ABSTRACT
Much of the political economy literature on the Middle East classifies the countries as being rentier states, with resource revenues being appropriated by governments. As a consequence income tax is low or non-existent, and the slogan of “no taxation without representation” does not apply. Hence being a rentier state isolates the rulers from their own peoples. The culture is evolving however, and although governments remain autocratic for the most part, economic liberalism has brought welcome changes to corporate governance. Nevertheless corruption remains an issue, not helped by the influence of the military on governments. The region could benefit from a peace dividend if some of the conflicts ended, but such a positive outcome may take years to be activated.
