Received wisdom in economics and political science suggests that oil-rich states suffer from lopsided development and have weak long-term growth prospects. Oil booms, say economists, are particularly bad for you: with oil money comes corruption and the temptation to substitute patronage for targeted economic policy. Oil-rich states are moreover seen as having particularly weak administrative structures and public sectors.

The GCC countries are among the most oil-dependent in the world, are run by patrimonial elites, have no history of pre-oil economic development to speak of, and have just witnessed a decade of rapidly accelerating oil prices. Sufficient ingredients, it seems, for a feast of waste and misallocation.

To some extent, conventional wisdom has held true: important parts of the GCC state apparatuses are inefficient, opaque and slow. In the last decade, the Gulf oil monarchies have expanded an already overstaffed public sector, raised civil service wages with no regard to productivity and in many cases deepened their subsidy regimes. Recent years have seen major corruption scandals especially in the state-driven real estate sector. The GCC ranks worse on indicators of government effectiveness than most other countries with comparable GDP per capita.

General levels of productivity in GCC economies have stagnated or declined over the last few decades, with most growth an outcome of increasing quantitative use of factors like capital and labor rather than technological advances.