ECONOMIC LIBERALIZATION AND THE LINEAGES OF THE RENTIER STATE

Economic liberalism has assumed a virtually uncontested position in de velopment studies, but the experiences of less developed countries bel ie the uniform assumptions about human behavior and economic processes of the neoclassical developmentalist paradigm. Market reforms have pr oduced widely divergent results. The experiences of Iraq and Saudi Ara bia, two most similar cases, demonstrate the importance of political c oalitions and institutions for different policy outcomes. Historical a nalysis is useful in discovering the relative weight of political coal itions, institutional structures, and policy in determining the outcom es of economic liberalization programs. It highlights the contingent n ature of radical economic restructuring and exposes some of the reason s why the social, institutional, and political prerequisites for marke t economies do not exist in the developing world.