The new forums will be named Coin Return (based on the most recent vote)! You can check on the status and timeline of the transition to the new forums here.
The Guiding Principles and New Rules document is now in effect.
Alternative Energy to fix the Middle East?
VishNub
Registered User regular
Registered User regular
Does Oil Hinder Demorcracy by Michael Lewin Ross.
Also,
And Friedman's "First Law of Petropolitics," for which I can't find an online full text. He cites Ross heavily, though.
Basically, in oil rich states, because almost all of the wealth is derived from a single source, the government does not need its citizens. Tax revenue is generated, depending on the state, more or less exclusively from the Oil industry in that country. As a result, the government has no incentive to serve its citizens, leading to the culture of repression we see in economies dominated by a single resource. Africa, the Middle East, Venezuela, and some others are mentioned in the articles.
This is further exacerbated by the tendency in countries with abundant and exploitable natural sources to neglect development in other areas. "Dutch Disease" where the huge success of a single product (oil) inflates a countries currency, meaning that workers in factories, barring a drop in wages, are payed relatively more. This in turn means that in order to maintain profit margins, goods sold internationally cost relatively more than an equivalent product produced elsewhere. Unless there is intervention, these other industries tend to wither, leading to more complete dependence on oil.
Further, in these countries higher education tends to be totally focused on producing more of that good. Geology, Engineering, and Chemistry flourish, at the cost of other career paths.
Anywho, Friedman argues that to stop this cycle we have to reduce the price of oil (or whatever other resource we're talking about) to a point where the country in question needs to develop other industries, and use its citizens.
To drop the price of oil, it follows that we must decrease demand. Given that energy needs are not going to drop anytime soon, to produce democracy in resource centered economies, we need to develop alternative energy sources.
My problem with this, and any purely economic explanation for anything (I'm looking at you, Marx), is that it ignores the obvious cultural and historical factors at work in the Middle East and Africa especially.
Anyways, discuss.
Ross' Conclusion section wrote:This article has four main findings. First, the oil-impedes-democracy claim is both valid and statistically robust; in other words, oil does hurt democracy. Moreover, oil does greater damage to democracy in poor states than in rich ones, and a given rise in oil exports will do more harm in oil-poor states than in oil-rich ones. Hence, oil inhibits democracy even when exports are relatively small, particularly in poor states.
Second, the harmful influence of oil is not restricted to the Middle East. Oil wealth has probably made democratization harder in states like Indonesia, Malaysia, Mexico, and Nigeria; it may well have the same affect on the oil-rich states of Central Asia.
The third finding is that nonfuel mineral wealth also impedes democratization. While the major oil exporters are concentrated in the Mideast, major mineral exporters are scattered across Africa, Asia, and the Americas; this group includes many states where progress toward democracy has been halting or elusive, including Angola, Chile, the Democratic Republic of Congo, Cambodia, and Peru.
Each of these findings runs counter to the assumptions of earlier scholars that the antidemocratic effects of oil--if they existed--were restricted to the Middle East, that they influenced only states that were almost wholly dependent on oil, and that they did not extend to the mineral-rich states.
The fourth finding is that there is at least tentative support for three causal mechanisms that link oil and authoritarianism: a rentier effect, through which governments use low tax rates and high spending to dampen pressures for democracy; a repression effect, by which governments build up their internal security forces to ward off democratic pressures; and a modernization effect, in which the failure of the population to move into industrial and service sector jobs renders them less likely to push for democracy. The links between mineral wealth and authoritarianism are more elusive: the mineral exporters appear to suffer from a rentier effect but not a repression effect, and there is only weak evidence that they are afflicted by a modernization effect.
Collectively, these findings should help vindicate two very different theories of comparative politics: modernization theory, which after falling out of favor in the 1970s and 1980s made a strong comeback in the 1990s; and the theory of the rentier state, which has long been championed by Middle East area specialists but overlooked by scholars of democratization.
They also highlight the value of bringing cross-national quantitative studies into closer contact with area studies. Global studies of democracy have generally overlooked the Mideast, a practice that is difficult to justify methodologically (since it arbitrarily truncates the researcher's sample of states) and one that has contributed to a belief that the Middle East region is sui generis. Of course, the history and culture of the Mideast are exceptional: note the enormous coefficient on the Mideast dummy variable in Table 4. But excluding Middle Eastern states from large-N studies of democracy can only widen the gap between area studies and the rest of political science. It also deprives mainstream political science of the many insights developed by area studies scholars--insights that, like the oil-impedes-democracy claim, may turn out to have general applications.
Finally, these findings have implications for the fate of resource-rich states across the developing world. Many of the world's most troubled states have high levels of oil and mineral wealth. Earlier studies have shown that resource wealth tends to reduce economic growth and to increase the likelihood of civil war. This article suggests there is a third component to "resource curse": authoritarian rule.
These three effects may interact in pernicious ways, creating a "resource trap." Authoritarian governments may be less able to resolve domestic conflicts and hence more likely to suffer from civil war. Slow growth may make domestic unrest tougher to resolve; civil wars, in turn, wreak economic havoc. There is nothing inevitable about the resource curse: states like Malaysia, Chile, and Botswana have done relatively well despite their oil and mineral wealth. Yet most others have found--like King Midas--that their resource wealth can be an unexpected source of grief.
Also,
And Friedman's "First Law of Petropolitics," for which I can't find an online full text. He cites Ross heavily, though.
Basically, in oil rich states, because almost all of the wealth is derived from a single source, the government does not need its citizens. Tax revenue is generated, depending on the state, more or less exclusively from the Oil industry in that country. As a result, the government has no incentive to serve its citizens, leading to the culture of repression we see in economies dominated by a single resource. Africa, the Middle East, Venezuela, and some others are mentioned in the articles.
This is further exacerbated by the tendency in countries with abundant and exploitable natural sources to neglect development in other areas. "Dutch Disease" where the huge success of a single product (oil) inflates a countries currency, meaning that workers in factories, barring a drop in wages, are payed relatively more. This in turn means that in order to maintain profit margins, goods sold internationally cost relatively more than an equivalent product produced elsewhere. Unless there is intervention, these other industries tend to wither, leading to more complete dependence on oil.
Further, in these countries higher education tends to be totally focused on producing more of that good. Geology, Engineering, and Chemistry flourish, at the cost of other career paths.
Anywho, Friedman argues that to stop this cycle we have to reduce the price of oil (or whatever other resource we're talking about) to a point where the country in question needs to develop other industries, and use its citizens.
To drop the price of oil, it follows that we must decrease demand. Given that energy needs are not going to drop anytime soon, to produce democracy in resource centered economies, we need to develop alternative energy sources.
My problem with this, and any purely economic explanation for anything (I'm looking at you, Marx), is that it ignores the obvious cultural and historical factors at work in the Middle East and Africa especially.
Anyways, discuss.
VishNub on
0
Posts
A population that doesn't give a rat's ass about a location will have no problem making it suck.
This goes much further than just oil in the Middle East.
It works in the other places mentioned, Africa and Venezuela.
It seems that the idea is financial punishment in exchange for freedom. Provided this would work (which I'll believe it does for purposes of the argument), I'm not sure this is such a great idea. Given the fragility and corruption of many of these governments, it seems that there's a significant chance of failure and screwing over both economy and populace.
Incentive to develop an economy?
The desert isn't completely useless. They can grow dates, and make glass cheaply!
But could it sustain the current population?
Like with any other population, if you have a massive resource, you get a huge population.. once that resource dries up...
Of course, wars make great predators.
Can anything?
We're overdue for another black plague. Whatever happened to Sars? Avian flu hasn't been discounted yet, so there you go.
That or we need to brain wash all the clerics in to being pro-choice.
We may need a psionicist to break through those Will saves.
Well, I mean, on the other hand, there are a number of these countries where the economic resources from the oil are not exactly being evenly distributed.
Or distributed at all, for that matter.
But there are definitely some countries where this would screw things up badly.
There would definitely be some nasty complications if this happened, like, all of a sudden. But if we phased it in over 10-15 years, that might work a little better.
It wouldn't be an immediate cessation and they'd be capable of investing in other aspects to have a diversified economy before things start to tank. Case in point: Dubai.
As for a response to the OP, no taxation without representation. No democracratic government, but no taxes? No problem.
I'm curious, did he mention Norway? Because that country took the anti-Friedman approach to dealing with natural resources, and they're doing pretty well (state-run industry, a nationwide petroleum fund to protect against flucuating markets, etc). Very different countries, I know, but the comparison is still interesting.
Russia's Oily Future
This and Friedman's articles are interesting when I read them a while back, though a little facile (though I find Foreign Policy tends to try and over simplify everything).
One thing missing from Vish's quite good OP is the winner-take-all nature of government that emerges, which is what largely kills democracy. When the state neglects the rest of the economy and other forms of development, what economic power remains (which would be the oil/mineral sector) is heavily controlled by the state. Government, then, represents not only political power but economic power - losers are not going to give that up.
I feel bad for looking down on FP, but foreign affairs and the economist are really much better.
Actually, population growth trends are starting to decline and we'll likely plateau in the 9 billion area.
that said, i don't like the assumption that democracy is something akin to the pinnacle of human achievement in teh way of governing, or the ultimate goal. it is the system that works best for an educated and liberalized populace, but having a democracy is no guarantee of liberalization or advancement of a populace.
i used to read FP, but i haven't for the past two years, due to not having free copies to steal from my parents' bookstore while i'm at college. what changed?
disclaimer: i am mildly inebriated.
Yeah, I noticed that too. It turned into an expanded version of the international section of Newsweek.
Maybe they dumbed it down to reach a broader audience when interest in foreign affairs went up these last few years?
http://www.amazon.com/Libya-Since-Independence-Oil-State-Building/dp/0801485355/sr=8-1/qid=1165076240/ref=sr_1_1/002-1304419-4876850?ie=UTF8&s=books
I took a class with him and it's pretty obvious that states in which about 90% or more of the GDP requires less than 5% of the population to create will not become representative anytime soon.
If the state doesn't need actual legitimacy and doesn't really need the people to create wealth, then it's pretty obvious that representative forms of government will not emerge naturally. There is no literally no incentive for those in power to give up power, and as long as the populace can be bribed and/or intimidated into submission, then no economic and/or political change will emerge.
Iran is probably the best example, while Oil can shore up the states power, i dont see how it made a democratic nation elect somone less reformist than the previous government..
Also, the friedman graph is laughable "Nigeria privatizes oil", gee how as that worked out for you Nigeria?