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2.3. Conditions for the emergence of islands of efficiency in the past
In the past, a number of conditions had to be fulfilled for pockets of efficiency to emerge:
significant increments of state income over time, allowing for institutional
experimentation;
regime autonomy from societal demands, so that institutional decisions are made by
a limited set of elite actors; and
a non-populist development ideology that does not subject all economic and
managerial decisions to distributional and nation-building considerations.
All the GCC states bar Kuwait, but very few other oil states, fulfilled these
conditions during the oil boom from the early 1970s to the mid-1980s; it is in this period
that most of the Gulf’s impressive modern institutions were created. Despite further
gradual growth of states after 1985, most money had to be used to sustain existing
distributional clienteles, and few policy innovations happened during those times of
austerity – until recently, when the second oil boom took off, creating new opportunities
for large-scale infrastructure projects and the creation of new managerial structures.
Even during lean times, however, existing islands of efficiency have continued to
operate swiftly and coherently – increasing our confidence in stable long-term
management of new sustainable energy projects. By contrast, the quality and coherence
of the national bureaucracy at large has generally been limited, at least relative to other
wealthy countries. Regulatory penetration of society and the economy at large has been
only partial, 21 and non-project, non-enclave spending policies – public employment,
pricing of public services and so on – have often followed political rather than economic
rationales. This, as we shall see, limits the scope for more diffuse sustainability policies
aimed at regulating social behaviour.
2.4 Sustainability policies as a new phase of enclave-oriented development?
The current fiscal surpluses have opened a new window of opportunity for institutional
experiments, and at least the larger, project-oriented sustainability policies are well suited
to be managed through expanded or newly created insulated islands of administrative
efficiency. For the first time in twenty years, governments have returned to large-scale
project spending (figure 11).
21 While all GCC states, with the exception of Saudi Arabia, rank above the global median in terms of
‘government efficiency’ and all of them rank above the median on ‘regulatory quality’ in the World Bank’s
governance indicators, all rank clearly below similarly rich peers (measured in terms of GDP per capita).
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