Rentier State

The concept of rentier state was developed in connection with states whose revenue is derived primarily from the rest of the world rather than from domestic sources. The foremost case is states in countries that are significant exporters of minerals, where the mineral rent is captured directly by the state. Other potential sources of rent are control of strategic waterways (e.g., the Suez or Panama canals); state control of activities that are restricted or prohibited elsewhere (gambling, cultivation of drug crops); or geostrategic position, whereby other states feel compelled to support the state in question with regular unrequited payments (including development aid).

A state having access to revenue accruing from abroad may not need to tax the domestic economy at all, or less so than would ...