- Oil Wealth and the Poverty of Politics: Algeria Compared
Even to close observers of the Arab world, much about Algeria, with its tangle of often opaque, behind-the-scenes shifting political and military alliances and clans remains difficult to understand. Its descent, from a young revolutionary state with impeccable tiers mondiste credentials into a sustained civil war whose roots remain partly unaddressed today, has often led analysts to seek to pinpoint the processes and turning points by which this fall from grace took place. William Quandt’s classic Revolution and Political Leadership: Algeria, 1954–1968 had already laid bare the potential for post-independence divisions, and John Entelis and others in subsequent decades admirably chronicled and analyzed the country’s shifting fortunes.
It was clear from the beginning that hydrocarbons would play an enormous role in the country’s economic and political future, and, not surprisingly, several accounts about Algeria across the post-independence decades mirrored the insights of what since then has become known as the rentier state literature. In numerous accounts of oil exporters throughout the world, the concepts and buzzwords that have since become part and parcel of that literature were also applied to the Algerian case study: “Dutch disease,” rent-seeking, and the institutional shifts that make distributive institutions — dominated by new state elites — mechanisms of both economic and political control at the expense of extending the regulatory power of the state.
As Lowi notes in the introduction and throughout the book, many of these developments have been considered as virtually inevitable — structurally determined by the processes unleashed by the rapid inflows of hydrocarbon revenues. But were they in fact inevitable? If so, why do oil states respond differently to economic crises? Alternatively, could careful statecraft by a dedicated leader or a small group of committed technocrats — what today we would call “change teams” — prevent those rent-induced phenomena? It is this inquiry about structure versus agency in Algeria — with a wider comparison to Iran, Iraq, Indonesia, and Saudi Arabia — that is at the heart of Lowi’s wonderfully insightful and meticulously researched book.
It is almost ironic in retrospect that much of Algeria’s initial blueprints for development — inspired by Destanne de Bernis, Francois Perroux, and the French regulation school — paid close attention to issues of statecraft that would help implement and consolidate the industries industrialisantes policies of the country’s development approach. Ironic because, as Lowi amply demonstrates, despite its revolutionary commitments to those issues, the Algerian regime arguably within a couple of decades after independence exhibited all the social, political, and economic pathologies of the stereotypical rentier state.
What happened? To what extent and how could the Algerian leadership have overcome some of the debilitating effects of rent-induced development and responded to economic crises in ways that did not severely compromise the country’s development strategy? After an introductory section that admirably condenses a by now vast literature of the impact of hydrocarbons on development, Lowi, in a highly insightful fashion, provides an answer to the first question in a lengthy historical recall that arguably extends halfway through the book. For this section alone, Algeria observers — and those interested more generally in the politics of development in hydrocarbon economies — will want to consult Lowi’s book.
The second question — essentially the structure versus agency debate centered on the reaction to severe economic shocks — is inherently the more difficult one to answer. In her comparative chapter and in the conclusion to her book, Lowi valiantly and perceptively attempts to provide answers. It is an intellectual tour-de-force that contrasts the variation to economic shocks the author finds in her study of Algeria to that of Iraq, Iran, Indonesia, and Saudi Arabia. Much like the author, this reviewer believes [End Page 481] that the willingness of leaders in hydrocarbon economies to manage shocks and their impact can have a deep effect on the severity or alleviation of those crises.
To argue that what matters most (p...