The shifting role of agency in rentier state formation: a history of the early Saudi bureaucracy

There are two established ways of recounting the emergence of the modern Gulf oil monarchies: One type, the social scientific one, tends to tell the reader of anonymous structural forces, of the “resource curse”, of the “rentier state”, and of how these forces have shaped politics and markets with their inexorable logic. The other narrative, of the popular history variety, offers us romantic, personalized accounts of desert sheikhs, their whims, and the sudden riches of their families (complemented by tales of monumental corruption in some less benevolent tales).

In its analysis of the creation of the Saudi Arabian administration, this article will, to a surprising degree perhaps, side with the sheikhs. This is despite – or rather because of – its ambition of being theoretically informed: By stressing some of the voluntarist elements of state creation in Saudi Arabia, it will try to bring personality and politics back into the structurally over-determined accounts of the creation of Gulf states and rentier systems in general.

The article will look specifically at the formative period of state formation between 1951 and 1962, when the interplay of administrative growth and elite politics, patronage and factionalism was the most intense and the institutional setting the most fluid. The account has three main aims: First, to explain how early conflicts and deals between senior political figures “congealed” into institutional constellations which have shaped the kingdom’s political landscape until today. Rapidly growing oil income temporarily gave the Saudi political elite great autonomy in designing the shape of their expanding state, and institutions were unusually flexible tokens in power games.

Secondly, the article intends to explain how the Saudi administration developed a certain degree of segmentation early on, i.e. the tendency of various institutions to be little “states within the state” – a feature closely related to the early personalization of institutional design. This segmentation has allowed the emergence of a few very efficient bureaucratic islands, but has also led to failures of coordination and the parallel building of neo-patrimonial bureaucratic fiefdoms, a feature still much in evidence in today’s kingdom. Increasing bureaucratization and regularization has often only solidified these cleavages.

Thirdly, the article explains how the extreme social mobility offered by a rapidly expanding state and its social networks created new players in the economic and political elite. This fluidity is in marked contrast to today’s mature and very static Saudi system in which most stakes have been “parcelled out”, both in business and bureaucracy. Much of the Saudi elite and its institutions were made in a dozen dizzying years in the 1950s and 1960s.

In theoretical terms, the aim of the article is to nuance several of the assumptions of the debate on “rentier states” by closely looking at the actual history of bureaucratic evolution of Saudi Arabia, the literature’s staple rentier example. I intend to show that the autonomy of rentier states is not constant over time, as constraints grow with bureaucratic expansion. I also demonstrate that external state income does not necessarily lead to inefficient institutions, but rather opens great leeway for institutional design which can be highly efficient in some areas and patrimonial in others.

The article is divided into two halves: One describes the early jumble of institutional growth which went along with growing oil income and the expansion of Al Saud princes into the state after 1951. The second half recounts how a more permanent distribution of power and institutional resources emerged from the fundamental struggle between King Saud and Crown Prince Faisal. A briefer section explains how the dispensation which had emerged by 1962 subsequently grew and was consolidated, with the Saudi state apparatus moving from great fluidity to bureaucratization and eventually great stasis – immortalizing the institutional outcomes of earlier struggles.

My account is almost exclusively based on primary sources, significant parts of which are previously unexploited. I have used US and British diplomatic documents up to 1975, the extensive records of a 1960s/70s Ford Foundation mission on administrative reform held at the Institute of Public Administration in Riyadh, and the Philby archive at St. Antony’s College in Oxford. I have moreover conducted interviews with seasoned diplomats, expatriate advisors and former Saudi bureaucrats in London and Riyadh. Finally, I draw on a large number of PhDs written by Saudis in the West about Saudi administrative development issues, a number of contemporary country studies and reports in 1950s and 1960s trade journals.

The literature
While much has been written on the impact of the USA on the formation of modern Saudi Arabia, little research has been done on the internal politics of the formation of the modern Saudi state.

Sarah Yizraeli’s valuable “The remaking of Saudi Arabia” remains the only account primarily concerned with Saudi elite politics in the 1950s and early 60s, which I hope to complement from a more institutional perspective: Yizraeli concentrates mainly on the struggle between Faisal, Saud and their princely followers and is less concerned with the formation and composition of bureaucracy as such. The fiefdom character and segmentation of administration and its interplay with personal politics on various levels therefore are not in the focus of her analysis, which results in a certain overemphasis on the “modern” aspects of institutional growth and differentiation under Faisal.

While Yizraeli focuses strongly on persons, the other main account of modern state formation in Saudi Arabia, Kiren Aziz Chaudhry’s “The Price of Wealth”, conversely talks almost exclusively about structural economic forces and institutions. Individual actors are largely absent from her account, which means that many specifics of institution-building I focus on go unexplained, and rationality and capacity of the early Saudi administration are considerably exaggerated. My claim is that focusing on the interplay of personal politics and institutional formation offers the most adequate perspective on the formative years of the modern Saudi state.

The state of the state in the early to mid 1950s

“Verily, my children and my possessions are my enemies” (Ibn Saud briefly before his death)

Patrimonial rule under Abdalaziz
Modern bureaucracy is a recent phenomenon in Saudi Arabia. Its first elements were created in the early 1950s during King Abdalaziz’ last years, when oil income was taking off. In the lean years before, the kingdom had not been ruled through a differentiated administrative apparatus, but rather through trusted regional governors installed by the king, supported by other local intermediaries and clients, be it notables or tribal shuyukh.

On the national level, the system completely revolved around Abdalaziz, who was king, chief legislator and had the right to review all judicial decisions. Most of the departments at Abdalaziz’ court were occupied with the logistics of the court itself and not broader administration or public services. In the Western Province, taken from the Hashemites in the mid-1920s, Abdalaziz had inherited a somewhat more elaborate bureaucratic structure, with special offices e.g. for health and education.

Altogether, however, most Saudis had no contact with formal administration, as apart from basic security, the state provided hardly any services to its citizens. There were few formal, national bodies during most of Abdalaziz’ reign: A ministry of foreign affairs had been set up in 1930 under Faisal. Ministries of Finance and Defense followed in 1937 and 1944. These agencies were not linked through formal mechanisms of budgeting or governance.

Institutionalization in the 1950s
After WWII, oil income started to grow rapidly – from 10.4 million US$ in 1946 to 56.7 million US$ in 1950. While old Abdalaziz’ personal rule grew increasingly slack, there was a growing need to manage the huge sums of money flowing into the kingdom, as at least his second oldest surviving son Faisal and the American diplomats and oilmen present at the time realized. In the absence of any scheme for budgeting and development, much of the growing oil income was frittered away by the court, its clients and their entourages. There was another reason for institution-building: With the unquestioned patriarch leaving the stage, a new generation of princes vied for power and prestige, giving them a stake in the creation of new posts and ministries.

In 1951 Abdalaziz created the basis for a rudimentary functional differentiation of domestic bureaucratic institutions, separating the Ministry of Interior (MoI) from the fiscal and administrative affairs of the Ministry of Finance. Differentiation meant spread of the royal family into state posts: The MoI was given to Faisal’s son Abdallah. In December 1953, briefly after Abdalaziz’ death, the Ministries of Education and Agriculture were officially established as spin-offs from the Ministries of Interior and Finance respectively. Aspiring Prince Sultan took charge of agriculture, his full brother Fahd of education.

There were few functioning mechanisms to coordinate their work: The formal introduction of a Council of Ministers in 1953, briefly before Abdalaziz’ death, had changed little about actual practices of governance. New King Saud, Abdalaziz’ oldest surviving son governed according to the patrimonial style of his father, basing his rule on the court and embarking on grand tours through the country in which he disbursed royal largesse. Decision-making on major national questions remained largely informal, and although service provision improved in some sectors, governance was marred by “princely jealousies”.

Institutional design: “form follows family”
It was largely intra-family patrimonial politics which determined who would receive which government post – not different from other clan-based, administratively underdeveloped political systems. However, patrimonial politics also determined much of the very institutional design of the rapidly growing state during Abdalaziz’ last years and under his first successor.

Institutions in the 1950s were malleable and often adjusted to the authority and status of the persons or factions leading them – or occasionally created from scratch to either bolster or weaken specific players. Although there was a general trend of functional differentiation, concerns of power balancing were as important in the emergence specific bureaucratic designs. In summer 1951, Abdallah bin Faisal was made Minister of Health and Interior for the reported reason that he should be equal in status to Minister of Defense Prince Mishaal. Conversely, the likely motivation for a 1952 plan to set up a Ministry of Air Force, with Mishcal as minister and his full brother Mitcib as deputy, was to prevent aviation issues from falling under the authority of the new Ministry of Communications under Prince Talal. At some point in 1953, it seemed that Saudi Arabia would have to separate government airlines, as Mishcal and Talal could not agree.

When Talal resigned as Minister of Communications in 1955, the Communications portfolio was reassigned to the Ministry of Finance (then under the commoner Mohammad Suroor). Talal told US diplomats that this was essentially a solution to avoid picking one of the various princely candidates for the post and offending the others.

It seems that the tailoring of institutions around personal needs and conflicts was also reproduced on a smaller scale among senior commoner administrators: Then Deputy Minister of Finance Mohammad Suroor e.g. was given a new post for the supervision of both pilgrimage and broadcasting for the reason that the heads of these two departments were rivals, and making Suroor titular head of both meant that none would be subordinate to the other. When Saudi ambassador to the US Asad Al-Faqih returned to the kingdom in 1955, a new post in the Ministry of Foreign Affairs was created according to his own proposal (“Inspector of the Diplomatic and Consular Service”).

Under King Saud, senior appointments and institutional changes were increasingly a function of his rivalry with Crown Prince Faisal. Their struggle has been recounted elsewhere, so a few examples of how it affected the institutional set-up of the kingdom will suffice. The defence establishment was a prime battleground, in terms of successive appointments, but also administrative engineering. King Saud detached the Royal Guard under Muscad bin Saud from the Ministry of Defense to weaken Mishcal and strengthen his own sons. In May 1955, Saud decreed the formation of a modern National Guard which was to be headed another of his sons, Khalid bin Saud. This again was seen as a step against Mishcal, who had been able to prey on National Guard resources before, as it had been a relatively weak institution headed by a commoner. In 1964, after Saud’s final defeat by Faisal, the Royal Guard was attached to the Ministry of Defence, implying its disbandment as independent institution. Institutional design followed power politics.

Institutions as fiefdoms
Institutions being tokens in political games, they would also used for building personal fortunes and expanding one’s following. Proprietary patterns were established early on: In his later years, Abdalaziz had “granted” several of the new agencies to specific factions among his sons, a process in which maternal lines played an important role. Examples include the Royal Guard, the governorship of Riyadh and the Ministry of Defense, all controlled successively by full brothers. Control of specific institutions through factions within the Al Saud has been a prevalent pattern ever since. Similarly, well-positioned commoner families would develop a permanent claim over certain offices.

Most senior figures used the institutions they controlled to personally distribute favours and conclude business deals. King Saud himself built up a following of contractors whom he delighted with large contracts for palaces and ministries. Minister of Defence Mishcal – known as one of the richest princes in subsequent decades – was said to have used his privileged post to keep millions of freshly minted riyals for himself, as did a number of regional governors. Most princes in bureaucratic positions quickly surrounded themselves with growing numbers of hangers-on, advisors and business partners.

Formal and informal authority in a fluctuating bureaucracy
Saudi Arabia largely lacked an administrative tradition and societal checks on the bureaucracy. Combined with family politics, this meant that the unprecedented growth of the bureaucracy in the 1950s was not accompanied by much rationalization. Although some new agencies helped to increase the provision of public services, the sudden availability of resources also led to uncontrolled, Byzantine expansion based on patronage.

Many of the young administrators were highly inexperienced, especially the royal ones. Minister of Defence Mishcal e.g. was reported to be dignified and serious about his job, but in terms of institution-building, “through lack of education, knowledge and experience, performance results have been practically nil as the Ministry remains unorganized and its procedures are on an entirely personal basis. He [Mishcal] leans heavily for advice and recommendations on foreign counsel.” Similarly, by the time Talal’s Ministry of Communications was reattached to Finance, he was said to have achieved very little.

The personalized nature of institutions went along with a lack of meaningful formal procedures. In the 1950s, there were no proper systems of civil service training, seniority or even document filing. The US embassy at the time was trying to keep track of administrative development and drew charts of agencies, but “…the diagrams themselves have proved to be most confused, since this Government does not lend itself at all well to such schematic presentation, …the organization is so confused, particularly among the lower echelons, that an unwarranted level of research would be required in order to fill out charts at all these levels…since organization means little to this Government, it is very flexible and changes with such rapidity that charts are outmoded almost before they can be prepared.”

Aramco at the time kept a roster of Saudi public personnel, on which the government itself depended due to lack of oversight over its fluctuating institutions. Several agencies, such as the Ministry of Economy created in July 1953, remained merely on paper. When posts were actually filled, they frequently were just depositories for clients of ministers or princes, adding “excess baggage” to the bureaucracy.

Informal authority determined the actual importance of institutions: The bits of bureaucracy which mattered were run by important princes or by commoners very close to the court. A formally important institution like the Ministry of Commerce, although headed by leading Hijazi merchant Mohammad Alireza, proved to be largely powerless.

As far as institutions mattered, their day-to-day operations were often carried out rather autonomously. The administrative sprawl and personalized nature of authority meant that coordination between agencies was largely lacking, with different institutions often producing directly contradictory decisions and jurisdictions remaining unclear. As early as 1952, six different entities were supposed to be in charge of economic planning.

State-society relations: mobility and local clientelism
While the formal state was still small, unorganized and self-absorbed, its combination of growing resources and institutional fluidity meant that it offered great chances for the rather small number of those who were in the right place at the right time. Access to the expanding court with its growing needs for material supplies from the 1940s on offered great opportunities of social and economic mobility and influence-peddling. Many of the big Saudi merchant families established their privileged positions as suppliers to King Abdalaziz, some of them being granted exclusive trade agencies by the king which they still hold today. Players from the Jomaih, Rajhi or Juffali families made their first appearance at the time, often emerging from rather humble Najdi background (Jomaih e.g. was the grocer of the king from the village of Shaqra, Rajhi a money-changer in the Riyadh suq). Several of the advisors of the king and their offspring also used their positions to venture into business, including the Pharaon and Khashoggi families.

In a related pattern, auxiliary positions at the court could be the starting point of public service careers. Abdallah bin cAdwan for example worked his way up to head of the important Ministry of Finance branch in the (oil-rich) Eastern Province without any formal education, thanks to the intervention of then Crown Prince Saud, whose bodyguard he had been. Id bin Salem moved from being a mechanic to head of the royal garage and one of Saud’s leading advisors. Interpreters Abdallah Tariqi and Mohamad Ibrahim Mascud (the latter with the US embassy) would become Minister of Oil and Minister of State respectively.

Abdallah Sulaiman’s empire: mobility of commoners
It is the Najdi Sulaiman Al-Hamdan family which probably has combined both patterns – merchant and bureaucratic mobility – most masterfully. Their story colourfully illustrates the contingent, personalized and fiefdom-like trajectory of early institution-building as well as the great associated opportunities of clientelism.

Abdallah Sulaiman was a Najdi of humble background who worked his way up from clerk to first Saudi Minister of Finance and close confidant of Abdalaziz. Until the early 50s, Sulaiman’s Ministry combined an inordinate range of administrative duties, its subordinate departments including health, public works, education and agriculture. Their workings usually were opaque and left great scope for patronage. The Ministry was well-known for its “widespread system of letting contracts on a basis of personal favoritism rather than expected performance and cost”.

At the MoF-affiliated customs, Ottoman-inspired clearing procedures involved up to 30 different signatures and kickbacks were common. A British diplomat commented sardonically that “The Director of Posts proudly proclaims that he had British training. There are naturally Saudi improvements on this; the postage stamp clerk, for instance, will take the money for letters and stick the stamps on later; after eighteen months in the job he can build himself a large house.”

Sulaiman himself, based in Jeddah, was given large administrative discretion by the king. His brother Hamad and his son Abdalaziz were vice and deputy minister respectively, the higher rank for his brother being created specifically for him (it still exists today). Apart from profiteering activities, Hamad was reported to be largely inactive.

Sulaiman had started to procure government supplies through figureheads in the 1920s, and his friends among the merchants lent him money without interest, which was in turn used to purchase goods for the court for inflated prices. He was given the lucrative cement franchise for the Hijaz in the late 40s. Sulaiman owned palaces and large tracts of land, and had his own entourage of some 400 people. After retiring in 1954, he ran hotels and a number of trading companies. His descendants still are among the prominent merchants of Jeddah.

Several big businessmen were “made” or at least boosted by the MoF at Sulaiman’s time, including some who served under him. The case of Hasan Sharbatli is perhaps the most colorful example of how upstart clients could rapidly gain status and wealth. The diplomatic note on him bears a lengthy citation:

“Climaxing a rags-to-riches career illustrative of the fluidity of Hejazi mercantile society, Hasan Sharbatli, Jidda merchant and public benefactor, recently received from the King the title of Honorary Minister of State,” making him the ninth of this kind. The title “implies no necessary assumption of government powers…Sharbatli, who only ten years ago was a fruit-vendor and small-time auctioneer in Jidda, reportedly gained entry into the favored circles of the Ministry of Finance by sending to Hamad al SULEIMAN, brother of the minister, a gift of fruit. So pleased was the recipient that he recommended the appointment of Sharbatli as Government Purchasing Agent.

In this capacity, Sharbatli evolved an eminently satisfactory relationship with the government. Selling a hypothetical 5,000 riyals worth of fruit, he would then bill the Ministry for 50,000 riyals and subsequently share the profits with his sponsors in the Ministry.”

Sharbatli accumulated a total reported credit of 43 million Saudi Riyal with the government. Unable to encash the debt for himself, Sharbatli became one of the biggest charitable benefactors in the kingdom, recovering some of the sums for this purpose. He had become one of the richest men in the kingdom, had a virtual monopoly on pilgrim travel and had reportedly given 500.000 Riyal for the establishment of the Saudi Air Force. He also set up his own bank. Sharbatli’s case illustrates that, although the royal family was clearly at the center of the polity and of state growth, more or less random networks of commoners within and around the administration had great distributional leeway and offered great mobility at an early stage – and the chance to position oneself for later decades.

The story of Sulaiman himself however also demonstrates how the local power of commoners in the final analysis depends on royal patronage: The minister was a favourite of King Abdalaziz, but not of his sons Saud and Faisal. Sulaiman and his family left the Ministry one year after Abdalaziz’ death.

External advisors and islands of efficiency: SAMA
Before that, however, Sulaiman had rather surprisingly got involved in probably the most significant attempt at administrative rationalization in the 1950s: the creation of the Saudi Arabian Monetary Agency (SAMA). In the early 50s, monetary chaos reigned in Saudi Arabia. Interested in minimal economic stability, the US embassy and Aramco successfully lobbied with the king to accept US consultants into the kingdom.

US advisor Arthur Young managed to convince Sulaiman and the king of the need for basic monetary and banking regulation. Young was mandated by the king to draw up a charter for what was to become SAMA within a few hours. SAMA would derive its income by charging the government for its services. Its first head was also an American, and accountants were hired from Lebanon.

King Abdalaziz and Sulaiman had been convinced of the existential need for institution-building in this strategic sector. SAMA charter and use of expatriate technocrats bolstered the relative independence of the body. After temporary sidelining of SAMA by the MoF, in 1957 the governorship was taken over by another expatriate, Anwar Ali, who had come to the country with an IMF mission and who was to hold the post as a confidant of King Faisal until his death in 1974. Different from other “fiefdom ministries”, SAMA’s well-paid leadership would use its relative autonomy and Abdulaziz’ and Faisal’s clear reform mandates to become one of the best central banks in the Middle East.

Analysis: a state created above society
Whatever the specific outcomes, the early Saudi bureaucracy was clearly created through relatively unconstrained elite decisions. Before discussing how these decisions congealed into a more permanent distribution of institutions and power, it is theoretically rewarding to shed some light on this puzzle: Why could the diverse sprawl of Saudi institutions in the 1950s happen in such an unencumbered way, with developmental needs of society often taking a back seat?

After all, despite increasing oil production, the national income was still extremely small by standards of modern statehood. However, the aggregate societal demands on it were even smaller: Saudi society, based on an economy which in most regions barely provided for subsistence needs, was unprepared for the riches. Most politics was local as people were ruled through the Al Saud’s tribal or notable intermediaries. The kingdom knew no public space to negotiate over national budgets, which were fed externally and grew rather suddenly.

There were no coherent classes to voice demands towards the government. Merchants were quickly tied up in patronage structures, just as tribes were co-opted through royal subsidies, without much modern state infrastructure interfering or being demanded. There was no working class – with the exception of Aramco workers in the Eastern Province, whose demonstrations were harshly repressed in the 1950s.

The specific social and political structure of Saudi Arabia gave its political elite large temporary autonomy – in this specific regard confirming rentier theory. The new external income left much space for the individual patronage interests of state actors, and for distribution and institutional design to be negotiated within the state. Much of the modern state was originally created above society, following its own peculiar logic of fiefdoms and their lateral sprawl. In the 1950s, Aramco and the US embassy were probably the most significant lobbyists for bureaucratic rationalization in the kingdom, ahead of all domestic groups.

The emerging bureaucratic order under Faisal
Faisal’s order by cabinet
US pressure was largely ineffective under Saud, with politics and institutional change following elite dynamics as described above. It was under Faisal that some degree of order was brought into the government apparatus, as is explained in the following section. But again, this was at least as much driven by royal family politics as by perceived development needs. Faisal’s struggle with Saud was at its apex between 1958 and 1962, and it was in this period that institutions were reshaped most dynamically, with the power interests of the Faisal faction eventually prevailing. After 1962, a stable balance of elite forces combined with bureaucratic growth and regularization led to the “locking in” of personal and institutional constellations at the core of the state.

Some of the institutional balancing games between Faisal and Saud in the field of security organization have already been adumbrated. After 1958, the struggle between the two brothers went deeper than that, however: The core of what the Saudi state was to be was at stake in the conflict, with fundamentally different institutional concepts deployed by both players, reflecting the fluidity of Saudi governance structures at the time.

The Saudi drive for political order began with a May 1958 decree which enhanced the status of the Council of Ministers, with Faisal as Prime Minister. The reason was that a coalition within the Al Saud had pushed for enhancing Faisal’s standing against Saud, who was, among other things, perceived to be favouring his sons over his brothers and incapable of handling the state budget, which was in severe deficit.

The decree gave the Council of Ministers the final authority in financial matters. The king could return decrees to the Council, with further steps kept ambiguous. Although a step towards formal government, the May 58 institutional redesign most of all reflected a temporary personal balance of power between Faisal and Saud, as Saud was to remain king and Faisal responsible to him.

Institutions at the very core of the state were pliable weapons in the struggle. Saud as king with a court had larger quasi-traditional, patrimonial resources at his disposal and used those to increase his following through royal hand-outs and tours through the country. Faisal, conversely, promoted more modern institutions of rule to boost his otherwise inferior standing, trying to curtail the royal budget and enforce cabinet rule. There was no superior constitutional (or societal) framework to contain the struggle to be fought out within given institutions.

The brothers’ attitudes towards institutions could be quite instrumental, a point vindicated by the institutional track record of the two protagonists: In 1959 Saud reportedly planned creating a Consultative Council with 120 members, including tribal representatives, ulama and members of the Al Saud. It would take over some responsibilities of the Council of Ministers and hold legislative power.  It very much looked like an attempt of Saud, at that time in the defensive, to regain territory, as the king would appoint the Majlis. It is striking that supposedly “traditional” Saud would forward such a relatively progressive concept. Conversely, Faisal was very reluctant to give up his traditional post as viceregent of the Hijaz, although that hampered homogenization of the national administration in Saudi Arabia. He used the post as a bargaining chip to attain the premiership. If politically expedient, Faisal could hamper bureaucratic rationalization.

Conversely, Faisal’s build-up of bureaucracy was completely centred around his person. Until Saud temporarily regained power in 1960, Faisal achieved a certain separation of state and royal family affairs and a degree of budgetary control and monetary modernization with IMF assistance. This he accomplished through stark centralization of authority, however. In addition to being Minister of Foreign Affairs and Finance, in April 1959 he also took over the Interior portfolio. Although this enabled Faisal to exert more control over regional fiefdoms of other princes, it created a bottleneck of decision-making. Liberal Saudis, although sometimes conceding that Faisal stuck to formal rules more clearly than Saud, deplored such over-centralization.

The Council of Ministers was, most of all, an instrument for Faisal to gain power through the post of Prime Minister. It is true that after Saud’s fall from grace in 1962, it improved policy coordination somewhat – not least because the royal diwan as parallel political actor had disappeared. Faisal was generally willing to devote more time to the formal workings of government, seeing a degree of budgetary control and more clearly defined administrative units as instruments of stability. Most of his reformist ambitions beyond the establishment of basic order petered out soon after Saud had been stripped off all powers in 1964, however. In a period of regional turmoil, Faisal was interested in stability, not rapid development.

Consolidation of fiefdoms: the 1962 cabinet deal
Throughout the 1960s, the Saudi budgets once again continued to expand – quadrupling within less than a decade –, and the bureaucratic apparatus grew with them. Ministries of Petroleum, Hajj affairs, Labour and Social Affairs and Information were created between 1960 and 1963. After 1963 and until the oil boom, however, the growth of the budget implied growth of existing institutions rather than creation of new ones. The expansion of a number of fiefdoms would continue, but in a much more orderly manner.

The cabinet which had emerged in October 1962 had become the gravitational center of Saudi politics and represented a post-Saud distribution of power which grew increasingly immovable. It was based on a stable balance of forces within the Al Saud and was the end result of the Saud-Faisal struggle. Faisal kept the post of prime minister, which he would combine with the kingship from 1964 on (a combination all his successors have adhered to). Faisal’s senior allies in the conflict were rewarded with ministerial posts: Fahd and Sultan, young and “modernizing” supporters, were given the portfolios of Interior and Defence, respectively.

Sticking to established patrimonial patterns, they brought in full brothers as deputies in subsequent years. Sultan has kept his ministry ever since, while Fahd handed his portfolio over to his younger brother Nayef when becoming Crown Prince in 1975. Prince Abdallah, another ally of Faisal, was given cabinet status and control of the National Guard in 1963, which he again kept until today. In 1967, the special post of “second deputy prime minister” was created for Fahd, underlining his ambitions to be next in line after his older half-brother Khaled, a moderate figure whom Faisal had made crown prince for reasons of seniority and intra-family balance.

All of the major princes embarked on the expansion of their institutions, which became irreducibly identified with their person. Growing budgets allowed for ambitious programs, most remarkably among them Sultan’s expansion of the Saudi air force in the 1960s. Staff numbers, business opportunities and networks of gatekeepers, brokers and business partners expanded concurrently. As the Ministry of Defence was organized around Sultan (and to a lesser extent his full brother deputies), all of its organizational units were oriented towards him as central authority. Armed services and Ministry itself hence cooperated little.

Similarly, Abdallah was the figure around which the National Guard was organized concentrically. Foreign specialists assessed the Guard’s chains of command as ill-defined and over-centralized. As the Guard was also a government agency, the presence of civilians in its headquarters, accountable only to Abdallah, decreased its administrative coherence.

Faisal and the civil service: slow regularization
Beyond the “sovereignty ministries”, most of the other posts in the 1962 cabinet were controlled by commoners, as Faisal strove to limit the number of princes in the cabinet to make it manageable – another pattern which would become “locked in”, as most of the cabinet posts reserved for non-royals then have been held by commoners until now.

A stable distribution of power did not automatically mean integrated government. Under Faisal the Saudi administration still suffered from enduring problems of over-centralization and lack of coordination between agencies. As institutions grew in parallel, functionally similar bureaucratic units reported to different ministries, and duplication and conflicts of authority were endemic. As all actors were oriented towards Faisal, there was little horizontal communication of commoner bureaucrats, while Faisal’s brothers were busy building their fiefdoms. The phenomenon of “paper agencies” persisted, e.g. when a Ministry of Justice was decreed in 1962 but not actually set up until 1971. All good intentions of development planning got lost somewhere between agency conflicts and an insufficient data base. The Central Planning Organization, set up in 1964, had little leverage over other ministries during most of the 1960s, and several ministries never submitted their financial reports to the Ministry of Finance.

However, different from the sprawl of the state in the 1950s, there was a clear regularization of bureaucratic growth – both in terms of stability of the overall set-up and of internal bureaucratization of institutions. The set-up became less fluid.

Although facing an acute shortage of qualified administrators, Faisal managed to assemble some good commoner ministers around him, which might explain that at least some decisions were carried through. “Elsewhere”, as one UK diplomatic source explains, “as so often in developing countries, it [was] the bureaucratic bindweed that [took] root and proliferated most quickly, its function being to choke decision and action.”

The “bureaucratic bindweed” however did go along with institutionalization of the civil service, making for gradual institutional consolidation. Faisal achieved a discernible rationalization of the bureaucracy. As early as June 1958, a royal decree was issued reforming the civil service. It clarified the classification of employees, salary schedules and criteria for hiring and terminating employment. The use of public offices for private gain was prohibited and severe penalties threatened. Private business activities of bureaucrats were very common at the time, and the Americans rated the decree as a serious attempt by Faisal to decrease malpractice.

To be sure, overcoming the shortage of qualified and committed personnel was an uphill struggle in a grossly undereducated society. In the early 1960s, the Institute of Public Administration (IPA) in Riyadh was set up with international assistance and imparted basic administrative skills on increasing numbers of Saudis. Having to start almost from scratch, its impact was only gradual. At the end of the 1960s, the pool of skilled administrators was still very small and recruitment often based on nepotism. Many bureaucrats were involved in business interests tied to their respective agency. Absenteeism was rampant, and attempts by a large Ford Foundation consultancy mission in the 1960s to create a merit-based public service did not yield significant results, as the “Central Personnel Bureau” proved unable to break into the turf of other ministries.

Faisal’s own commitment to orderly and rule-bound administration should not be overstated. In his context, he was austere, but that did not mean that he did not have his own trustees, brokers and business clients whom he would pay off through various ways. The Alireza family, close to Faisal since his time as Hijazi viceregent, was amply supplied with defense-related contracts. Princes from Faisal’s own family branch were heavily involved in business. Although the clientelist distribution of budgets and deals was relatively well-controlled under Faisal, his rule was no exception to the basic pattern.

Still, all nepotism and clientelism occurred within a progressively bureaucratized institutional setting, whose main components and cleavages did not change fundamentally after the early 1960s. The 1971 comprehensive civil service law led to further consolidation of bureaucratic rules and clearer formal concepts of salary scales, seniority and hierarchy. The Institute of Public Administration augmented its profile under the leadership of Abdalaziz Quraishi in the late 1960s, and increasing numbers of foreign-trained Saudis entered public service. The internal structures of agencies, though still fluid in many cases, were much better defined and permanent than ten years earlier.

The bureaucratic immortalization of fiefdoms in the 1970s
When the Saudi system entered its final and dizzying phase of expansion after the 1973 oil boom, this expansion happened much more orderly and based on existing institutions than that of the 1950s. Paradoxically, bureaucratization and state growth also led to the entrenchment of existing fiefdoms in the boom – the final phase of state growth.

The defence budget, usually above one quarter of overall state expenditure, allowed Prince Sultan to expand his ministerial fiefdom to a full “state within a state”, attaching large-scale housing, health and educational infrastructure to his ministry. The biggest of Sultan’s “military cities” in the Northern periphery of the kingdom was supposed to house 70.000 persons alone. While the Saudi military was gradually formalized, all organizational units of the ministry remained organized around Sultan as central authority, hampering communication between them.

The National Guard under Abdallah developed similar structures on a smaller scale, having its own “cities” and parallel housing, education and health systems. The Ministry of Interior under Fahd and Nayef, dubbed a “rule unto itself” by a seasoned British diplomat, also built up its own infrastructure.

All of the major fiefs conferred enormous patronage power to their heads, through the sheer scale of employment, the provision of select services and numerous business contracts of various sizes. Considerable parts of society were drawn into the orbit of the big government agencies as clients in one form or another.

The dynamics of growth would often reinforce segmentation: Ministry of Defense, National Guard and Ministry of Interior seem to have seen repeated competition over budget allocations, and there was a persistent overlap in security functions. The autonomous power of senior princes meant that they would ignore budgetary rules in their procurement, undermining coherent economic planning. The parallel build-up of independent housing and health services prevented integrated sectoral policies. The parallel power bases of princes would make national decision-making and, on a lower level, day-to-day policy coordination more difficult.

Segmentation was reproduced on a smaller scale among agencies headed by trusted commoners. Due to the underdevelopment of general infrastructure and public services, agencies under conditions of fiscal abundance strove to create their own services to be able to develop autonomously. Institutions would function in more predictable and formal ways than in past decades; the civil service law was refined in 1977 and a further empowered Civil Service Bureau created. However, the persistent hierarchical orientation of various agencies meant that they often coordinated little in policy and budgeting matters. In the process of rapid growth they would acquire their own vested interests – and typically, their own housing and other infrastructure annexes, and in at least one case, their own TV studio and gas station services.

However, similar to the case of SAMA in the 1950s, further state expansion in the 1970s and early 1980s also allowed for some new islands of efficiency to emerge, staffed by the most promising technocrats and given relative autonomy from the rest of the civil service. These include the Saudi Ports Authority, the Saudi Arabian Basic Industries Corporation and the Riyadh Development Authority. Although the core structure of state and regime remained unaltered, the oil boom still allowed for new institutional creations on a technocratic level, offering great mobility to aspiring administrators, some of them successfully co-opted into the system despite their originally leftist leanings. Similarly, the boom was the last time when new big business names were added to those that had emerged in the 1950s, most saliently that of later Lebanese Prime Minister Rafiq Hariri, who became a billionaire construction magnate under the patronage of King Fahd.

Mobility closure and congealment
The institutional fluidity of the 1950s and 1960s and the enduring mobility in the 1970s and early 1980s stand in sharp contrast to the stasis and mobility closure since the mid-1980s: Since the end of the boom, the expansion of the Saudi state has largely stopped, and with it change and mobility within the system. The institutions created since the early 1950s have congealed into a permanent set-up – through bureaucratic formalization and resource constraints, but also through the sheer size and scope of the state.

Some well-known facts suffice to illustrate how the end of the boom has brought and end to the internal dynamic of the Saudi system: Not only have all the leading princes clung to their posts (until death in the case of Fahd), but Saudi business has seen very few big newcomers since the oil bust in 1986. The turnover of technocrats in the cabinet has decreased markedly, with their average age strongly increasing.

There has been little change in the set-up of government agencies, which have proven to persist once they had grown. The socio-economic entitlements created through state growth seem to have fettered the once so autonomous system, with the wage bill steadily increasing as share of public expenditure between the early 1980s and the late 1990s. As more social groups have been tied to the state through the formalized clientage of employment and service provision, the government, it appears, has become increasingly immobile, largely incapable or unwilling to impose cuts on the public payroll and subsidized public services. The stickiness of bureaucratic employment prevents institutional re-engineering. Policy in the last 20 years has been limited mostly to “putting out fires”, with few grand initiatives.

For those who know the modern Saudi bureaucratic behemoth, its unmovable institutions and administrative stasis, the great fluidity of early years as traced in this article is hard to imagine. The modern Saudi bureaucracy was created in the 1950s and early 1960s by an elite which was largely unconstrained by society or established bureaucratic structures.

The rapid, personalized creation of government institutions happened in a completely top-down fashion and in a relative political vacuum. Political agency and voluntarism determined state formation at least as much as the development needs of Saudi society did. The Al Saud laterally expanded into a state apparatus which was most of all geared upon their internal distribution of power. The rapid shifts in institutional design reflected the unique autonomy of the early Saudi rentier state and its role as playing field for intra-elite balancing games.

Saudi bureaucracy-building often seems to be a case not of “form follows function”, but of “form follows family”. Institutional reforms often were instruments in an intra-elite power game as much as attempts to modernize the state. Where Yizraeli sees primarily a clash between different ideologies of rule and development between Saud and Faisal, the present account adds a rather more instrumental view of institutional initiatives by both players, with institutions as flexible tokens of power.

Shifts in state autonomy
Rentier state theory posits state autonomy as a result of external state income. As far as autonomy is a useful concept at all, the present historical analysis of Saudi institutions indicates that it is not constant over time: Early state autonomy seems to have been uniquely large, and political agency determined structures of rule. In later years, conversely, the weight of established structures has taken away much of the political and distributional leeway the Saudi elite used to have. The rentier argument that external revenues gives state elites free reign – at least in underdeveloped states with relatively cohesive elites– seems to make much more sense in early phases of state-building and, to a lesser degree, while the expansion lasts. Similar patterns may be at work in other rentier states: Frequent shifts in alliance and redesigns of the fledgling Omani state under Qaboos in the early 1970s e.g. have given way to more static development in subsequent decades.

Path-dependency of institutional design
Many of today’s permanent features of the Saudi state can be traced back to early contingencies and the crucial juncture of 1962. Civil Aviation’s attachment to the Ministry of Defense, the Vice Ministry of Finance, the large size of the National Guard, the omnipresent role of the Ministry of Interior – all are outcomes of the politics of the day which happened to be perpetuated by bureaucratic growth and/or agreements to maintain a given power balance. Similarly, the composition of significant parts of the Saudi private sector is an outcome of often chance encounters which happened many decades ago. The expanding Saudi rentier state provides powerful examples of “path-dependency”, the idea that relatively small early events can have a strong influence on subsequent structural developments.

More than any other event, the 1962 cabinet deal shaped the face of Saudi politics for the subsequent half century, but it also appears somewhat contingent in retrospective: There were e.g. reported offers by Saud to make Fahd his prime minister, which the latter rejected. Had Fahd accepted, Saudi Arabia and its institutions of governance would look much different today. There were also rumours that Mohammad bin Abdalaziz, an irascible older brother of Fahd, could be made Minister of Finance, which again would have changed the balance of power – and quite likely, institutions – tremendously.

Instead, sober Minister of Finance Prince Muscad bin cAbdalrahman controlled the fisc and helped to limit the intrusion of royals into the state. Although this policy was loosened under Fahd, Faisal’s decision to largely keep princes out of technocratic cabinet posts 1962 established a pattern which has been perpetuated until today – different from other GCC states with large ruling families, which tend to have princely Ministers of Finance, Oil and Commerce.

Path-dependency of state segmentation
Regularization and growth of the bureaucracy helped to reduce the fluidity of administrative structures, increasingly limiting change to the lower rungs of the state and entrenching senior office-holders within an established power balance. It also helped to deepen the fiefdom character of certain institutions which dominate the Saudi scence today.

Ironically, in the first place it had been the lack of clearly defined bureaucratic hierarchies which tended to give institutions the character of personal courts and enabled small-scale empire-building. With formal procedures under-defined, ministries were frequently used for patronage and to recruit allies – not only by royals, but also by well-positioned commoners, several of whom left their mark on the Saudi state.

As the state grew more complex and the Al Saud delegated authority only in specific institutional contexts, the fragmentation of the state did not disappear, but was often consolidated through bureaucratization. While Faisal’s over-centralization persisted, agencies often kept their island character, communicating mostly vertically.

Again, many institutional idiosyncrasies of Saudi Arabia would not be thinkable without rent surpluses that allowed institutional sprawl and costly redundancy. In a starkly contrasting example from an originally quite similar country, John Davis has argued that oil rents in Libya allowed for the experiment of abolishing significant parts of the state. What these two most different oil states seem to demonstrate is that rents can most of all allow for unusual, possibly dysfunctional institutional experiments – without predicting what these will look like.

Approaching rentier states from this angle, the focus is once more on contingency and voluntarism, which are in turn crucial to understand the internal heterogeneity of the Saudi state: Oil income has in some cases has allowed for the creation of very efficient bureaucratic islands – SAMA et al, where select commoners played crucial roles –, but in others has boosted neo-patrimonialism. As long as the system expanded, oil created great leeway to do design institutions freely and in very different ways. Generalizations about the nature of the state are hence difficult: As political agency intervenes, rents do not automatically create inefficiency and corruption.

Sarah Yizraeli contends that the management of family politics through handing over control of functionally differentiated formal institutions to senior royal players is more modern that the old patrimonialism under Ibn Saud and his first successor, centred mostly on the king’s court. As soon as individual formal posts become royal fiefs of their own, this judgment might be questionable. The paradox of Saudi state development is that modern, differentiated bureaucracy and royal patrimonialism have grown concurrently.