ABSTRACT
This chapter analyzes the claim that throughout the Gulf Arab states, a production-oriented model is displacing the rentier-state development model that has and is dominating throughout the region. Using Luciani's classic distinction between allocation states and production states, the chapter finds that the region is in a process of adjusting its underlying economic structures to make way for a more production-oriented economic model. Allocation-states, also referred to as distribution or rentier-states, are characterized by a unique circumstance that allows the state to be largely dislocated from the national economy. The chapter explores economic reforms such as privatization and deregulation of the Gulf Arab economies and policies that aimed at strengthening the economies institutional context are seen as an expression of the desire to move in the direction of a production-oriented economy. It explains why the Gulf Arab states are placed among the weakest of the 40 highest ranked economies worldwide.
