Sustainable Development Goals (SDGs), and the Economic Complexity Index (ECI) were used as dependent variables. The second study focused on a sample of the six Arab Gulf states, using data from 2002 to 2019, and applied panel regression techniques. The institutional hypothesis was tested also with the six governance indicators as independent variables and GDP per capita as the dependent variable. Six models were analyzed, each representing a different dimension of institutional quality. As for the findings, both empirical studies, across both samples, confirmed that in resource-dependent countries, such as those reliant on oil and gas, the mere presence of these resources does not inherently constitute a "curse" at the socio-economic level. Instead, the way in which the "rules" of the economic and political game are established is far more significant. In other words, institutions are key. Therefore, investing in improving institutional quality, particularly their inclusivity, serves as a direct investment in enhancing socioeconomic outcomes, enabling these countries to overcome the so-called resource curses proposed by the rentier paradigm. Having confirmed the explanatory power of the institutional perspective, the thesis concluded with a comparison between the frameworks of rentierism and institutionalism in the case study of the post-2014 oil crisis. The analysis revealed how the institutional perspective provided a different interpretation of the same event compared to rentier theorists, which further reinforcing the central argument of this thesis
DOI/handle
http://hdl.handle.net/10576/62731Collections
- Gulf Studies [68 items ]