World politics and international energy markets
Published online by Cambridge University Press: 22 May 2009
- Review Essays
- Copyright © The IO Foundation and Cambridge University Press 1987
1. Some exceptions include Franklin Tugwell, “Energy and Political Economy,” Comparative Politics 13 (10 1980), pp. 1–14.Google Scholar Gerald Garvey's review essay of policy research priorities and paradigms is also quite exceptional. See Garvey, , “Research on Energy Policy: Process and Institutions,” in Energy and the Social Sciences, Hans, Landsberg, ed. (Washington, D.C.: Resources for the Future, 1974).Google Scholar An excellent review of the literature on energy in the economics discipline is Dermot Gately, “A Ten-Year Retrospective: Opec and the World Oil Market,” Journal of Economic Literature 22 (09 1984), pp. 1100–1114.Google Scholar
2. The best critical bibliography by far is Ernest, J. and Ann-Marie, Yanarella, Energy and the Social Sciences; A Bibliographic Guide to the Literature (Boulder: Westview, 1982).Google Scholar
3. Although now less visible in importing countries during the “glut,” the topic evoked strong feelings during interviews that I conducted in 1980–1981 at OPEC headquarters in Vienna, at the International Energy Agency in Paris, and with national policy makers in other European countries, the Middle East, the United States, and several non-oil-exporting developing countries. Continued market uncertainty has again raised the specter of politicization.
5. Peter Evan's work on Brazil, for example, relies heavily on studies of the petroleum sector, but energy per se is incidental to the analysis. Some of the writing on regimes below confirms the primary direction of borrowing. See Evans, , Dependent Development (Princeton: Princeton University Press, 1979).Google Scholar
6. For varying definitions of energy see Earl, Cook, Man, Energy, Society (San Francisco: W. H. Freeman, 1976)Google Scholar; Sam Schurr et al., Energy in America's Future (Baltimore: Johns Hopkins University Press for Resources for the Future, 1979)Google Scholar; and Melvin, Conant and Fern, Gold, The Geopolitics of Energy (Boulder: Westview, 1978).Google Scholar For the relationship between policy making in renewable and in commercial fuel areas, see Willard, Johnson and Wilson, Ernest J. III, “Energy Crisis in Africa,” Daedalus (Spring 1982), pp. 211–42.Google Scholar
8. Robert, Keohane and Joseph, Nye, “World Politics and the International System,” in Bergston, C. Fred, ed., The Future of the International Economic Order1 (Lexington, Mass.: Lexington Books, 1973), p. 116.Google Scholar
10. Nazli, Choucri, “International Political Economy: A Theoretical Perspective,” in Ole, Holsti, Randolph, Siverson, and Alexander, George, ed., Change in the International System (Boulder: Westview, 1980), p. 10.Google Scholar
11. Adelman, M. A., The World Petroleum Market (Baltimore: Johns Hopkins University Press for Resources for the Future, 1971).Google Scholar
14. Edwin, Deagle, Bijan, Mossavar-Rahmani, and Richard, Huff, Energy in the 1980's: An Analysis of Recent Studies(New York: Group of Thirty, 1981).Google Scholar
15. Robert, Gilpin, U.S. Power and the Multinational Corporation (New York: Basic, 1975), p. 41.Google Scholar
16. Joseph, Nye, “Maintaining a Nonproliferation Regime”, in George, Quester, ed., Nuclear Proliferation (Madison: Wisconsin University Press, 1981).Google Scholar
17. Robert, Keohane and Joseph, Nye, Power and Interdependence (Boston: Little, Brown, 1977), chap. 3.Google Scholar
18. Rusett, Bruce “The Mysterious Case of Vanishing Hegemony; or, Is Mark Twain Really Dead?” International Organization 39 (Spring 1985), pp. 207–32CrossRefGoogle Scholar; and Susan Strange's insightful critique in the special issue of International Organization devoted to regimes, “Cave! hic dragones: A Critique of Regime Analysis,” International Organization 36 (Spring 1982).Google Scholar
19. Horst, Mendershausen, Coping with the Oil Crisis (Baltimore: Johns Hopkins University Press for Resources for the Future, 1976)Google Scholar; Oystein, Noreng, Oil Politics in the 1980's. (New York: McGraw-Hill, 1978)Google Scholar; Hans, Jacob Bull-Berg and Magne, Holler, The International Oil Regime—The Conceptualization of a Non-Contractual Regime (Polhodga, Norway: Fridtjof Nansen Institute, 1983)Google Scholar; and Bull-berg, Restoring the Oil-Smeared Eagle: The U.S. Oil Regime Strategy, 1973–1983 (Polhogda, Norway: Fridtjof Nansen Institute, 1984).Google Scholar
23. Keohane, Robert O., “The Theory of Hegemonic Stability and Changes in International Economic Regimes, 1961–1911,” in Holsti, Siverson, and George, Change in the International System, pp. 131–62.Google Scholar See also Keohane, , “The Demand for International Regimes,” International Organization 36 (Spring 1982), pp. 325–55CrossRefGoogle Scholar; “Hegemonic Leadership and U.S. Foreign Economic Policy in the ‘Long Decade’ of the 1950s,” in William, Avery and David, Rapkin, eds., America in a Changing World Political Economy (New York: Longman, 1982)Google Scholar; “State Power and Industry Influence: American Foreign Oil Policy in the 1940s,” International Organization 36 (Winter 1982), pp. 165–83CrossRefGoogle Scholar; and After Hegemony (Princeton: Princeton University Press, 1985).Google Scholar
24. Keohane, “Hegemonic Leadership.”
25. Keohane, “The Demand for International Regimes.”
27. Quandt, Saudi Arabia in the 1980's; Theodore, Moran, Oil Prices and the Future of OPEC(Washington, D.C.: Resources for the Future, 1978)Google Scholar, and especially his “Modeling OPEC Behavior: Economic and Political Alternatives,” International Organization 32 (Spring 1981).Google ScholarSinger, S. Fred, “Bet on the Market,” Foreign Policy 45 (Winter 1981–1982).Google Scholar
29. Sergio, Koreisha and Robert, Stobaugh, “Limits to Models,” in Robert, Stobaugh and Danial, Yergin, eds., Energy Future (New York: Random, 1979).Google Scholar
30. Ole, Holsti, “Foreign Policy Formation Viewed Cognitively,” in Robert, Axelrod, ed., Structure of Decision (Princeton: Princeton University Press, 1976).Google Scholar See also Edward, Mitchell, “Energy and Ideology,” for a study of this issue among legislators (Washington, D.C.: American Enterprise Institute, Reprint No. 77, 1977).Google Scholar
31. Henry, Nau, “The Evolution of U.S. Foreign Policy in Energy: From Alliance Politics to Business as Usual,” in Robert, Lawrence and Martin, Heisler, ed., International Energy Policy (Lexington, Mass.: Lexington Books, 1980), pp. 37–38.Google Scholar
32. Leon Lindberg, Energy Syndrome. Robert Paarlberg does an excellent job of presenting alternate domestic and international explanations for change in another world market, in his “Three Political Explanations for Crisis in the World Grain Market,” in Avery and Rapkin, America in a Changing World Political Economy.
33. Paul, Kemesis and Wilson, Ernest J. III, The Decade of Energy Policy: Policy Analysis in Oil Importing Countries (New York: Praeger, 1984), chap. 7.Google Scholar
34. Linear projections continued even after the two OPEC shocks, both in the popular press and in more specialized arenas. Interesting counterpositions that discuss volatility include James, Cook, “The Great Oil Swindle,” Forbes, 15 03 1982, pp. 99–108Google Scholar; Danial Yergin and the other authors in Global Insecurity anticipate further fluctuations. Hedging their bets on linear change are Leo Solomon and Webster, L. Duvall, “Less Volatile Scenario for the 80's,” Geophysics (06 1982).Google Scholar
35. John, Sawhill et al., Report of the Trilateral Energy Task Force to the Trilateral Commission, Managing the Transition (New York: 1978), px.Google Scholar
36. U.S. Central Intelligence Agency, The World Oil Market in the Years Ahead, 1979, p. 2.Google Scholar
37. Deagle et al., Energy in the 1980's.
38. Henry, Kissinger, A Speech before the 6th special session of the UN General Assembly, Dept. of State, Bulletin, 6 05 1974, pp. 477–83.Google Scholar
40. Louis, Turner, Oil Companies in the International System (London: Allen & Unwin, 1980), pp. 22–24.Google Scholar
41. For a balanced view, see Mohnfeld, J., “Changing Patterns of Trade,” in Petroleum Economist (08 1980), pp. 329–32.Google Scholar
42. Richard, Caves, “Industrial Organization, Corporate Stretegy and Structure,” Journal of Economic Literature 18 (03 1980), pp. 64–92.Google Scholar
43. See Kemezis, and Wilson, , Decade of Energy Policy, chap. 2. Brian Levy, “World Oil Marketing in Transition,” International Organization 36 (Winter 1982), pp. 113–33.Google Scholar
44. Wilson, Ernest J. III, “The Petro-Political Cycle in World Oil Markets,” in Enders, Richard L. and John, Kim, eds., Energy Resource Development: Politics and Policies (Westport, Conn.: Greenwood Press, 1986).Google Scholar
45. By politicization I mean the increased salience of political criteria in actors' decision making in a market. Some political criteria are always present in important markets, but at some times, for strategic reasons, they rank higher in the decision hierarchy than at others. Politicization is especially likely in volatile markets for such economically central products as oil; governments are more likely to intervene to reduce uncertainty. The PPC discriminates between two forms of politicization—simple and complex. Simple politicization refers to one-time conflicts over market outcomes when political criteria become more important and usually involves an increased role for government, as in the use of the “oil weapon.” This parallels Keohane and Nye's distinction between structure and process level conflicts. See note 8 above. Although the purposes are usually strictly partisan, one-time simple politicization often reinforces preferred commercial gains—better terms on a barter deal, bargaining over a higher price, and so forth. Complex politicization is more far-reaching in its ambitions and impact. It occurs when there are sustained and powerful challenges to the basic rules and norms of a system. Here the struggle between the parties, for example, is not whether prices should be higher or lower, but over who should legitimately determine prices and in what ways. The PPC model predicts that successful politicization is more likely to occur at the peak of the business cycle than at the trough.
47. Politicization in the pre-1970 cycles was perhaps somewhat less acute, in part because the conflicts occurred largely among the industrialized countries. A study explicitly contrasting past intra-Western oil conflicts with more recent North-South ones would be instructive.
48. I am grateful to Edward Morse for sharpening my focus on this point.
49. All three wrote in Foreign Policy 14 (Spring 1974)Google Scholar: Stephen Krasner, “Oil Is the Exception,” Zuhayr Mikdashi, “Collusion Could Work,” and C. Fred Bergston's reply. It was his earlier piece in the same magazine which partially provoked the exchange.