This paper presents a fresh discussion of the political “opening” in Algeria from the analytical and interpretive perspective of political economy. It is premised on the assumption that a transition from a totalitarian, authoritarian system to a democratic system presupposes a transition from a rentier economy tied to foreign markets and controlled by rentier constituencies to a productive economy based on the national bourgeoisie’s exploitation of local labour to create wealth. Based on this premise, the paper argues that the democratic transition in Algeria stalled because rent-seekers thwarted the transition to capitalism that would have allowed the rise of two key factors in the democratic equation: the bourgeoisie and the working class. The political elite controlling the rentier economy would have accepted political reforms, but not the economic reforms that could reconfigure hegemonic relationships within Algerian society and liberate that society from the regime’s grasp. The scuttling of the economic reforms set in motion by the Hamrouche government (1989–1991) were a prelude to thwarting the democratic transition and preventing the evolution of both a civil society capable of carving out its independence from the state and an Algerian state independent of the global market.