ABSTRACT
This chapter deals with the implications of this near-deterministic process for the political economy of the Gulf Cooperation Council (GCC) monarchies, cases with a long and fairly uninterrupted tradition of rent recycling. It focuses on the GCC private sector, as this includes the social agents which have benefited from rent recycling the most. The chapter shows that structures of rent distribution by GCC regimes have changed significantly since the 1970s oil boom. It demonstrates that economic activity by government as well as business has undergone important changes also in qualitative terms. Business is no more all-dependent on government spending decisions and seems to cater to a more significant private demand at least in the short run. The statistical results on Saudi Arabia cited above indicate that even current spending which consists to a significant extent of wage spending has a much reduced impact on business growth in the post-1986 period.
