The global oil market and its associated booms and busts have generated a large literature in political science. One contention in this literature is that political instability is a near-certain, long-term outcome of oil wealth. Another line of argument maintains just the opposite, that oil makes authoritarian regimes stronger by funding patronage and repressive apparatuses. Thus, as a first goal this article addresses an analytic shortcoming in previous studies by separating regime survival empirically from both economic policy and regime type (democratic or authoritarian) and by focusing on the direct effects of oil wealth on several measures of political stability. I address the relationship between oil wealth and these outcomes both by comparing exporters to the rest of the developing world and by comparing oil-rich states across pre-boom, boom, and bust periods.
The results indicate that oil wealth is robustly associated with more durable regimes and significantly related to lower levels of protest and civil war. Moreover, the collapse of oil prices in 1986 exerted no significant negative effect on regime viability or civil conflict among oil exporters even though regimes in the most oil export dependent states faced significantly higher levels of ant state protest. Finally, oil’s strengthening effect does not appear to be a function of repression. These findings suggest in turn that political scientists have some serious rethinking to do in the study of the effects of resource wealth on the viability of regimes.
Where Beblawi and Luciani, Karl, and others argue that oil rents can create a long-lived but shallow stability in an otherwise weak state, I suggest that the persistence of authoritarian regimes in oil-rich states long after the bust of the 1980s—after access to patronage rents had dropped off dramatically—suggests that leaders in many of these states invested their windfall revenues in building state institutions and political organizations that could carry them through hard times.
In short, I ask why, given the sudden collapse in 1986 of potential patronage rents by more than two-thirds, few of these regimes faced serious challenges. The connection involving oil and political regime type has been a topic of particular interest to political scientists for the last few decades. From the early conception of the ‘rentier state’ in the 70’s to the present day, there has been much debate about the mechanisms of how the existence of oil influences the political regime type.
The early rentier state theorists often failed to account for the socio-political dimensions of rentierism, adopting a kind of ‘economic determinism’ in their approach to understanding this relationship (Okruhlik 1999; Ross 2001). As a result, what were initially thought to be simple mechanisms have turned out to be far more complicated, bringing into question the comprehensive explanations the early rentier state theorists posited. Unproductive and incompetent governance, possibly more than any other thing, May clarified the extent of poverty in oil-dependent state, but this too is related to the presence of oil. Because the revenue base of the state is the state, oil rents affect state capacity.
Oil dependence skews the institutional development of the state because oil rents weaken agencies of restraint. In resource poor countries, intense population pressure on scarce resources reduces the tolerance for inefficiency and predation, and the economy cannot support extensive protection or an over-expanded bureaucracy. But in oil states, the brake of scarcity does not exist. Instead, oil dependence encourages the expansion of states into new arenas while weakening opportunities to strengthen administrative capacities, especially non oil-based tax systems, merit-based civil services, and the rule of law – fundamental elements for creating efficient states.
The impact of oil rents on effective governance has a pernicious effect on the quality of administrative institutions in less developed countries, regardless of whether they are democratic or authoritarian. First, since oil states do not have to extract the majority of their resources from their own populations, they do not have to build the institutional capacities that have historically been required by such extraction.
This means that they are denied the information that is generated by a robust tax bureaucracy, and they are also denied the incentives for innovation within a civil service that stems from scarcity. Even where a nation capacity entrenched in tax powers that may have before existed, oil rents tend to be discouragement. With the innovation of oil, these tax establishments are frequently disbanded since they emerge to be no longer obligatory. Second, because bonus gains that occur from petroleum support rent-seeking conduct, the nation becomes a type of “sugar pot” in which challenging interests try to confine a significant part of resource rents by capturing portions of the nation.
A vicious cycle consequences in which all actors undertake to achieve in parts of the bureaucracy at the same time as governments, in turn, reward their followers by funneling nepotism in their way. Nevertheless this means that the public sector tends to lack the corporate cohesiveness and authority necessary to exercise effective public policy. Ultimately, if the state is especially weak and the target of capture, it is also especially overloaded. Oil revenues are the catalyst for a chronic tendency of the state to become over-extended, over-centralized, and captured by special interests.
This can be seen through the accelerated and especially large growth of the public sector, the over-extension of public expenditure, and the unusually extended periods of protection for import-competing sectors. Yet without the institutional and administrative capacity to cope with this enhanced state role, this over-extension is a formula for ineffectiveness. The most telling indicator of declining state in capacity is the thrashing of fiscal control, calculated by excessiveness and high debt as well as the inability of oil states to reform them.
This is because their states degenerate into sophisticated mechanisms to transfer resources from the primary sector to politically influential urban groups, especially as bonus gains incite a type of “feeding frenzy” to attain petrodollars. This does not occur to the same extent where labor-intensive activity drives economic growth, such as foodstuff and farming products, in measurement since they tend to make fewer rents. The political rivalry for resource rents has significant effectiveness costs. For instance, they make it harder for governments to restrained expenditure in answer to the price instability of petroleum, thus further distorting the market.
In broad, oil rents authorize incompetent state administrative to continue and ineffective regulations to keep on significantly longer than in less resource rich countries. To avoid unpopular reforms, governments use their oil as collateral for borrowing abroad or intensify the squeeze on the export sector. Petrodollars simply permit more scope for cumulative policy errors. Finally, states that have the greatest resource endowments, and especially oil-exporting countries, also have extraordinarily high levels of corruption – a reality confirmed by stunning quantitative evidence and numerous case studies.
With incomes of the order $35 billion/year for Mexico; $30 billion for Venezuela; $22 billion for Nigeria, the temptations for abuse are immense, and with weak state capacity and rule of law in place, there is little institutional restraint. “People rob,” one finance minister of an oil-exporting country remarked, “because there is no reason not to.” Oil rents and organization fault form a cruel cycle. Quantitative evidence suggests that the extent of corruption is higher in countries in which civil service recruitment and promotion procedures rely less on merit-based considerations; where this is the case, efforts to reform the civil service are blocked in order to sustain patterns of corruption.
At its worst, this can degenerate into a “corruption trap,” where payoffs at the senior of following and business enterprise support the corruption of others sectors a large percentage of civic and private sector statistics are concerned, as the case of Nigeria demonstrates.Corruption takes place not only at the production and export stage through secret signature bonuses and opaque financial arrangements, but also as a result of extremely high and difficult to absorb investments at the “upstream” stage as well as at the trading or “downstream” stage, where massive resources tend to disappear through price transfers that are difficult to track. While transactions are obviously clandestine, proof of oil-related bribery abounds in both the private sector and the public sector. The earlier president of the French affirm oil company, Elf Aquitaine, is exciting with presiding more than the fee payments on oil transaction with African states. Mobil oil executive are argued with unlawful expenses in Kazakhstan.
In Angola, supplementary than $1 billion for each year of oil revenues has gone from 1996-2001 a complete sixth of the countrywide income in a nation where extra 70 percent of the inhabitants lives on less than $1 per day. Bribery contributes to the resource curse. Rulers will hold up policies that regulations modified rents even if these regulations effect in lower generally public interests and because they require allocating these rents with followers and subordinates, the altitude of deformation can be very large. Policy choices are deformed in a number of ways. First, where huge oil rents are present, officials tend to favor larger public sectors with overly excessive regulatory interventions that improve chances for rent-seeking.
Second, policy choices are distorted towards the financing of mega system in which payoffs can be more simply unseen and the set of corruption is easier while dynamic long-term deal remains wanting. Highly-capital concentrated and specific one-of-a-kind designs may be preferential so that there are no reliable cost benchmarks; for example, an aluminum smelter was built for $2.4 billion in Nigeria even though it served no valid development objective and its cost was between 60-100 percent higher than similar plants elsewhere.
Infrastructure and defense projects are also favored over health and education expenditures, thereby reducing the quality of public services as well as lowering the quality of public infrastructure. Most important, fraud affects equally economic development and profits levels. Economists estimate, for example, that Venezuela’s average GDP growth rate would be raised by some 1.4 percent annually had it reduced its corruption to the level of Chile. The attributes of the rentier states are essential in understanding how the existence oil affects the political economy, consequently, influencing the political regime type of a country.
Skocpol, (1982) is often credited for coining the expression ‘rentier state’, describing it as a country that receives substantial ‘external’ rents on a regular basis. Rents most commonly refer to the external income from natural resources such as oil and gas as well as others like aid. Rentier state theory is a political economy theory that seeks to explain state-society relations in those rentier states, where generate a large proportion of their income from rents, unproductively earned enormous payments.
It claims that since those rentier states receive such a large portion of income from rents and distributes it to society to relieve, or even replace domestic taxation, the sates do not have to offer concessions to society such as a domestic bargain or development strategy. In other words, as long as the domestic economy does not require any further income through domestic taxation, the growth of the domestic economic is not an essential factor for the income of the state, thus, not a precondition for the existence and expansion of the state either. Beblawi (1990) expounds this concept further by suggesting that only a few can be involved in the generation of these rents; the majority only being involved in the utilization or distribution of it. These attributes make the states autonomous from society whilst also increasing the primacy of the state’s role as distributor to the society. From these attributes, we can see that the fundamental way in which oil rents influence the political economy is through the fiscal basis of the state (Dunning, 2008).
Therefore the question that must follow from this is ‘how do the effects that these rents create in the political economy influence the political regime type?’ This leads us onto the next part of my essay where we will explore the mechanisms that the early rentier state theorists proposed. However, before I do this, I must first briefly outline the difference between oil and other natural resources and why oil has such an extraordinary influence on the states and the type of regimes It is important to note that not all natural resources produce ‘substantial’ rents that accrue primarily to the state, therefore not all natural resources will produce revenues that influence the political regime type of a country.
As we have already established, it is through the state’s fiscal revenues that the political economy is affected, therefore rents that do not substantially alter the nature of the state’s fiscal revenues will have little significance on the political dimension of a country. Snyder and Bhavani (2005) make distinctions between “loot able” (such as gemstones) and “non lootable”resources (such as oil), pointing out that it is non-lootable resources that provide ‘favorable revenue opportunities’ for the government.
This is as a result of the high barriers to entry in the process of the extraction of these resources, as well as their geographical concentration, naturally excludes smaller scale industries, allowing the state to establish monopoly control, thus to maximize profits without fear of competition. Even in the cases where the state cannot, or for political reasons, chooses not to establish monopoly control, allowing private actors to play a role in the extraction of these resources, the state can still earn large amounts of revenue through taxing these private actors.
Therefore, within the context of the rentier states, it is important to understand that it is only specific types of natural resources that have the necessary qualities required for the state to extract significant rents from them, and oil is the most influential non-lootable resource owing to its cost effective and the high demand from all over the world. There are multiple mechanisms that have been proposed to explain the relationship between oil wealth and political regime type. I will focus on three effects of rents in these mechanisms suggested by Ross in 2001 that sustain or prolong authoritarian and non-democratic governments in oil states, which are; rentier effect, repression effect and modernization effect.
The first mechanism, through which oil rents are believed to affect the political regime type, is through the taxation of the state, the rentier effect. Ross (1999) argues that as a country’s wealth increases, they become increasingly less reliant on taxes and more dependent upon non-tax revenue, demonstrating that there is a significant statistical link between this relationship (also see Mahdavy 1970; Chaudhry 1997).It is argued that with little or no taxation, citizens are less concerned about demanding political participation and the state can buy off the population and gain the public’s political acquiescence or toleration (Luciani,1987; Mahdavy,1970; Beblawi,1990,). The second mechanism is described as repression effect. It is suggested that the wealth from oil rents allow the state to have ‘repressive state apparatuses and institutions and keep democratization pressures away while the governments expenditure on patronage increases, creating a sort of ‘petro populism’ that is said to suppress the democratic demands from society(Beblawi 1990; Vandewalle1998). At the same time, it discourages the formation of more bellicose social group.
Lastly, modernization effect is known to be the mechanism that oil rents cause or increase socio-political stagnation or underdevelopment, thus prevent democratic impulses from taking root (Ross, 2001).It is argued that these three effects contribute towards the increased autonomy and independence of the state from civic society and thus are said to have anti-democratic (authoritarian) properties. With the use of case studies and more recent literature, I will critique these mechanisms that are largely representative of the early RS literature, demonstrating that within the context of these case studies, these seemingly intuitive mechanisms are not consistent with the reality observed in these countries. It is claimed by Luciani (1987), along with a number of other early rentier state theorists, that little or no taxation reduces societies demand for political participation, thus having an anti-democratic influence (Ross 2001).
Is this actually the case? If it is, has the degree to which the autonomy of the RS increases as a result of low tax, been exaggerated? Much of the early literature and case studies from which these inferences about the role of taxation have been made, have focused on rentierism within a predominately Middle Eastern context, with the arguments presented in this literature being largely inductive in their nature (Beblawi 1990; Mahdavy 1970; Skocpol:1982). This is problematic as the degree to which the state becomes autonomous is also directly (and necessarily) linked with the degree to which society is subservient. It would be simplistic to assume that the subservience of society depends solely on how society relates to the economy, with all societies producing the same homogenous response (Rosser 2001).
It would be perfectly reasonable to assume that there could be other social variables outside of the economy (cultural, religious, political etc.) that could influence this; positively or negatively. For example, Fish (2002) shows that there is a statistically significant link between authoritarianism and countries that is predominately Muslim, also showing that women are extreme more probable to suffer from subordination in Muslim countries (Fish 2002). Due to the patriarchy that is inherent within Islamic culture, it is not impossible that “Individuals who are more accustomed to rigidly hierarchical relations in their personal lives, may be less prone to resist such patterns of authority in politics” (Fish 2002,).
This is of course debatable but if, for the sake of the argument, we assume this to be true, we can see how this would affect the degree to which a society is subservient, hence demonstrating that simply trying to account for the relationship between taxation and political participation in solely economic terms, as is the case in the early RS literature, would be a prime example of ‘reductio ad absurdum’. Secondly, again within the context of taxation, the claim that oil acts as an impediment to democracy, can be easily challenged by looking at the democratic experience of Latin America, which is largely ignored in the early literature. Venezuela is a paradigmatic example of a country that has not been consistent with what traditional RS theory would predict and I believe this is largely due to the simplistic nature of the mechanisms that have been proposed; specifically the role of taxation and its effect on the political economy. Admittedly, Venezuela has had a mixed experience of democracy, enjoying a brief three year spell 1945-48 (the trienio), in the end leading to a successful coup by the ‘elite’. ‘Popular mobilization’ prior to 1945 had played a crucial role in forcing the emergence of democratic rule in Venezuela but the coup that ensued three years later was largely reflective of what was a redistributive conflict (Dunning 2008). Redemocratisation occurred in 1958, between which oil revenues doubled (in real terms), further tripling between the years 1958-1974; largely due to OPEC’s oil embargo in the 70’s. There were multiple attempts to increase redistributive taxes during this period but they were unsuccessful, largely because of the hostility with which they were met by the elite (Dunning 2008).
At its peak, oil revenues accounted for over 80% of Venezuela’s government revenues in the 70’s, which was also a decade that has been argued to be the most stable of Venezuela’s democratic history (Neuhouser 1992; Dunning 2008). How can the early rentier state theories account for what seems to be an example counterintuitive to its thesis concerning the role of taxation Contrary to much of the early RS literature, Dunning (2008), suggests that oil rents can actually have an indirect democratizing effect on a country.
Assuming the initial political regime is democratic, this affect is dependent upon the perceived cost of a coup by the economic elite vis-à-vis the cost of continuing under democratic rule (Dunning 2008). These ‘costs’ that Dunning describes are: the cost (or risk) of an unsuccessful coup versus the cost of a redistributive democracy; where a high level of redistribution increases the incentives of the elite to launch a coup against the ruling party. However, a high level of resource rents can mitigate the severity of this redistribution, making it bearable for the ‘elite’ to function under a democratic system (because the cost of a coup would be greater than the disutility of democracy); this is the indirect democratic effect (Dunning 2008).
The failure of early RS theory to account for how the redistributive policies of the governments will impact different class groups within society, has led to an important indirect mechanism being overlooked. The next two mechanisms, which Ross(2001) conveniently calls the ‘spending’ and ‘group formation’ effects, I will deal with at once in an attempt to ‘kill two birds with one stone’ (Ross,2001). These are both highly interdependent mechanisms and I would really question the value in separating them as it would seem as if the latter is more a consequence of the former rather than an entirely different mechanism in and of itself. The claim is that the state is able to suppress the democratic aspirations of society through public expenditure, either through official or unofficial avenues (Beblawi 1990,; Vandewalle: 1998; Ross 2001). A recent example of this may be Saudi Arabia’s unexpected and colossal social welfare package that it announced in 2011, shortly after President Hosni Mubarak’s regime in Egypt was toppled.
This has been judged by some as an attempt to alleviate social pressures in Saudi Arabia at a time when much of the Arab world was revolting against their respective governments (Diamond 2011). However, using a case study example from Saudi Arabia, Okruhlik (1999) argues rather convincingly, that oil wealth distribution can be a channel for resistance to the condition .She argues this for two main reasons – firstly because the oil rents are distributed inequitably and secondly because they provide ‘dissenters’ with the resources they need to mobilize against the regime. In the case of Saudi Arabia, The Al-Saud, the ruling royal family, distributed resource rents along ethnic, religious and political lines.
There are a number of examples that Okruhlik refers to in her case study, one of which was the Al-Saud’s decision to move the financial, diplomatic and commercial activities (over a 15 year period), from Hejaz in the West, to Najdis in central Arabia, where the royal family enjoyed more political support, consequently damaging the Hejaz merchant economy and creating enmity between the Hejaz province and the Al-Saud (Okruhlik 1999,). The Eastern provinces, were also ‘disqualified from the improvement activities’, probably because it was a predominately Shi’ite region (Okruhlik 1999,).
Their discontent was reflected in a series of riots between 1979 and 1980; oil rents were subsequently distributed to the east in response. Okruhlik also describes how the retrenchment during 80’s, led to the Al-Saud introducing austerity measures. However, the Al-Saud continued to construct Mosques and Islamic education centers in an attempt to ‘legitimize itself’ during what were hard times, by ‘fastening belief and nation institutionally’ (Okruhlik 1999). Okruhlik (1999) describes how: “These universities were the basis of early on resistance to the decision folks.
They have intellectual and thoughts, computers, faxes, libraries, and the entire the possessions required for conscription” The truth of this statement can be seen during the early 90’s where political Islamists, many of whom were University educated or professors, called for the restoration of Islamic values in a petition presented to the King of Saudi Arabia, Fahd bin Abdulaziz Al Saud.Okruhlik gives a number of other examples concluding that the inequitable distribution of rents fostered the very forces the Al-Saud were trying to prevent (Okruhlik 1999).
It is clear that there are most definitely cases where the government is able to successfully ‘buy-off’ its citizens through the distribution of its oil rents, much of the early RS literature provides case study examples of this. However it would be ambitious to suggest that this must necessarily be the case. This case study has demonstrated that there can be indirect consequences of the state’s expenditure decisions that can actually be counterproductive in its attempts to quell the masses. Okruhlik (1999) is therefore right to assert that “The residents are not accepting and is not contented with a supposed pact that relations welfare for political tranquility” as early RS theory would suggest. Again there is a level of complexity to these mechanisms (spending and group formation effect) that early RS theorists have failed to account for. Oil and centralized rule seem to go together; and oil and democracy do not generally mix. Political scientists have repeatedly documented this relationship through case studies, and they have found a robust and statistically significant association between oil dependence and authoritarian governments.
Oil appears to impede the appearance of democracy in most cases, especially in the Middle East and North Africa, though it facilitated democratization in Venezuela. The hindering of democratization seems to occur primarily through different, though related, mechanisms. The first is based on how rentier states collect revenues. Because these states live from oil rents rather than direct taxation, they are likely to tax their populations without due consideration or not at all. Thus, they are unusually detached from and unaccountable to the general population, and their populations, in turn, are less possible to require responsibility from and account in government. In effect, the vital link between taxation and representation is broken.
Studies have shown, for example, that the governments of Kuwait and Qatar became less accountable to the traditional merchant class in this way. Even in Venezuela, where some type of democracy exists, the lack of taxation has made both representation and state accountability less than a second causal mechanism depends on how regimes spend state revenues. Oil wealth produces larger spending on patronage that, in revolve, weakens obtainable pressures for demonstration and liability. In effect, popular acquiescence is achieved through the political distribution of rents.
Oil states can buy political consensus, and their access to rents facilitates the cooptation of potential opponents or dissident voices. With basic needs met by an often generous welfare state, with the absence of taxation, and with little more than demands for quiescence and loyalty in return, populations tend to be politically dormant, reasonably compliant and loyal and levels of protest remain low at least as long as the oil state can deliver. Thus for long periods an unusual combination of dependence, passivity, and entitlement marks the political culture of petroleum exporters.
This is especially the case in smaller exporting states like the Gulf monarchies, where oil reserves per capita are 43 times those of large exporting states like Algeria, Indonesia, Nigeria, Venezuela, and Iran and where such costly distributive policies can be sustained for a longer time. Regimes have even used their largess to prevent the formation of social groups independent from the state that might someday prove to be political challengers or to rid themselves of by now obtainable challengers a incident that has been acknowledged (during various historical periods) in Venezuela, Algeria, Iraq, Iran, Kuwait and Qatar. In the latter two countries, for example, the political distribution of oil rents eliminated the influence of the merchant class in decision making, leaving the rulers with no real political opponents that could base themselves in a social class. In Iran, under the Shah, the agricultural class was simply transformed into urban commercial (and dependent) interests through the politically judicious use of oil rents. But the spending of oil rents supports repression as well as cooptation to keep authoritarian rulers in authority.
Not shockingly, then, oil reliance is strongly linked with military expenditure and the design of extensive cruel apparatuses. This is in element because of the reality that superpowers are cautious of allowing oil reserves drop out of the control of their associates and additionally likely resistance groups. As a set, oil exporters use much extra cash and a bigger percentage of their revenues on their armed and safety forces than non-mineral needy states.
For example, where the average developing country spends about 12.5 percent of its budget on the military, Ecuador in contrast spends 20.3 percent, and Saudi Arabia spends a whopping 35.8 percent. The amount of militarization is astonishing. In the 1984-1994, for instance, OPEC associate share of yearly armed forces expenditures as a proportion of total fundamental government spending was three times as bigger as the industrial countries, and two to ten times that of the non-oil up-coming countries. For these reasons, oil revenues tend to lend support, at least in the short to medium term, to whatever type of regime is in place – whether it is the occasional democracy or the more likely authoritarian ruler.
While all states may use their fiscal powers to reduce dissent through coercion or cooptation, oil wealth provides states with exceptional possibilities to do so an occurrence that has been practical all the way through Venezuela, Mexico and Middle East. Thus oil wealth is robustly associated with more durable regimes, and oil dependence is a positive predictor of greater regime durability. Even though authoritarian regimes in general are more likely to fall during economic crises, oil based authoritarian regimes have some cushion from this general rule.
Regimes like Suharto’s in Indonesia, Saddam Hussein’s in Iraq, Gomez’s in Venezuela, and the long-lived monarchies of the Persian Gulf (all of which lasted at least three decades) are representative of this unusual durability. Even if power shifts from one type of authoritarian rule to another (or to some form of elite democracy), political elites inherit the power that comes from control over the process of rent distribution because they control the state during windfalls, and they can consolidate this form of control through their allocate power. Thus, oil rents initially help regimes to consolidate; they enable them to endure for unusually long periods; and they even enable them to persist during periods of bust. Yet the norm of regime stability is only part of the story. Richly detailed case studies of Nigeria, Venezuela, and Iran show that oil can help to undermine political stability over time, especially in authoritarian regimes. Virtually all oil-rich nations lean to face significantly higher levels of social protest when oil revenues fall, and some of these regimes collapse. Where regimes have progressed mechanisms of public control, authorize rotation in command, or have sources of authenticity that are not concerned with oil rents, they are supplementary probable to undergo through shot-bust cycles.
But wherever original oil utilization coincides with regime and national building, non-oil based welfare do not structure and support rents may be the key adhesive of the requirement. Beneath these conditions, these regimes are particularly easily broken and defenseless in oil busts. Findings implication of the results presented here is that durable regimes in oil-rich states are not the outliers that both rentier state and resource curse theory have made them out to be.
Rather, regimes like Suharto’s in Indonesia, which lasted 32 years, Saddam Hussein’s Ba’athist regime in Iraq, which lasted 35 years,18 and the long-lived monarchies of the Persian Gulf appear to be more representative of broad trends of regime durability than do the favorite cases of Iran, Nigeria, Algeria, and Venezuela—the “big four.”19 More importantly, despite what Beblawi and Luciani (1987) and others have argued, the durability effect appears to have been self-governing of reliable admission to rents through which regimes can acquire legality, since the busts created no trend toward regime crisis or instability in exporting states.
This trend of regime durability, its robustness throughout the oil bust period, and the fact that repression does not account for the result, suggests that there is more to the durability of regimes in oil-rich states than patronage and coercion. Even when access to oil rents dropped dramatically, regimes in these states do not appear to have suffered much. Repression similarly fails to provide a full account of how it was that regimes in oil producing nationals managed to lose much of the discretionary windfalls of the 1970s, face more protests, and still fall considerably less often than did regimes in other developing countries.
The most important conclusion reached here is that longevity—even through volatile price shocks—is the dominant trend among oil exporters. This conclusion is bolstered by the significantly lower likelihood of civil war and volume of antigovernment political protest in oil-rich states. That regime in oil-producing nations (Christopher, 2000) tend to fare better than others despite the volatility of their revenue base and (Banks, 1996) that they even fared well during the oil bust of 1986 and beyond suggests two plausible mechanisms of regime maintenance that belie the weak-state assumptions associated with oil wealth.
First, many of these regimes may have had robust social coalitions that went much deeper than the simple purchase of legitimacy. Studies focused on investigating the origins of strong coalitions underlying the resilience of regimes in Syria, Iraq, Egypt, and Indonesia among others (see for example Smith n.d.) are particularly promising agendas for future research Second, regimes such as these may have built institutions that could provide no repressive, as well as repressive, responses to organized opposition.
In short, such regimes may well have avoided the substitution of oil for statecraft, and there is little to guide scholarship in the study of how oil wealth and strong institutions might mix. Theories to explain, and studies to trace, the processes through which many regimes in oil- prosperous nations might have indeed built strong states, are currently in short supply and future research in this direction is likely to be extremely fruitful. While oil wealth appears to have had a generally positive effect on the prospects for regime maintenance in exporting countries (from the point of view of rulers who want to stay in power), it might well be the case that oil wealth has a significant impact in provoking interstate conflict, either by exporters during bust periods or by greed-driven neighbors. Parasiliti (2003), for instance, advances both of these arguments to explain Iraq’s invasion of Kuwait in 1990. A number of other major exporters have, at times during their histories become involved in foreign wars, and the robustness of oil’s influence on regime durability suggests that it might very well be important to explaining the onset and duration of external conflict as well.20 I believe that a major part of this problem has been in the way that scholars have conceptualized oil. It has been conceptualized as a structural variable willfully exerting its own effects. Despite wide variation in their approaches to the study of oil politics, both statistical and small-N or case study methodologists have underplayed the importance of agency and timing.
A number of recent works (Bellin 1994; Herb 1999; Lowi 2000; Okruhlik 1999) have hinted at this, but none yet have provided a theory to explain how oil revenues might “do” different things depending on the context in which they do them. What these works do provide is a crucial reminder: oil revenues are filtered into domestic political settings by politicians with their own interests at stake, and those interests might be shaped in different ways depending on the timing of oil’s entry into a political economy. Finally, the empirical data that attempts to make a connection between natural resources and political regime type suffers from a number of issues. First of all there are issues of causality. Herb (2005) highlights that “the definition of rentierism assures that rentier states will be drawn largely from among the world’s poorer states and hence those that would be expected to be more authoritarian.”
Herb however does not elaborate any further on exactly how poverty relates to authoritarian regimes. If we take what he has said to be true, then it raises difficulties about how we can establish any sort of causality between rentierism and the political regime type. Herb (2005) also explains that any causality that may exist would be small compared to other variables such as the Muslim share of the population, the region and profits levels of the nation. If his conclusions are correct then it does raise the question as to whether rentierism really has as much significance on the political regime type of a country as much of the literature would suggest.
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