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Foreign Investment, Oil Curse, and Democratization: A Comparison of Azerbaijan and Russia

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  • Bayulgen Oksan

    (University of Connecticut)

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    Abstract

    The rentier-state literature pays little attention to the initial political conditions that shape the way an oil-rich country develops its resources. One of the key causal mechanisms linking oil wealth and regime type is the relationship between foreign investors and host governments. Especially in the developing countries that depend on international financing and expertise, the role of foreign capital in fashioning the balance of power in the political system and thereby the distribution of oil wealth becomes ever more important. As the experiences of Azerbaijan and Russia in the 1990s demonstrate, among oil-rich states in the developing world, those with authoritarian regimes tend to fare better in terms of attracting FDI in the oil sector than states with democratizing (or hybrid regimes). The durability of some authoritarian regimes in the developing world is partly a function of this external legitimation from foreign investors.

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    Bibliographic Info

    Article provided by De Gruyter in its journal Business and Politics.

    Volume (Year): 7 (2005)
    Issue (Month): 1 (April)
    Pages: 1-39

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    Handle: RePEc:bpj:buspol:v:7:y:2005:i:1:n:3

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    Web page: http://www.degruyter.com

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    Web: http://www.degruyter.com/view/j/bap

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    Cited by:
    1. Saime Kayam & Alexandr Yabrukov & Mehtap Hisarciklilar, 2013. "What Causes the Regional Disparity of FDI in Russia? A Spatial Analysis," Transition Studies Review, Springer, Springer, vol. 20(1), pages 63-78, April.

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