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A Paradox of Plenty? Rent Distribution and Political Stability in Oil States

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  • Basedau, Matthias
  • Lacher, Wolfram

Abstract

Resource curse theory claims that resource abundance encourages violent conflict. A study of 37 oil-producing developing countries, however, reveals that oil states with very high levels of oil revenue are remarkably stable. An analysis of the ways in which governments spend oil revenues identifies two distinct types of rentier systems - the large-scale distributive state and the patronage-based system - which are strongly linked to instability or its absence. However, some deviant cases, such as Equatorial Guinea and Gabon, illustrate the need for further research. Apparently, the notion of a 'paradox of plenty' has neglected rentier mechanisms that avoid conflict.

Suggested Citation

  • Basedau, Matthias & Lacher, Wolfram, 2006. "A Paradox of Plenty? Rent Distribution and Political Stability in Oil States," GIGA Working Papers 21, GIGA German Institute of Global and Area Studies.
    • Handle: RePEc:zbw:gigawp:21
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    References listed on IDEAS

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    6. Christopher Cramer, 2003. "Does inequality cause conflict?," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(4), pages 397-412.
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    Cited by:

    1. Lotfali Agheli, 2017. "Political Stability, Misery Index and Institutional Quality: Case Study of Middle East and North Africa," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 30-46.
    2. Mähler, Annegret, 2009. "Oil in Venezuela: Triggering Violence or Ensuring Stability? A Context-sensitive Analysis of the Ambivalent Impact of Resource Abundance," GIGA Working Papers 112, GIGA German Institute of Global and Area Studies.
    3. Jayakar, Krishna & Martin, Brandie, 2012. "Regulatory governance in African telecommunications: Testing the resource curse hypothesis," Telecommunications Policy, Elsevier, vol. 36(9), pages 691-703.
    4. Gilbert E. Metcalf & Catherine Wolfram, 2016. "Cursed Resources? Political Conditions and Oil Market Outcomes," The Energy Journal, , vol. 37(1), pages 182-210, January.
    5. Larrú, José María, 2010. "Foreign Aid in Equatorial Guinea: Macroeconomic Features and Future Challenges," MPRA Paper 25001, University Library of Munich, Germany.
    6. Shabafrouz, Miriam, 2009. "Iran's Oil Wealth: Treasure and Trouble for the Shah's Regime. A Context-sensitive Analysis of the Ambivalent Impact of Resource Abundance," GIGA Working Papers 113, GIGA German Institute of Global and Area Studies.
    7. Meissner, Hannes, 2010. "The Resource Curse and Rentier States in the Caspian Region: A Need for Context Analysis," GIGA Working Papers 133, GIGA German Institute of Global and Area Studies.
    8. Yu, Jiangli & Wang, Shuo & Yang, Wantong, 2023. "Natural resources governance and geopolitical risks: A literature review and bibliometric analysis," Resources Policy, Elsevier, vol. 86(PA).
    9. Araujo Rodrigues, Larissa & Luís Sauer, Ildo, 2015. "Exploratory assessment of the economic gains of a pre-salt oil field in Brazil," Energy Policy, Elsevier, vol. 87(C), pages 486-495.

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    More about this item

    Keywords

    Resource Curse; Paradox of Plenty; Oil; Rentier State; Violent Conflict; Political Stability; Developing World;
    All these keywords.

    JEL classification:

    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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