Not long ago, before oil, Kuwait and Dubai shared much in common; both were small trading ports on the Gulf littoral, dependent on pearling and trade, and ruled by Arab families under British tutelage. Both had thriving merchant communities and an economy oriented toward trade and the sea. Today they are very different places. Dubai is an internationally famous entrepôt, tourist destination, and showplace for ostentatious architecture. Partly because of its relatively limited oil wealth, Dubai has led the United Arab Emirates (UAE) in diversifying its economy beyond oil, building a vibrant entrepôt economy that attracts foreign visitors and residents...

The most distinctive quality of the political economies of the Gulf rentiers is their extraordinary labor markets. In the extreme rentiers of the Gulf, the vast majority of citizens who work for a wage work in the public sector for high wages set largely by government edict. Foreigners work in the private sector (or sometimes in the public sector) for wages set by the market. These labor markets have profound political consequences, especially on the class politics of citizen society.¹

The three extreme rentier states of the Gulf—Kuwait, the UAE, and Qatar—have built elaborate welfare states that include...

Although the extreme rentiers of the Gulf share similar labor markets, Kuwaitis can hold their rulers accountable, while citizens of the other Gulf monarchies cannot. Even so, it is not universally conceded that the Kuwaiti parliament is qualitatively stronger than any other GCC parliament. In this chapter, I examine the constitutional structures of the monarchies to show what makes the political institutions of Kuwait different from those of the other Gulf monarchies.

Most models of democratization are derived from the experiences of republics rather than monarchies, and thus they usually do a poor job of capturing the dynamics of democratization...

Why is it that Kuwait has a powerful parliament, but the other Gulf monarchies do not? The best explanation is exogenous to Kuwaiti politics—the threat of Iraqi irredentism impelled the Kuwaiti ruling family to embrace popular representation at key junctures in the 1960s and 1990s. It is important to understand why Kuwait has a strong parliament.¹ In later chapters I argue that the Kuwaiti National Assembly causes a set of political and economic outcomes in Kuwait. If the Kuwaiti National Assembly causes things, it is useful to know what caused the National Assembly itself. I find that the causal...

What happens when absolutism is combined with extreme rentierism? The answer, in short, is that ruling families adopt policies that suit their own economic interests, interests defined by their status as the leading capitalists in their societies. In this chapter, I advance the following arguments:

In the absence of a strong parliament in the UAE, the ruling families become, at least potentially, the dominant local capitalists in their emirates. Ruling-family control of undeveloped land is a major source of wealth.

The ruling family of Dubai, as a result of its position within the federation and ownership of land,...

It is generally agreed that Kuwait has accomplished little by way of diversifying its economy. Although most observers trace this failure to the Kuwaiti political system, there is much less agreement on the specific ways in which the political system affects the economy. Thus in this chapter, I have two tasks: to show how the Kuwaiti political economy differs from that of the UAE (and the other Gulf monarchies) and also to show which aspects of the Kuwaiti political system are to blame for the lack of diversification. I open the chapter by setting out several explanations for the comparatively...

In this chapter, I discuss the implications of my argument for the literature on the resource curse and draw comparisons with rentiers outside the Gulf. In the next (and concluding) chapter, I discuss the economic and political future of the Gulf monarchies.

The literature on the resource curse predicts authoritarianism and the lack of economic growth. The literature boasts a large number of causal mechanisms that connect rents to these outcomes. Rents are thought to discourage democracy because of the autonomy of the rentier state, a rentier mentality among citizens, rentier social contracts, the dependency of the bourgeoisie, an absence...

In recent years Kuwait and the UAE have pursued contrasting models of political and economic development. In this book I have explained how the two countries, initially much more similar, have grown so different, and I have explored some of the consequences for their politics and their economies. In this chapter I look to the future, asking where these divergent paths are likely to lead and tracing out the likely consequences of these models for the other Gulf monarchies. I start with a discussion of the stability of these monarchies in light of the Arab Spring in order to provide...