Petroleum Rent and the Problem of Economic Development in Rentier States: The Case of Algeria

Abstract

This study addresses the issue of petroleum rent and the problem of economic development in rentier states, with particular reference to Algeria as a rentier state. Accordingly, the study aims to examine how petroleum rent affects economic development in rentier states, while applying this analysis to Algeria as a case study. The study concludes that, following the emergence of a new political leadership in Algeria after 1999, during the presidency of the former President Abdelaziz Bouteflika, the ruling elite utilized the financial resources generated by petroleum rent to finance development programs aimed at achieving economic development and diversifying the economy, with the ultimate objective of reducing dependence on the rentier economy.

Finally, this study seeks to assess the extent to which the economic policies adopted by the Algerian political system during the presidency of Abdelaziz Bouteflika succeeded in achieving economic development and moving the country beyond the cycle of underdevelopment. This is examined by focusing on a set of indicators of economic development, particularly the level of economic growth and inflation.