This book makes two central claims: first, that mineral-rich states are cursed not by their wealth but, rather, by the ownership structure they chose to manage their mineral wealth and second, that weak institutions are not inevitable in mineral-rich states. Each represents a significant departure from the conventional resource curse literature, which has treated ownership structure as a constant across time and space and has presumed that mineral-rich countries are incapable of either building or sustaining strong institutions – particularly fiscal regimes. The experience of the five petroleum-rich Soviet successor states (Azerbaijan, Kazakhstan, the Russian Federation, Turkmenistan, and Uzbekistan) provides a clear challenge to both of these assumptions. Their respective developmental trajectories since independence demonstrate not only that ownership structure can vary even across countries that share the same institutional legacy but also that this variation helps to explain the divergence in their subsequent fiscal regimes.
1. Rethinking the resource curse: ownership structure and institutions in mineral rich states; 2. Fiscal regimes: taxation and expenditure in mineral rich states; 3. State ownership with control versus private domestic ownership; 4. Two version of rentierism: state ownership with control in Turkmenistan and Uzbekistan; 5. Petroleum rents without rentierism: domestic private ownership in the Russian Federation; 6. State ownership without control versus private foreign ownership; 7. Eluding the obsolescing bargain: state ownership without control in Azerbaijan; 8. Revisiting the obsolescing bargain: foreign private ownership in Kazakhstan; 9. Taking domestic politics seriously: explaining ownership structure over mineral resources; 10. The myth of the resource curse.
“Do oil booms inevitably lead countries down a path of rentierism, authoritarianism, and laggard economic growth? Read this fascinating book about the Soviet successor states and find out why the effects of oil vary based on who owns it—the state, or the private sector.”
—Stephen Haber, Stanford University
“Pauline Jones Luong and Erika Weinthal have made a valuable contribution to the resource curse literature. Their book’s focus on the significance of ownership structure in determining whether resource abundance is a boon or a curse is novel, well-argued and supported empirically by a nice natural experiment. In addition, the book provides an accessible review of the oil and gas sector in the energy-rich Soviet successor states over the two decades since independence.”
—Richard Pomfret, University of Adelaide; Johns Hopkins University Bologna Center
“A fundamental premise of political economy is that the consequences of factor endowments for policy and prosperity are conditional on the nature of the political equilibrium in society. Using parsimonious theory, case studies, and econometric tests, this book brilliantly uses this perspective to demolish the confusions of the resource curse literature, showing how politics shapes the ownership structure of the oil sector which in turn determines the impact of oil.”
—James Robinson, Harvard University