ABSTRACT
Like other regions in the world economy, the Middle East is undergoing a restructuring of its political economy. During the oil-boom era of the 1960s and 1970s, “petrodollars” were put to use toward a state-directed and largely inwardlooking strategy of economic development in which the government was the largest owner and employer. Foreign investments were limited but imports of Western technology and especially weaponry were massive. The oil-rich countries imported labor from the non-oil Arab states, creating what some have termed a regional oil economy. In Middle Eastern countries, the social and economic infrastructure was largely owned by the state, and government agencies administered subsidies, price controls, and trade regulations.
