Can we say confidently that international conflicts are really just fights over oil? Well, it sometimes seems that way.
I must say that after devoting several years of my life to international relations and also studying Petroleum Engineering at bachelors level, it is not hard for me to speculate that, oil could be the reason behind an unbelievably high number of conflicts/wars.
“Grant me this boom then,” Midas cried eagerly: “that whatever I touch may then to gold!”
“So be it!” laughed the god... and Midas left his presence exulting to know that henceforth his wealth was boundless.” - The Myth of King Midas .
The above parable is one that depicts greed and its evils. 'Boundless wealth'- an enigma that still prevails, is assessed by this Myth of King Midas.
In the field of political science, there has been a growth in the literature on democratisation. Increasingly, analysts have been seeking to determine the impact of oil and other natural resoruces on political regimes. 'The resource curse' is the name often attributed to the negative impact of natural resource endowment on political and economic development. Jeffery D. Sachs identifies that a states’ ability to raise funds without taxation could harm the democratisation process. He also states that transparency and accountability are undoubtedly key ingredients. Later in twentieth century, oil wealth was found to have a powerful effect on the durability of all political regimes, whether democratic or autocratic. As noted by Kevin Morrison, “it seems difficult to imagine how oil wealth could simultaneously enhance stability on one dimension while undercutting it in another.”
In this short post, I try to addresses a seeming paradox, building on the position that it seems that oil may undermine democratisation, yet in some cases can be a force for democracy. I also try to emphasize all these ideas throughout and analyse the effects oil has on democracy.
It is also said that to whom much is given, much more is expected. Needless to say, oil revenues have enabled many states to develop considerably, engage in policy formation and practice nation building. In contrast, many developing countries with comparative advantages in resources such as oil are indeed very far from attaining their aspirations.
Some governments of oil-rich states in the Middle
East, such as Kuwait, Bahrain, Qatar, The United Arab
Emirates, Oman, Yemen and Saudi Arabia, as well as the governments of
Sub-Saharan African countries, as well as Central and Southern America, have a history of
authoritarianism. It is undisputed, in the literature
on democratisation, that a set of domestic and international
factors play a role in the democratic development of all nations - oil being one of
these factors. It is absolutely necessary to mention that a great majority of
studies have one common component: they conclude that all non-democratic countries
face similar obstacles to democratic progress. Yet, in reality, this is not the
case because these inhibitors of democratic advancement are country specific.
There is a surprising and troubling empirical regularity among oil-rich states: they are over-dependent on natural resources and function as rentier states. These factors in turn, tend to generate authoritarian governments and socio-political instability. This observation is particularly valid in Africa and the Middle East. As former Vice President Dick Cheney put it; “The problem is that the good Lord didn't see fit to put oil and gas reserves where there are democratic governments.”
Oil-funded rulers have progressively used their petrodollars to entrench and enrich themselves in power and block democratic reforms. The Kremlin's greater control over the sharing of the massive amounts oil rents, has given Putin great popularity in the Russian Federation. In Azerbaijan, President Iihram Aliyev sponsored a referendum to remove term limits, that would see him out of office. The opposition refused to take part in the referendum, which according to the government was approved by a convincing majority. Though a number of these oil-rich developing countries such as Nigeria and Mexico have made considerable transitions to democracy, the majority of these oil-rich nations have barely made any progress in attaining and sustaining democracy. Perhaps, oil and democracy are immiscible: two things that cannot mix, no matter what.
In these oil-rich states, politicians cut down tax rates to gain the support of the lay people. This is possible because the governments are able to use a part of the revenue generated to compensate the costs that come along with tax reduction. In general, citizens tend to support governments that have large budgets and lower taxes. But what does this indicate, in terms of democracy? We can ascertain some more evidence of how the collection of taxes is directly linked with the emergence of democratic governments. When autocrats raise taxes, it compels the citizens to begin to demand for a quintessential and representative government. There is an argument that citizens object to paying high taxes if they do not receive commensurate benefits. Therefore, an inference can be drawn that, governments use the oil revenues to relieve social pressures that might otherwise lead to demands by the people for greater accountability. This argument is deeply rooted in studies of how democratic institutions evolved in early modern Europe, when monarchs in England and other European countries were forced to shed some of their authority and influence to parliament, in exchange for the right to impose new taxes.
Contrary to the view that oil undermines democratization, there exists a smaller body of literature that actually argues the opposite, oil and natural resource abundance can be conducive to democracy. I wish to cite Venezuela, to illustrate the point that resource wealth may actually promote democracy. However, I do not seek to refute the idea that resource wealth can sustain authoritarianism, rather, I seek to develop a theoretical framework for analysis that accommodates both these views and explains “the variation in political outcomes across resource-rich countries”.
My argument runs along the lines, that when
natural resources are owned by private domestic actors, who profit from the
export of these resources, these actors have a vested in interest in the
development of institutions that secure their property rights and a stream of
stable revenue. Under such
conditions, the government likewise would have incentives to develop stronger
fiscal institutions to oversee economic
development. Furthermore, private ownership prevents the blurring of enterprise
and political ambition. Of course, institution building is a lengthy process
and involves conflict and negotiation, between the government and domestic
capitalists, and how they envisage their role in the
economy. I started with the parable of King Midas and the greed
associated with abundant wealth. Greed and wealth remain driving forces in
politics, and natural resource endowment, whether it takes the form of petroleum
or else, is an attractive means by which politicians not only stay in power but
also fill their own bank accounts. For this reason, the economic transitions
that many people envisage will be difficult to realise, but at the same
time, they are worth pursuing because oil, although often portrayed to be a
resource curse, has when properly harnessed, the potential to be a resource
By: Joseph Mensah, Emmanuel Emenyo