The Price of Wealth: Economics and Institutions in the Middle East.

• Author: Anderson, Lisa
• Position: Review

The Price of Wealth: Economics and Institutions in the Middle East

Kiren Aziz Chaudhry (Ithaca, NY: Cornell University Press, 1997) 330 pp.

Why is it that the oil-producing countries include a disproportionate number of what seem to be the world's most exotic and unorthodox states? Why do most of the world's ruling monarchs preside over oil-producing states? Why are most of the world's "rogue states" oil-producing countries? Although the authors of these two enlightening analyses do not set out to solve these riddles, they provide provocative and plausible answers to these questions in their painstaking and analytically acute examinations of the recent fortunes of Saudi Arabia and Libya. As Kiren Chaudry and Dirk Vandewalle chronicle in their respective publications, the modern international political economy of oil production poses remarkable challenges for oil producers. Small wonder that the oil-producing countries include some of the most distinctive, even eccentric states in the world.

The quadrupling of oil prices in 1973 flooded the oil producers with unanticipated revenues. Still, as Kiren Chaudhry writes:

[T]he boom decade did not change a single political regime in the Arab world: indeed, in the vast majority of cases, the same leaders who ushered in the boom were still in charge in 1996. Yet the capital flows of the 1970s reshaped the domestic institutions and economies of each constituent country: whole classes rose, fell, or migrated; finance, property rights, law and economy were changed beyond recognition. Could this be true? After all, this assertion turns 200 years of social and political theory on its head. Since Adam Smith and Karl Marx began to speculate about the relationship between economies and polities, we have believed that political regimes are reflections of economic forces. There has been ample room for dispute between those who admire the liberal's night-watchman state and those who decry the malign instruments of the ruling class, but no one argued that rulers could outlast the classes that produced them or survive unscathed wholesale remodeling of economic and social institutions.

These books are examinations of precisely that unanticipated and anomalous outcome. The stability of the Saudi royal family's control of the country they named after themselves, or of the Libyan regime--whose ruler invented an entirely new word, jamahiriyyah (loosely translated as state of the masses), to describe his domain--would...