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uilding process in which such regulatory capacities are built up through taxation or
military mobilization. Trust between bureaucracy and nationals tends to be low, as does
rule-abidance. It has been much easier historically to build up efficient technocratic
enclaves than to build up broad-based regulatory powers vis-à-vis societies which have
been most of all distributional clients of the states. In some ways, one appears to be the
result of the other: by clientelizing and ‘buying off’ large chunks of society, regimes
could create political space for autonomous technocratic institution-building in other
fields. But the co-optation of society has come at a cost that is both fiscal and regulatory.
The GCC states’ rentier status makes price changes for utilities and petrol
politically difficult. Reduced prices have traditionally been perceived as part of the ruling
bargain and attempts to increase them have been repeatedly reversed. In a time when the
governments are flush with cash but many nationals are struggling to adapt to rising
prices and the socio-economic dislocations of the boom, significant increases in
electricity or water tariffs appear unlikely. Only in April 2006, King Abdullah of Saudi
Arabia significantly decreased domestic petroleum prices in Saudi Arabia to have the
population partake in the boom and ease the strains of inflation (figure 12).
Such problems are more relevant for some states than for others. For sheikhdoms
with a small national population, such as Abu Dhabi and Qatar, large-scale projects are
much more important than the regulation of sustainability in local society. The few large
industrial plants in these countries are fairly easy to regulate. The larger population and
Figure 12
Fuel prices 2006 (US$ cent/liter; source: GTZ)
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150
100
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Super Gasoline
Diesel
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Saudi
Arabia
UAE Kuw ait Bahrain Qatar Oman USA UK
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