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Oil and Politics

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OIL AND DEMOCRACY:

Does Oil Hinder Democracy?

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The Montreal Review, May, 2010

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"The Oil Curse: How Petroleum Wealth Shapes the Development of Nations" by Michael L. Ross (Princeton University Press, 2012)  

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In 2001, Michael L. Ross raised an important question: Does oil really have antidemocratic properties? Like many other political analysts Ross notes that most of the oil rich states are undemocratic-- Middle Eastern Islamic kingdoms and tyrannies, African states such as Nigeria and Libya, countries in Latin America such as Venezuela-- all have abundant oil resources. The anti-democratic governments in these countries rely heavily on the revenues from the oil trade and this fact evokes a reasonable question how important the oil is for the longevity of authoritarian regimes.

In Does Oil Hinder Democracy? Ross writes, "Many of the poorest and most troubled states in the developing world have, paradoxically, high levels of natural resource wealth. There is a growing body of evidence that resource wealth itself may harm a country's prospects for development. States with greater natural resource wealth tend to grow more slowly than their resource-poor counter parts. They are also more likely to suffer from civil wars."

Oil is not the main reason for the lack of development and democracy in resource-rich states in the Middle East, Africa, Central Asia and Latin America. Many factors-- culture and political tradition, religion, geography, colonial past and others - impede development of democratic institutions.

While it is clear that democracy is always a result of different factors, it is interesting to find out how important the abundance of oil resources is for the authoritarian regimes.

The modern carbon-based economy compels the Western democracies to act in contrast with their political ideals. Moreover, the carbon-based economy and the inability of the Western democracies to change their energy habits and technologies creates conditions in different parts of the world that work against the Western interests. Oil trade, for example, enriches and supports the eastern tyrannies. The relationships between the U.S. and EU and the Middle Eastern tyrants inflame frustration among the oppressed populations who see in the Western liberal democracies not only allies of their corrupted governments, but also major perpetrators of their misery. The most visible expression and result of this frustration today is the threat of global terrorism.

A chain of undemocratic and economically backward states with low general standards of living covers the Middle East and Sub-Saharan Africa. Most of these countries are oil producers or important crossroads on the path of the oil routes. Michael Ross calls these countries "rentier states," because a great portion of their national wealth comes from the export of oil or from pipeline transit fees. The national wealth of these states does not depend on agricultural or industrial production and trade, but on natural resources. Private companies, families and groups, collect the revenues from the oil export and use the money for cementing their political, economic and social power. These groups control state government and bureaucracy. Their wealth is rentier because it doesn't depend on real economic activity. The ruling elites in the Middle East, Central Asia and Sub-Saharan Africa are pre-capitalist rentier classes. But unlike the rentier elites that existed in 17 and 18 centuries in Europe, the modern rentier aristicracy do not face political or economic challenges from a developing bourgeoisie. The general lack of economic activity among the population, the specific political culture and history impedes every attempt of effective opposition. In the oil-rich rentier countries, the society is not compact, but the divisions between different groups and clans are not related with forms of class conflict or clash of economic interests and competition. In these societies there is no social mobility or class conflict. The major cause for this is the rentier character of economy and the huge revenues from the oil export. The absence of multiple and active economic actors leads to social and political stagnation.

Ross argues that the oil wealth makes states less democratic and causes governments to do a poorer job of promoting economic development. "Oil does hurt democracy," says Ross "Moreover, oil does greater damage to democracy in poor states than in rich ones, and a given rise in oil exports will do more harm in oil-poor states than in oil-rich ones."

Ross agrees with the notion that the oil revenues help the ruling classes to lessen the burden of taxation. History shows that the heavy taxation often causes social unrests, political opposition and change. But easily earned affluence of the rentier elites makes them passive even in their relations with their subjects. The ruling classes in the oil rentier states neither care about the general prosperity nor they try to extract additional revenue from the population. It is a kind of serene political existence where the rulers, profiting from the oil, are content with their political power, while the subjects are relatively satisfied with the status quo, and never enough compelled to oppose their governments.

In addition, the oil revenue, concentrated in the hands of the rulers, gives them opportunity to distribute it to cronies and favourite groups. This patronage creates strong elites around the government and additionally impedes any form of democratic development or political opposition.

"Citizens in resource-rich states may want democracy as much as citizens elsewhere, but resource wealth may allow their governments to spend more on internal security and so block the populations democratic aspirations," writes Ross, "Skocpol notes that much of Iran's pre-1979 oil wealth was spent on the military, producing what she calls a "rentier absolutist state." (Theda Skocpol, "Rentier State and Shi'a Islam in the Iranian Revolution, " Theory and Society 11 (April 1982).)

Rentier absolutist states use oil revenues for militarization. Especially in the Middle East where the state borders were sketched by the European powers after the collapse of the Ottoman Empire and where the national wealth depends on natural resources, e.g. geography, oil revenues are often used for militarisation and military conflicts. The combination of rentier wealth, resource based economy, undemocratic regimes, and disputed national borders, is an explosive mix. There is nothing surprising that the Middle East today is the most turbulent region in the world. The ruling elites often use the military machine built with oil money for repression against internal opposition, and for aggression against foreign enemies. The authoritarian states are always more bellicose than democratic countries, and the rentier elites are always more warlike than business elites.

Oil based national wealth not only hinders democracy, creates conditions for territorial conflicts, and supports a rentier class, it is also an obstacle to scientific progress. In Theatres of Oil Wars (Economic and Political Weekly, Vol. 39, No. 19 (May 8-14, 2004), pp. 1883-1884) Ranjit Sau argues that the post-1973 oil boom in the Arab region destroyed the values and social incentives that could have promoted knowledge and skill. "With the spread of negative values in that period, creative abilities were neglected, and knowledge lost its attraction." Sau writes, "The social standing [in Arab world] of scientists, educated people in general and intellectuals in particular fell. Education became incapable of providing the poor with the tools and abilities they need for social mobility. Social value was measured by money and fortune, regardless of how those riches were amassed. Proprietorship and possession replaced knowledge and intellectualism. Worst of all, the values of independence, freedom and the importance of a critical mind - values with which people can actively exercise choice and lead conscious lives - were buried."

Democratic change in the rentier oil-rich states is practically impossible today through internal political process. The change is not possible also through military foreign intervention like the war in Iraq. The only thing that can influence political, social, and economic situation in the oil-rich authoritarian states is the gradual shift from carbon-based economy to green economy. Western democracies have no other choice but to invest huge amounts of resources in the development of green energy and technologies. Thus they could achieve a policy that corresponds to their democratic ideals, and in the same time they would exert a positive influence over the politics in the rentier oil-rich states.

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Literature:

Does Oil Hinder Democracy?, Michael L. Ross, World Politics, Vol. 53, No. 3 (Apr., 2001), pp. 325-361, Cambridge University Press.

Theatres of Oil Wars, Ranjit Sau, (Economic and Political Weekly, Vol. 39, No. 19 (May 8-14, 2004), pp. 1883-1884

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