Rentier state

In political science and international relations theory, a rentier state is a state which derives all or a substantial portion of its national revenues from the rent of indigenous resources to external clients. This theory was first postulated by Hossein Mahdavy in 1970. It was also in this article that the concept of external rent was first introduced.

Mahdavy's usage of the term is in stark contrast to how the term was originally used by Marxists. Lenin wrote in 1916: For that reason the term “rentier state” (Rentnerstaat), or usurer state, is coming into common use in the economic literature that deals with imperialism. The world has become divided into a handful of usurer states and a vast majority of debtor states. (...) According to the Great Soviet Encyclopedia, a rentier state enriches itself by exporting capital to other states, primarily those that are economically underdeveloped and dependent. This is better known in English as Rentier capitalism.

The term rentier state has been used since the 20th century. It is most frequently applied to states rich in highly valued natural resources such as petroleum but can also include states rich in financial instruments such as a reserve currency. It can also be applied to nations which trade on their strategic resources, such as an important military base.

Dependent upon it as a source of income, rentier states may generate rents externally by manipulating the global political and economic environment. Such manipulation may include monopolies, trading restrictions, and the solicitation of subsidies or aid in exchange for political influence or conversely the solicitation of loans in exchange for the reserve currency, e.g., the United States.

Hazem Al Beblawi and Giacomo Luciani suggested four characteristics of a rentier state:

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