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Pursuing foreign investment for nationalist goals: Venezuela's hybrid resource nationalism

Published online by Cambridge University Press:  02 May 2018

Antulio Rosales
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Abstract

Scholarship in international political economy (IPE) has noted the rise of resource nationalism in since the early 2000s. Despite the increased presence of state regulation in the resource sector, resource nationalism has not been incompatible with foreign investment. This article contributes to better understand resource nationalist policies that emerged in recent years and offers new theoretical insights to explain state-IOC relations by integrating obsolescing bargaining theories and constructivist approaches. Drawing on the case of Venezuela, this article explains how the Chávez regime pursued a hybrid model of control and welcoming of investments in the oil sector. The article argues that both bargaining insights and ideational considerations are important in explaining this model. In the context of high oil prices and sunk investments, it is unsurprising that a leftist government would seek to renegotiate contracts to seek better deals from extractive companies. Yet, focusing exclusively on those incentives misses important ideational drivers for the government to keep investors in the country. For Chávez's government, effecting changes in the oil policy was possible after waging an intense battle with its NOC, PDVSA, over control. Association with foreign investment became crucial to build its socialist model and to control its own company.

Keywords

state-IOC bargainobsolescing bargainPDVSAVenezuelaHugo Chávezresource nationalism
Type
Research Article
Information
Business and Politics , Volume 20 , Issue 3 , September 2018 , pp. 438 - 464
Copyright
Copyright © V.K. Aggarwal 2018 and published under exclusive license to Cambridge University Press 

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Footnotes

I would like to thank Eric Helleiner, Kathryn Hochstetler, Alex Latta, Paul Haslam, Bruce Muirhead, Masaya Llavaneras Blanco, Rhys Machold, Riitta-Ilona Koivumaeki, and two anonymous reviewers for very helpful comments and suggestions to previous drafts of this article. I am also indebted to the staff of the Juan Pablo Pérez Alfonso Library at the Ministry of Oil in Caracas for their support during my fieldwork in 2014 and over two dozen informants who graciously gave their time to answer my questions. An earlier version of this paper was presented at the Canadian Association for the Study of International Development (CASID) Annual Congress in 2017 at Ryerson University, Toronto.

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