The state—landlord or entrepreneur?

The 1970s were a period of turmoil as governments in both developed and less developed countries tried to take the lead in national oil development. While governments shifted from the role of landlord to that of entrepreneur, forming state oil companies, multinational corporate and private domestic industry groups blocked the way by switching from renters to political opponents. By the close of the decade, state oil companies had carved themselves a niche in multinational oil company operations but had been forced to make room there for other national industry groups as well. This article compares the process in Norway, Britain, Indonesia, and Malaysia, and tries to explain evidence that states in less developed countries (LDCs) gained more from multinational oil companies than did those in developed countries. Contrasting hypotheses concerning the ability of LDCs to harness multinational companies are explored. An alternative hypothesis is generated that relies on domestic rather than just international factors to explain the relatively greater gains of LDCs; it holds implications for the state's roles as landlord or entrepreneur. This explanation is contrasted with arguments that the coherence or strength of domestic structures explains relative state gains in the international economy.