Taxation is often described as the cornerstone of state-building, institutional accountability, and modern citizenship (Tilly, 1990; Levi, 1988). In rentier states, the government derives a substantial portion of its revenue not through domestic taxation, but from external rents such as oil exports. As a result, the traditional link between taxation and political accountability has historically been absent or severely weakened. Nowhere is this dynamic more evident than in the Gulf Cooperation Council (GCC), where monarchies have long maintained political stability and regime durability without direct taxation. This reflects the rentier state model described by Mahdavy (1970), in which economies depend largely on “rents paid by foreign individuals, concerns or governments,” and is consistent with Ross's (2001) observation that oil-dependent regimes use low tax and patronage systems to dampen democratic pressures.

But this model has recently faced pressure like never before. A series of global oil price collapses in 2014–15 and again in 2020 significantly reduced state revenues across the Gulf. In response, all six GCC member states signed a regional agreement in 2016 to introduce a value-added tax (VAT) at a standard rate of 5 percent. This move represented a significant break from the Gulf’s long-standing rentier approach. Saudi Arabia and the UAE were the first to implement VAT in early 2018, followed by Bahrain in 2019 and Oman in 2021. Qatar and Kuwait lagged behind but have since pledged to introduce the tax as well.

Saudi Arabia offers the earliest example of VAT implementation in the Gulf. It introduced a 5% value-added tax in January 2018, becoming the first GCC country to operationalize the 2016 regional tax agreement. In July 2020, amid intensifying fiscal pressures from falling oil revenues and the COVID-19 pandemic, the Saudi government tripled the VAT rate to 15%. Despite the sharp increase and broader austerity measures, the country witnessed no significant public protest in response to the tax reform.

This contrast raises a central empirical puzzle: Why do some rentier states experience protest after tax reform while others, under similar fiscal and structural conditions, do not? Both Oman and Saudi Arabia are absolute monarchies with limited avenues for political participation. Both adopted VAT under the same regional agreement, with comparable subsidy cuts and economic downturns. Yet their public responses diverged dramatically.

Existing frameworks offer important insights but fall short in explaining this variation. Rentier state literature focuses on how low taxation in resource-rich economies weakens the development of representative institutions and citizen demands (Mahdavy, 1970; Ross, 2001). However, it remains largely agnostic about what happens when taxation is introduced in these contexts. It does not account for why similar tax reforms trigger mass protests in some rentier states but not others.

These gaps point to the need for a more context-sensitive understanding of how citizens in authoritarian rentier states interpret and respond to tax reforms. In contexts where formal opposition channels are limited or suppressed, protest is not merely driven by grievance or regime structure. Rather, it often depends on how the broader political climate is interpreted, especially through signals sent by actors within the regime. This paper proposes that a key explanatory factor is the visibility of intra-elite division. In centralized authoritarian settings, where opposition parties are weak or nonexistent, citizens frequently rely on elite cues to infer the regime’s internal strength and openness to dissent (Kricheli et al., 2011; Truex, 2016).

When senior officials publicly oppose or distance themselves from unpopular reforms—such as tax hikes or subsidy reductions—through actions like resignations, dissenting votes, or outspoken criticism, they can lower the perceived risks of protest and confer greater legitimacy on collective action. In rentier autocracies, such elite signals are especially influential, as most citizens lack access to independent sources of political information.

In these contexts, institutions that typically inform public opinion—like opposition parties, free media, and civil society groups—are weak or altogether absent. The state dominates both the distribution of economic benefits and the narrative around political developments. Most people rely on the government for jobs, welfare, and subsidies, and have few institutional means to voice dissatisfaction. As a result, they often interpret the political climate not through public deliberation or electoral contestation, but by watching the behavior of those within the ruling elite.

Visible splits among elites offer rare and meaningful insight. They may signal fractures in regime cohesion, the presence of internal allies, or potential limits to repression. For citizens in environments where protest carries high risks and uncertain outcomes, such cues can recalibrate expectations about whether mobilization is worth the cost. By contrast, when elites close ranks and internal dissent is invisible, protest appears more dangerous and less likely to succeed. In such situations, even deeply unpopular reforms tend to provoke quiet acquiescence rather than public resistance.

To test this argument, the paper conducts a qualitative most-similar case comparison of Oman and Saudi Arabia. Both countries share core structural traits: absolute monarchical rule, heavy reliance on oil revenues, and participation in a regionally coordinated VAT initiative. Yet their post-reform protest outcomes diverged sharply. By analyzing the timing, tone, and public visibility of elite reactions to fiscal reform in each case, the study examines how internal regime signaling shapes popular perceptions of risk, legitimacy, and the boundaries of dissent during moments of economic strain.

In doing so, the paper contributes to broader discussions on authoritarian governance, political communication, and the changing nature of the state society relationship in resource rich autocracies. As the economic foundations of rentierism grow more fragile in the face of global energy transitions, these regimes will be increasingly forced to raise domestic revenues. Whether this shift leads to stability or unrest may depend less on the act of taxation itself than on how rulers present and manage the political process that accompanies it. The choreography of elite consensus and dissent, in other words, may determine the political price of fiscal reform.

Research on tax related protest in authoritarian contexts and rentier settings has developed along several key lines, yet important gaps remain. Existing studies offer useful insights into when and why citizens mobilize in response to new taxation, but they fall short in explaining variation in protest occurrence and intensity across states that share similar fiscal structures and implement comparable tax reforms. This review organizes the literature around three major theoretical perspectives that have been commonly used to explain protest behavior: the political opportunity structure framework, economic grievance models, and approaches that focus on the institutional logic of rentier states. The discussion then identifies areas that remain underexplored, particularly the role of elite signaling and the visibility of tax burdens, which this study aims to examine more closely.

According to political opportunity structure (POS) theory, protest behavior is shaped by the broader institutional and political environment. More fragmented or internally divided regimes provide openings for mobilization, whereas cohesive and closed regimes reduce political space for dissent (Tarrow, 1998; McAdam, Tarrow, & Tilly, 2001). Scholars such as Kitschelt (1986) and Kriesi (1995) have extended POS theory to semi-authoritarian contexts, arguing that temporary cracks in elite cohesion—such as policy disputes, divided security forces, or elite defection—can trigger protest even in repressive states.

Recent scholarship has increasingly highlighted the importance of elite cues and public signaling in authoritarian contexts. Kricheli, Livne, and Magaloni (2011), for instance, argue that visible elite divisions can lead citizens to perceive the regime as weakened, thereby increasing their willingness to protest. Likewise, Slater (2010) underscores elite cohesion as a key pillar of authoritarian stability. Yet despite these insights, most applications of political opportunity structure (POS) theory have focused on elections or regime transitions, with relatively little attention paid to how elite fragmentation shapes responses to fiscal reforms in rentier settings.

A second approach attributes protest to material hardship, often arising from macroeconomic shocks, price spikes, or reductions in subsidies. These models find that downturns and austerity often precede mass unrest, particularly in weakly institutionalized states (Brückner & Ciccone, 2011; Aidt & Jensen, 2009). More recent studies have specifically linked tax and subsidy reform to political instability. For example, Paler (2013) uses experimental evidence to show that when citizens are made aware of taxation, they become more likely to demand accountability and are more inclined to protest.

Yet much of the existing literature treats taxation as a binary phenomenon—examining whether taxes are adopted, rather than distinguishing between different types (e.g., VAT vs. income tax), structural features (e.g., regressive vs. progressive), or levels of visibility. This limits the explanatory power of such models, especially when it comes to consumption taxes like VAT, which are not always immediately noticeable to consumers unless made politically salient by elites or the media. In addition, while many studies assume a straightforward link between economic hardship and protest, they often neglect the political and informational contexts that shape whether and how grievances translate into collective action.

The rentier state framework explains how governments in resource rich countries maintain political control without relying on domestic taxation. Instead, they finance state expenditures through external sources such as oil exports, which reduces the need to extract revenue from citizens (Mahdavy 1970, Ross 2001). In such contexts, the absence of taxation is often associated with weaker demands for political accountability, since citizens have limited financial stakes in government performance.

Scholars have noted that oil wealth allows ruling elites to postpone structural reforms, including the establishment of comprehensive tax systems, without facing immediate public backlash (Gause 1994, Hertog 2010). However, this body of work often treats rentier states as if they behave uniformly and assumes that introducing any form of taxation will provoke public resistance. This assumption fails to explain why some rentier states experience widespread protests after adopting new taxes while others do not.

Moreover, much of the literature does not distinguish between different forms of taxation or account for how visible or regressive a tax might be. It also overlooks how citizens come to interpret and politicize economic grievances. In authoritarian settings where institutional opposition is weak or suppressed, protest does not emerge automatically from hardship. Rather, signals from political elites may shape public perceptions about whether dissent is legitimate or risky. Despite this, the interaction between elite signaling and public responses to taxation remains underexplored. This study aims to address that gap by examining how the presence or absence of visible elite division influences protest outcomes following tax reform in rentier states.

Although research on taxation and protest in authoritarian regimes has expanded, important gaps remain. In particular, few studies have systematically explored how visible intra-elite conflict influences citizen perceptions and lowers the threshold for mobilization. While much of the existing literature emphasizes structural and economic drivers, it often neglects the role of elite signaling in shaping protest dynamics under authoritarian rule. This study addresses that gap by examining variation in protest occurrence and intensity following the implementation of VAT across Gulf rentier monarchies. It argues that visible elite divisions serve as critical political cues, informing how citizens interpret regime vulnerability and assess the legitimacy of dissent. By incorporating this factor into the analysis, the study refines the political opportunity structure framework and offers new insights into the conditions under which protest emerges in resource-rich authoritarian settings.

This study investigates why some Gulf Cooperation Council (GCC) states experienced mass protest following the introduction of a value-added tax (VAT), while others did not—despite similarities in timing, policy design, and regime type. In the context of highly centralized authoritarian rentier monarchies, I argue that this divergence is best explained by the visibility of intra-elite division at the moment of reform. When political elites openly express disagreement over tax policy—through dissenting statements, resignations, or public critique—they inadvertently create a political opening for protest by signaling cracks in regime cohesion and lowering the perceived risks of dissent. In contrast, when elites maintain a unified public stance, protest is far less likely to materialize, even amid comparable economic hardship.

In authoritarian settings, where opposition institutions are often weak, co-opted, or repressed, citizens frequently turn to elite cues to gauge regime stability, the legitimacy of policy shifts, and the potential risks associated with mobilization. When prominent elites publicly criticize or distance themselves from official positions, such signals can be interpreted as signs of internal discord, which may lower the perceived costs of protest or raise expectations of its success. This logic builds on political opportunity structure theory (Tarrow 1998; McAdam et al. 2001) and research on authoritarian signaling (Kricheli et al. 2011), both of which emphasize that protest is shaped not only by material grievances but also by how citizens perceive changes in the broader political environment.

To achieve a clear and comparable analysis, this study defines “elite” as non-royal actors who hold formal policy-making authority and maintain a visible public profile. Royal family members certainly wield influence across the Gulf, but their hereditary status makes it hard to separate personal views from the official line of the ruling house. Including them could blur the line between symbolic legitimacy and genuine policy dissent. Focusing on senior technocrats, cabinet ministers, and members of consultative councils therefore isolates the signals that citizens are most likely to notice and interpret when weighing the costs of protest.

In Oman, the relevant elite category consists of elected deputies in the Majlis al Shura, appointed members of the Majlis al Dawla, cabinet ministers and their deputies, and the chairs of parliamentary or ministerial committees who speak publicly on fiscal policy. In Saudi Arabia, it refers to cabinet ministers and deputy ministers, the heads of economic regulatory bodies such as the Zakat Tax and Customs Authority, and members of the Shura Council who participate in budget and tax deliberations.

Limiting the elite category to these non-hereditary figures ensures that dissent and unity are measured on the same basis in both countries, avoiding confusion between ceremonial authority and actionable policy disagreement.

H: Protests are more likely in rentier states following VAT implementation when intra-elite division is publicly visible.

This study argues that visible elite fragmentation plays a critical role in shaping protest outcomes following tax reforms in authoritarian rentier states. In political systems where formal opposition channels are weak or tightly controlled, citizens often rely on elite behavior to interpret the political environment. When influential officials publicly distance themselves from controversial policies—through resignations, formal statements, or expressions of dissent—such actions can signal internal regime divisions. These signals, if visible and credible, may alter public perceptions about the strength and unity of the state, reduce perceived risks associated with protest, and increase the perceived legitimacy of mobilization.

To examine this mechanism, the presence or absence of elite split will be analyzed through qualitative process tracing within each case. This analysis will draw on a range of publicly accessible sources, including media coverage, official government records, and social media content. Specific attention will be paid to events such as public resignations by high-ranking officials that cite disagreement with VAT or related fiscal reforms; official statements or interviews in which policy-relevant elites express criticism or concern; records of dissent voiced during formal proceedings of consultative bodies, such as Shura Council sessions; and documented episodes of elite defection or disassociation reported in credible domestic or international media.

Importantly, this analysis will focus not only on whether elite disagreement occurs, but whether it is both observable to the broader public and temporally linked to the timing of protest events. For elite cues to plausibly shape citizen behavior, they must precede protest onset and be clearly visible in the information environment. By tracing these signals within each country’s timeline of fiscal reform and unrest, the study aims to assess whether variation in elite behavior can help explain divergent protest outcomes across otherwise similar rentier states.

This study advances the core proposition that visible elite division increases the likelihood of protest following taxation in authoritarian rentier states. In political systems where opposition is weak or suppressed, citizens often rely on cues from influential elites to assess the risks and legitimacy of dissent. Public signals of elite fragmentation, such as resignations, critical statements, or legislative pushback, can create the perception that the regime is internally divided and less capable of unified repression. This, in turn, may lower the perceived costs of protest and increase expectations of success.

However, this mechanism does not operate in a vacuum. Elite fragmentation is only likely to trigger mobilization when economic grievances are also present, such as rising living costs or perceived regressivity of new taxes. Without such grievances, elite dissent may not resonate with the broader public. Conversely, material hardship alone is rarely sufficient to provoke protest in authoritarian settings, where repression is costly and mobilization is risky. In such cases, a unified elite front can prevent politicization of discontent, signaling regime stability and closing off avenues for public expression.

Thus, this study does not propose elite split as a singular or deterministic cause of protest. Rather, it treats visible elite division as a necessary catalyst that, under conditions of economic strain, enables grievance to translate into collective action. In contrast, elite unity functions as a suppressing mechanism, maintaining regime cohesion and raising the perceived costs of protest. This framework draws on insights from political opportunity structure theory (Tarrow 1998; McAdam et al. 2001) and authoritarian signaling literature (Kricheli et al. 2011; Truex 2016), and contributes to a more conditional understanding of dissent under authoritarian rule.

Together, these hypotheses contribute to a theory of protest that moves beyond conventional rentier state assumptions. Rather than treating taxation as inherently destabilizing, this framework emphasizes the political context in which taxes are introduced—most crucially, whether ruling elites signal unity or fragmentation. By analyzing how visible elite cues influenced protest outcomes in Oman and Saudi Arabia, this study underscores the importance of informal political signals in shaping citizen behavior under authoritarian rule. In doing so, it aims to refine existing understandings of dissent in rent-based regimes, where formal institutions may be weak but elite discourse plays a powerful signaling role.

This research project explores why public protests emerged in some Gulf Cooperation Council (GCC) countries following the introduction of value-added taxes (VAT), while others experienced no such unrest despite implementing near-identical reforms. I argue that variation in protest outcomes is explained by the presence or absence of visible elite splits—public, observable dissent among political elites regarding the fiscal reform. This logic draws from theories of protest risk calculation (Davenport 2007) and authoritarian responsiveness (Truex 2016), both of which highlight the importance of elite signaling in shaping citizen expectations and strategic behavior.

To investigate this hypothesis, I adopt a most similar case comparison design. The selected cases—Oman and Saudi Arabia—are both rentier monarchies that share a wide range of structural, institutional, and contextual similarities, which help control for potential confounding factors. Both are absolute monarchies ruled by dynastic families with centralized authority. Both lack meaningful political opposition, have tightly controlled media environments, and rank low on measures of civil liberties. Economically, both rely heavily on hydrocarbon exports, maintain expansive subsidy regimes, and experienced severe fiscal strain due to the 2014–15 oil price crash and the COVID-19 pandemic. Both states also adopted VAT as part of the same 2016 GCC-wide tax agreement and implemented subsidy cuts around the time of reform. By holding these factors constant, the design isolates elite signaling as the key variable that differs between the two cases.

Despite these shared conditions, only Oman experienced public protest after VAT implementation. In May 2021, roughly six weeks after the five-percent VAT took effect, small but persistent demonstrations emerged in Sohar, Salalah, Ibri, and Muscat. Protesters, mobilized through social media, denounced rising prices, job scarcity, and the new tax. In contrast, Saudi Arabia adopted VAT in 2018 and even tripled the rate in 2020 without triggering comparable unrest. The key difference lies in the visibility of elite dissent: Omani elites made public statements criticizing the policy, whereas Saudi elites maintained a unified front. This contrast offers a strong basis for isolating the effect of elite signaling on protest outcomes.

Although the research relies on a most similar systems design and does not estimate a statistical model, I still assign binary scores to the two key variables—protest occurrence and visible elite split—for three practical reasons that enhance the qualitative comparison. First, a clear rule for coding each variable ensures replicability. Second, it clarifies causal sequencing in the process-tracing timelines. Third, it allows the argument to be expressed in simple set-theoretic terms: split present and protest present in Oman; split absent and protest absent in Saudi Arabia. These binary scores serve only as analytical tools to structure the qualitative narrative and do not replace the detailed evidence regarding who dissented, what they said, and when citizens mobilized.

The dependent variable, protest occurrence, is coded as one when at least one VAT-related demonstration is recorded within six months of implementation, and zero otherwise. Event data are sourced from ACLED and triangulated with coverage from Reuters, AFP, and at least one national daily in Arabic or English. The independent variable, visible elite split, is coded as one when, prior to the first protest (in Oman) or before the six-month window (in Saudi Arabia), at least two independent sources document a public resignation, a dissenting parliamentary vote, or a senior official's public criticism of the VAT’s design or timing. Legislative records, official communiqués, and regional think-tank reports supply the necessary evidence.

To guard against reverse causality, the study employs process tracing by time-stamping each event and constructing an event timeline. Macroeconomic indicators—including Brent crude prices, pandemic-related spending levels, and IMF loan conditions—show that both states faced comparable fiscal pressures. Moreover, both governments engaged in parallel subsidy reductions and adopted austerity measures around the same period. Legal and coercive capacity is also similar: both countries used emergency laws to suppress protest in the past and implemented arrests and digital surveillance during the COVID-19 era. These controls ensure that neither economic hardship nor repression strategy accounts for the divergent protest outcomes.

By specifying a shared temporal frame, defining variables with transparent coding rules, sequencing events to test causal order, and systematically controlling for alternative structural explanations, the research design satisfies the core logic of a most similar systems comparison. The findings suggest that in rent-dependent autocracies, it is not taxation alone, but how elites publicly position themselves around reform, that determines whether citizens translate economic grievance into collective action.

This study has several limitations. The small-N design, focused mainly on Oman and Saudi Arabia, limits the generalizability of the findings across the GCC. The measurement of visible elite fragmentation relies on media sources, which may understate dissent in censored environments. Additionally, protest data may suffer from observability bias, particularly in highly repressive contexts like Saudi Arabia. The sequencing between elite signals and protest could be more precise, and the exclusion of royal family dynamics leaves out potentially important political factors.

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