The theory of the “rentier state” says that countries that receive substantial amounts of oil revenues from the outside world on a regular basis tend to become autonomous from their societies, unaccountable to their citizens, and autocratic. The theory is used to help explain why Iran, the Gulf States, many African states ( Nigeria, Gabon) and other countries (e.g., Netherlands) with abundant resource wealth perform less well than their resource-poor counterparts. How does this happen, according to the rentier state theory? The short answer, according to Yates, is that a rentier state and rentier economy lead to a rentier mentality, which dooms a country’s economy and long-term prospects.
https://www.ukessays.com/essays/economics/rentier-state-rents.php
a rentier state is the one, “where rent situation predominates”.
He divides rent into two as internal rent and external rent. Then, he says that to define a state (or economy) as rentier, the externality of the rent is important. In a way his explanation is fair. Externality of rent would have different repercussions than internality. If the rent is external, state economy is dependent on the resources coming from outside. While a small group of people in the society generating the rent, the majority involved in distribution and utilization of it. Lastly, the rent should be obtained by the government to call it as the rentier economy. This makes government to act independently and lose the basis of the necessities of a democracy.
http://whynationsfail.com/blog/2013/6/25/natural-resources-and-political-institutions-the-rentier-sta.html
