Rentier States

Definition

Rentier states are characterized by their heavy reliance on revenue from external sources, such as natural resources or foreign aid, rather than taxes or domestic production. These states receive large amounts of income without necessarily having to engage in productive economic activities.

Related terms

Resource Curse:

This refers to the phenomenon where countries rich in natural resources often experience challenges such as corruption, economic inequality, and lack of diversification.

Petrostates: These are rentier states that heavily depend on revenue from oil exports.

Foreign Aid Dependency: Some rentier states rely heavily on foreign aid for their government budgets instead of generating internal revenue through taxation.