After the collapse of Gaddafi’s regime in 2011, Libya has never been able to re-establish a central government capable of controlling the integrity of its territory. An in-depth study of the genesis of the Libyan state as an externally designed political entity, and the impact of an oil-based distributive economy on national unity is essential for a better understanding of the reasons behind a precipitated disappearance of the state apparatus. Politics in Libya have been shaped by foreign powers’ interventionist impulses, which do not serve “to induce social change or development but only to sustain local political power brokers and fuel local political competition” (Anderson, 2017, p. 247). Thereby, this research aims to analyse the impact of foreign intervention on the local aggregation of power and governance by answering the following questions: How have historical and social legacies altered the distributive state’s institutional options? How Libya's natural resources and geopolitical agenda motivates big and regional powers to foster internal divisions in Libya? The present study includes an historical analysis of the creation of a distributive state wearing a façade of a modern nation to better-fit virulent anti-imperialist aspirations of newly independent states in Africa and the Middle East after World War II. In fact, despite the seeming opportunism of its political elite, Libya, throughout its short history, was always compelled to correspond to the external powers’ ideological or economic expediencies. The Political Economy of Foreign Intervention and Rentier State theory are used in order to explain the causes of the post-Gaddafi persistent statelessness, and to analyse an eventual new regime negotiation under regional patronage. The hypothesis is that a distributive state, under an external patronage, is the most appropriate type of governance. An external political and military interference, although undesirable, can boost “the consolidation of regional fiefdoms” (Lacher, 2020, p. 197) in order to guarantee economic protection to various contentious groups. In fact, the security of social groups has to be built into the fabric of state institutions from the beginning “to provide citizens with concrete reasons to defend political order” (Yom, 2011, p. 239). The research concludes that a more equitable redistribution of oil-generated income enabled the rulers to establish a consensus among the Libyan population, which is still relevant in reducing the current fragmentation of the country. Oil-led development will eventually resume currently halted and reversed institutional and administrative development.