Source: Global Review, No.4, 2026

Abstract: Rentier state theory focuses on the link between resource rents and economic development, serving as a crucial framework for interpreting the underlying political-economic logic of oil-producing nations in the Middle East. The concept of “Gulf exceptionalism” marked a pivotal turning point in the evolution of rentier state theory, giving rise to the concept of “late-rentierism.” In this late-rentier era, economic diversification has become a shared development path for Gulf nations. Driven by fluctuations in international oil prices and the global energy transition, oil-producing nations—led by the Gulf states—are exhibiting new trends characterized by greater proactivity, globalization, and strategic foresight. These countries have adopted a multi-pronged approach to break away from traditional rentier economic models, enhance economic resilience and vitality, and improve governance capabilities; measures include launching transformation strategies, leveraging energy resources to cultivate new growth drivers, supporting leading local enterprises, adopting investment-led development policies, and reforming fiscal and tax systems. However, the results of economic transformation in Gulf states have fallen short of expectations, as they continue to face multiple challenges, including high debt levels, the inertia of rentierism, the trap of “re-rentierization,” and the mutual constraints between political and economic spheres. Overall, progress in “de-oilization” has been lackluster, while risks to social stability continue to rise. Regardless of the ultimate success or failure of this transformation, fundamental changes to the political systems and social contracts of Gulf states remain unlikely, and rentierism will continue to be a core characteristic of their political economies for the foreseeable future.

Keywords: Rentier State Theory, Late-Rentierism, Gulf states, political-economic transition, diversification