IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v142y2020ics0301421520302883.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421520302883
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2020.111545?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mehrara, Mohsen, 2007. "Energy consumption and economic growth: The case of oil exporting countries," Energy Policy, Elsevier, vol. 35(5), pages 2939-2945, May.
    2. Masahiko Aoki, 2013. "Endogenizing institutions and institutional changes," Chapters, in: Comparative Institutional Analysis, chapter 16, pages 267-297, Edward Elgar Publishing.
    3. Mondal, Md. Alam Hossain & Kennedy, Scott & Mezher, Toufic, 2014. "Long-term optimization of United Arab Emirates energy future: Policy implications," Applied Energy, Elsevier, vol. 114(C), pages 466-474.
    4. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    5. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    6. Christophe McGlade & Paul Ekins, 2015. "The geographical distribution of fossil fuels unused when limiting global warming to 2 °C," Nature, Nature, vol. 517(7533), pages 187-190, January.
    7. Wang, Yanxiang & Ali Almazrooei, Shaikha & Kapsalyamova, Zhanna & Diabat, Ali & Tsai, I-Tsung, 2016. "Utility subsidy reform in Abu Dhabi: A review and a Computable General Equilibrium analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1352-1362.
    8. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    9. Samir, Saidi & Shahbaz, Muhammad & Akhtar, Pervaiz, 2018. "The Long-Run Relationship between Transport Energy Consumption and Transport Infrastructure on Economic Growth in MENA Countries," MPRA Paper 85037, University Library of Munich, Germany, revised 06 Mar 2018.
    10. Griffiths, Steven, 2017. "A review and assessment of energy policy in the Middle East and North Africa region," Energy Policy, Elsevier, vol. 102(C), pages 249-269.
    11. Reiche, Danyel, 2010. "Renewable Energy Policies in the Gulf countries: A case study of the carbon-neutral "Masdar City" in Abu Dhabi," Energy Policy, Elsevier, vol. 38(1), pages 378-382, January.
    12. Acemoglu, Daron, 2003. "Why not a political Coase theorem? Social conflict, commitment, and politics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 620-652, December.
    13. Taleb, H.M. & Pitts, A.C., 2009. "The potential to exploit use of building-integrated photovoltaics in countries of the Gulf Cooperation Council," Renewable Energy, Elsevier, vol. 34(4), pages 1092-1099.
    14. Jayaraman, Raja & Colapinto, Cinzia & La Torre, Davide & Malik, Tufail, 2017. "A Weighted Goal Programming model for planning sustainable development applied to Gulf Cooperation Council Countries," Applied Energy, Elsevier, vol. 185(P2), pages 1931-1939.
    15. Poudineh, Rahmatallah & Sen, Anupama & Fattouh, Bassam, 2018. "Advancing renewable energy in resource-rich economies of the MENA," Renewable Energy, Elsevier, vol. 123(C), pages 135-149.
    16. Karshenas, Massoud & Moghadam, Valentine M. & Alami, Randa, 2014. "Social Policy after the Arab Spring: States and Social Rights in the MENA Region," World Development, Elsevier, vol. 64(C), pages 726-739.
    17. Parisi, Francesco, 2003. "Political Coase Theorem," Public Choice, Springer, vol. 115(1-2), pages 1-36, April.
    18. Arouri, Mohamed El Hedi & Ben Youssef, Adel & M'henni, Hatem & Rault, Christophe, 2012. "Energy consumption, economic growth and CO2 emissions in Middle East and North African countries," Energy Policy, Elsevier, vol. 45(C), pages 342-349.
    19. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
    20. Burke, M. & Craxton, M. & Kolstad, C.D. & Onda, C. & Allcott, H. & Baker, E. & Barrage, L. & Carson, R. & Gillingham, K. & Graff-Zivin, J. & Greenstone, M. & Hallegatte, S. & Hanemann, W.M. & Heal, G., 2016. "Opportunities for advances in climate change economics," ISU General Staff Papers 3565, Iowa State University, Department of Economics.
    21. Burke, M & Craxton, M & Kolstad, CD & Onda, C & Allcott, H & Baker, E & Barrage, L & Carson, R & Gillingham, K & Graf-Zivin, J & Greenstone, M & Hallegatte, S & Hanemann, WM & Heal, G & Hsiang, S & Jo, 2016. "Opportunities for advances in climate change economics," University of California at Santa Barbara, Recent Works in Economics qt4tc5d9pb, Department of Economics, UC Santa Barbara.
    22. Kaya Abdullah & Tsai I-Tsung, 2016. "Inclusive Economic Institutions in the Gulf Cooperation Council States: Current Status and Theoretical Implications," Review of Middle East Economics and Finance, De Gruyter, vol. 12(2), pages 139-173, August.
    23. Clague, Christopher & Keefer, Philip & Knack, Stephen & Olson, Mancur, 1999. "Contract Intensive Money," MPRA Paper 25717, University Library of Munich, Germany.
    24. Clague, Christopher & Keefer, Philip & Knack, Stephen & Olson, Mancur, 1999. "Contract-Intensive Money: Contract Enforcement, Property Rights, and Economic Performance," Journal of Economic Growth, Springer, vol. 4(2), pages 185-211, June.
    25. Saidi, Samir & Shahbaz, Muhammad & Akhtar, Pervaiz, 2018. "The long-run relationships between transport energy consumption, transport infrastructure, and economic growth in MENA countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 78-95.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li-Chen Sim, 2023. "Renewable Energy and Governance Resilience in the Gulf," Energies, MDPI, vol. 16(7), pages 1-17, April.
    2. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rok Spruk & Mitja Kovac, 2018. "Inefficient Growth," Review of Economics and Institutions, Università di Perugia, vol. 9(2).
    2. Duarte N. Leite & Sandra T. Silva & Oscar Afonso, 2014. "Institutions, Economics And The Development Quest," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 491-515, July.
    3. Kaya Abdullah & Tsai I-Tsung, 2016. "Inclusive Economic Institutions in the Gulf Cooperation Council States: Current Status and Theoretical Implications," Review of Middle East Economics and Finance, De Gruyter, vol. 12(2), pages 139-173, August.
    4. Eicher, Theo S. & Schreiber, Till, 2010. "Structural policies and growth: Time series evidence from a natural experiment," Journal of Development Economics, Elsevier, vol. 91(1), pages 169-179, January.
    5. Ceyhun Haydaroglu, 2015. "The Relationship between Property Rights and Economic Growth: an Analysis of OECD and EU Countries," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 4, pages 217-239, December.
    6. Van Noort, S., 2017. "Causes and Effects of Private Property Rights Security," Cambridge Working Papers in Economics 1746, Faculty of Economics, University of Cambridge.
    7. Ashok Chakravarti, 2012. "Institutions, Economic Performance and the Visible Hand," Books, Edward Elgar Publishing, number 14751.
    8. ROUGIER Eric, 2015. ""The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development," Cahiers du GREThA (2007-2019) 2015-12, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    9. Serkan Degirmenci, 2011. "Do Institutions Matter for Regional Economic Growth and Development? The Case of Turkey," ERSA conference papers ersa11p1180, European Regional Science Association.
    10. Theo Eicher & Till Schreiber, 2010. "Institutions and Growth: Time Series Evidence from Natural Experiments," Working Papers UWEC-2007-15-P, University of Washington, Department of Economics.
    11. Terra Lawson-Remer, 2011. "Security of Property Rights for Whom?," WIDER Working Paper Series wp-2011-083, World Institute for Development Economic Research (UNU-WIDER).
    12. Serkan Degirmenci, 2011. "Do Institutions Matter for Regional Economic Growth and Development? The Case of Turkey," ERSA conference papers ersa11p1374, European Regional Science Association.
    13. Lawson-Remer, Terra, 2011. "Security of Property Rights for Whom?," WIDER Working Paper Series 083, World Institute for Development Economic Research (UNU-WIDER).
    14. Ghulam Rasool Madni, 2019. "Probing Institutional Quality Through Ethnic Diversity, Income Inequality and Public Spending," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(2), pages 581-595, April.
    15. Lamperti, Francesco & Bosetti, Valentina & Roventini, Andrea & Tavoni, Massimo & Treibich, Tania, 2021. "Three green financial policies to address climate risks," Journal of Financial Stability, Elsevier, vol. 54(C).
    16. Hartwell, Christopher A., 2014. "The impact of institutional volatility on financial volatility in transition economies : a GARCH family approach," BOFIT Discussion Papers 6/2014, Bank of Finland, Institute for Economies in Transition.
    17. Knack, Steve & Xu, Lixin Colin, 2017. "Unbundling institutions for external finance: Worldwide firm-level evidence," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 215-232.
    18. Philip Keefer & Christopher Kilby, 2021. "Introduction to the special issue: In memoriam Stephen Knack," The Review of International Organizations, Springer, vol. 16(3), pages 473-493, July.
    19. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    20. Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross‐Country Empirical Tests," Southern Economic Journal, John Wiley & Sons, vol. 68(2), pages 310-329, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:142:y:2020:i:c:s0301421520302883. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.