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Rationalizing energy policy reforms in the gulf cooperation council: Implications from an institutional analysis

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  • Tsai, I-Tsung
  • Mezher, Toufic

Abstract

The Gulf Cooperation Council (GCC) states are undertaking a number of energy policy reforms to cope with challenges from geopolitical tension and oil revenue depletion. These reforms are, however, different from those implemented in the western world for post-oil transition. This paper analyzes post-reformed state control over energy assets and energy transactions to provide an institutional view on the rationality of GCC's unique reform approach. Our study shows persistent but re-programmed state dominance over the energy sector, with energy assets owned either by national oil companies, non-oil state-owned enterprises, or public-private-partnership (PPP) agents with state ownership; and energy transactions governed either by state regulation or PPP contracts in the absence of any market mechanism. This institutional setting may allow the authority to sustain the legacy rentier social contract by expanding state-controlled rent source from oil to non-oil revenue and replacing low-power energy subsidy with high-power state-provided jobs as the rent for transfer. This institutional motivation will ultimately jeopardize market-based reforms and large-scale carbon regulation in the region. We elaborate the theoretical implications and discuss near-term development of GCC's energy policy reforms under the institutional-alignment constraints.

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  • Tsai, I-Tsung & Mezher, Toufic, 2020. "Rationalizing energy policy reforms in the gulf cooperation council: Implications from an institutional analysis," Energy Policy, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:enepol:v:142:y:2020:i:c:s0301421520302883
    DOI: 10.1016/j.enpol.2020.111545
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    3. Mohammad Al-Saidi, 2020. "From Economic to Extrinsic Values of Sustainable Energy: Prestige, Neo-Rentierism, and Geopolitics of the Energy Transition in the Arabian Peninsula," Energies, MDPI, vol. 13(21), pages 1-16, October.

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