Extractive Growth, Saudi Style
Tuesday, October 2, 2012
Daron Acemoglu and James Robinson

In the last two blog posts (here and here) we discussed the emergence of extractive growth in the United Arab Emirates. The United Arab Emirates is of course not the only country in the Gulf that has achieved some growth under extractive institutions. Saudi Arabia is more important not only because of its dominant role in the oil market but also because of its more central role in the international events of the last decades.

There are several parallels but also important differences between the United Arab Emirates and Saudi Arabia. Both have achieved rapid growth thanks to oil, even if the United Arab Emirates is significantly richer, with almost twice the income per capita of Saudi Arabia. In both cases, the ruling families have been the main beneficiaries of this growth; in both cases, they have used the oil wealth in part to placate the population; and in both cases, the presence of a significant migrant population has been useful not only economically as a source of cheap labor but also politically in reducing any demands towards more inclusive institutions. But political dynamics have been quite different. Saudi Arabia has been much more repressive, and religion plays a more defining role both in the regime’s repression of basic freedoms, and at first paradoxically, in the few political challenges that have been articulated against it. The origins of these differences lie largely in Saudi history.

The foundations of the modern Saudi state were forged in the early 18th century when the upstart ruler of the small town of Dariyah near Riyadh, Muhammed Ibn Saud, entered into an alliance with Muhammed Ibn Abdul Wahhab, a religious leader with a particularly hard-line and a zealous following. Ibn Abdul Wahhab decried the departure from the purity of the Prophet and the caliphs, and advocated not only religious purity but also fighting the “infidels” which in this case included Muslims that were insufficiently pure according to Ibn Abdul Wahhab. The resulting “Wahhabi alliance” involved Muhammed Ibn Abdul Wahhab and his band of devoted followers supporting Muhammed Ibn Saud’s government and plans for increasing his influence in the Arabian Peninsula. In return, Ibn Saud would propagate this particular brand of religious fanaticism. It served Ibn Saud well, and by the beginning of the 19th century, the Wahhabi alliance that enabled Ibn Saud to dominate much of the Arabian Peninsula. At some level this is no different than other examples of rulers strategically using religion for state centralization, which we discussed here. But the ready availability of this religious force probably stacked the cards against the development of even the most embryonic inclusive institutions in the Arabian Peninsula, paving the way for a particularly authoritarian and repressive version of state centralization.

The Saudi expansion of the 18th century was finally checked and reversed when the ruler of Egypt, Mehmet Ali intervened. But the Wahhabi alliance was revived in the early 20th century when Abdul Aziz Ibn Saud took up the mantle. Using the power vacuum in the Arabian Peninsula resulting from the weakening of the Ottoman control over the area, he started a second Saudi expansion. Supporting this were again bands of devoted followers of Ibn Abdul Wahhab, called “brothers” (Ikhwan). These brothers would become Abdul Aziz Ibn Saud’s ruthless foot soldiers, turning their religious fanaticism into military might. Their value to Abdul Aziz Ibn Saud is explained by one of his advisers, Hafiz Wahba, as follows (quoted in Malise Ruthven, A Fury For God, p, 137):

I have seen them hurl themselves on their enemies utterly fearless of death, not caring how many full, advancing rank upon rank with only one desire — the defeat and annihilation of the enemy. They normally give no quarter, sparing neither boys nor old man, veritable messengers of death from whose grasp no one escapes.

It is this alliance that creates the repressive nature of the Saudi regime today and also its myriad of internal contradictions. For one, for the Saudi dynasty to dominate society, it would need to make the brothers and their religious zeal subservient to the Saudi state; not an easy feat. The conflict first broke out in 1929, when the brothers decided that Abdul Aziz Ibn Saud’s regime was not sufficiently pure, ultimately leading to the slaughter of hundreds of brothers by machine gun at Sibillah. But this did not end the Saudi dynasty’s manipulation of Wahhabism and religion. As oil came online, dominating and controlling Saudi society became even more important, and uncompromising religious fanaticism became even more useful to the Sauds. For all practical purposes, religion in Saudi Arabia is state controlled.

However, along the lines of the “obscurantist deadlock” idea we discussed here, the Saudi domination of religion and its repression of society under the banner of religious purity did not kill dissent but transformed it. Dissent would then take the only form allowed in Saudi society, where non-religious life was very severely constricted: an even more extreme form of Wahhabism, as unfortunately illustrated by the most famous of dissenters of Saudi Arabia, Juhayman, “the angry face,” whose two-week siege of the Grand Mosque led to hundreds of deaths in 1979, and Osama bin Laden.

Article originally appeared on Why Nations Fail by Daron Acemoglu and James Robinson (http://whynationsfail.com/).
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