This intricate web of economic interests, power dynamics, and security concerns has significant implications for regional and global stability


The Relationship between Rentier State Economies and Proxy Wars

In the realm of international relations and geopolitics, the nexus between rentier state economies and proxy wars has long been a subject of academic inquiry and political concern (Beblawi, 1987; Ross, 2012). Rentier states, characterized by their heavy dependence on revenues generated from the export of natural resources, often find themselves entangled in conflicts beyond their borders through the use of proxy actors (Dunning, 2008). This intricate web of economic interests, power dynamics, and security concerns has significant implications for regional and global stability (Fearon, 2004). This thesis seeks to explore and dissect the multifaceted connection between rentier state economies and proxy wars, shedding light on the underlying causes, consequences, and potential avenues for mitigation.

The phenomenon of rentier statehood is a distinct feature of contemporary global politics, with several countries relying heavily on the export of oil, gas, minerals, or other valuable resources to fund their governments and sustain their economies (Auty, 2001). The quintessential rentier state is often associated with the Middle East, where oil-rich nations like Saudi Arabia, Iraq, and Kuwait have leveraged their hydrocarbon wealth to exert influence on the global stage (Beblawi & Luciani, 1987). However, the concept of rentierism extends beyond the Middle East and encompasses countries in Africa, Latin America, and beyond, making it a pervasive and pertinent issue in contemporary international relations (Karl, 1997).

Proxy wars, on the other hand, represent a particular form of conflict where external powers provide support to belligerent groups within a target country (Crenshaw, 1995). These external actors, often superpowers or regional hegemons, use proxies as a means to achieve their strategic objectives while maintaining plausible deniability (Levitsky & Way, 2010). Proxy wars have been a hallmark of the Cold War era, with conflicts such as the Vietnam War and the Afghan War serving as prime examples (Mack, 1975). In the post-Cold War era, proxy wars have evolved and persisted, taking on different forms and objectives, often intertwining with rentier state dynamics (Dube & Vargas, 2013).

The interplay between rentier state economies and proxy wars is intricate and multifaceted, with several key dimensions to consider:

Economic Interests and Resource Dependence

One of the fundamental drivers linking rentier state economies to proxy wars is their inherent economic vulnerability stemming from resource dependence (Smith, 2004). Rentier states primarily rely on a single or limited set of natural resources, such as oil, gas, or minerals, for a substantial portion of their revenues (Auty, 1993). This dependence creates a unique economic dynamic that exposes them to external manipulation and price fluctuations, thus significantly impacting their decision-making regarding proxy wars (Ross, 2004).

Resource Dependency and Vulnerability

Rentier states often experience a high degree of resource dependence, relying on a single or dominant export commodity to sustain their economies (Auty, 2001). While this reliance can bring substantial wealth, it also leaves them highly susceptible to changes in global commodity markets (Karl, 1997). Fluctuations in resource prices, whether due to geopolitical events or shifts in demand, can have profound economic consequences for rentier states (Smith, 2004).

During periods of high resource prices, rentier states amass considerable wealth, which can be used to finance domestic development projects, social programs, and military expenditures (Kaldor, 2012). However, when resource prices plummet, as witnessed during oil price crashes, rentier states face severe economic challenges (Davis, 2015). Reduced revenues can lead to fiscal deficits, currency devaluation, and economic instability (Ross, 2004).

Proxy Wars as Economic Safeguards

In the face of such economic vulnerabilities, rentier states often view proxy wars as a means of safeguarding their resource-dependent economies (Davis, 2015). Proxy wars can serve as tools to secure resource-rich territories or to ensure the uninterrupted flow of resources to international markets (Fearon, 2004). For instance, in the case of Iraq’s invasion of Kuwait in 1990, Saddam Hussein’s regime sought to control Kuwait’s oil fields to strengthen its economic position and bolster its regional influence (Waltz, 1990).

Moreover, the threat of proxy wars can be used by rentier states to negotiate favorable terms in resource agreements with international oil companies or to garner military and economic support from powerful allies (Fearon, 2004). In this context, the economic interests of rentier states become intertwined with their strategic calculus in proxy conflicts (Smith, 2004).

Case Studies: Economic Interests and Proxy Wars

Examining specific case studies provides valuable insights into the relationship between economic interests and proxy wars in rentier states. The Iran-Iraq War (1980-1988) is a notable example where both Iran and Iraq, heavily reliant on oil revenues, engaged in a brutal proxy war partly to secure control over the Shatt al-Arab waterway and its economic implications for oil exports (Maoz, 1989).

Similarly, the ongoing conflict in Yemen, with the involvement of regional powers like Saudi Arabia and the United Arab Emirates (UAE), exemplifies how economic interests can drive proxy wars. Yemen’s strategic location near key shipping routes and its potential for controlling the Bab el-Mandeb strait, a vital conduit for oil shipments, make it a focal point in the broader regional power struggle (Hokayem, 2018).

Geopolitical Power Dynamics

The strategic importance of rentier states often attracts the attention of major powers (Buzan & Weaver, 2003). As global energy hubs, they become pawns in international power politics, making them more inclined to participate in or support proxy wars to secure external protection (Allison, 2017).

Regional Security Complexes

Rentier states frequently exist in volatile regions with complex security dynamics (Buzan, Wæver, & Wilde, 1998). Proxy wars can serve as a means of projecting influence and maintaining regional hegemony, leading rentier states to sponsor or support proxy actors in neighboring countries (Waltz, 1979).

Conflict Resolution and Peacebuilding

Understanding the nexus between rentier state economies and proxy wars is crucial for international efforts aimed at conflict resolution and peacebuilding (Doyle & Sambanis, 2006). Addressing the underlying economic drivers of conflict is essential for achieving sustainable peace in affected regions (Collier, Hoeffler, & Rohner, 2009).

This thesis aims to provide a comprehensive analysis of the nexus between rentier state economies and proxy wars, drawing on historical cases and contemporary examples from various regions (Fearon & Laitin, 2003). By examining the motivations, strategies, and consequences of rentier state involvement in proxy conflicts, this research will contribute to a deeper understanding of the intricate dynamics at play and offer insights into potential policy interventions aimed at mitigating the negative effects of this nexus.