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Managing the Oil Wealth: OPEC's Windfalls and Pitfalls

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... The resource curse was found to mostly pertain to developing states that lacked strong institutions in the first place (Gelman and Marganiya 2010). Hence, when the Soviet Union abruptly disintegrated in 1991 and produced five newly independent petroleum-rich states with weak institutions -Russia, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistanobservers were quick to doom them to similar fates (Karl 1999, 46;Sabonis-Helf 2004, 159-60;Amuzegar 2001). ...
... As was shown above in Chapters 1 and 2, the resource curse was found to mostly affect developing states that lacked strong institutions to begin with (Gelman and Marganiya 2010) -making these states susceptible to the further formation of rentier states (and hence, the negative outcomes). Thus, when the Soviet Union abruptly disintegrated in 1991 and produced five newly independent petroleum-rich states with weak institutions -Russia, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistanthey were expected to follow this path (Karl 1999, 46;Sabonis-Helf 2004, 159-60;Amuzegar 2001). The fact that they did not uniformly follow the path allows not only for a study of this 'natural experiment,' but also for a closer look at the mechanisms through a small-n case study. ...
... Because the curse was found to mostly pertain to developing states that lacked strong institutions (Gelman and Marganiya 2010) I concentrated on the former Soviet Union that produced five newly independent petroleum-rich states with weak institutions -Russia, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistanupon its disintegration in 1991. The fact that they did not uniformly follow the projected path (Karl 1999, 46;Sabonis-Helf 2004, 159-60;Amuzegar 2001) allowed not only for a study of this 'natural experiment,' but also for a closer look at the mechanisms by means of a small-n case study. ...
Thesis
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Why does the resource curse affect some mineral-rich states but not all? While its likelihood to paradoxically produce an array of negative outcomes such as unbalanced economic growth, authoritarianism and impoverished populations in developing states is well-documented, it remains unclear why it only appears to befall some, but not all states. Two otherwise similar mineral-rich, newly independent Central Asian states Turkmenistan and Kazakhstan present an opportunity to study this puzzle as they have developed in diverging trajectories along the resource curse path after the disintegration of the Soviet Union. While Turkmenistan is notorious for its classical rentier state with the worst development/poverty indicators in the region, Kazakhstan improved its business environment, fiscal sector and Human Development Index indicators. In answering this puzzle the paper develops the rentier state model that lies at the heart of the resource curse mechanisms and outcomes, followed by an integrative case study based on this model. The main findings suggest that the difficulty of extraction factor characteristic of Kazakh oil fields has led the government to abandon its command economy (in contrast to Turkmenistan) and rely heavily on foreign investment and technology. Large-scale foreign privatization of the petroleum sector has led to a series of legislative, fiscal and expenditure reforms that continue to hinder the formation of a classical rentier state. The thesis also concludes that private ownership structure – and its observed positive impact – might help institutionalize reforms and better manage resource wealth in other mineral-rich developing states.
... These questions form the foundation for this study, but they would have seemed strange to someone who was looking at these issues just thirty years ago. At the beginning of the oil boom in the 1970s, development economists pointed to the massive capital influx into oil exporting states, possibly the largest peacetime redistribution of capital (Amuzegar, 2001), as a historic opportunity. Developing oil exporting states, which had historically lacked the capital for investment and industrialization, were now flooded with funds. ...
... The oil price shocks of 1973 and 1979 brought a surge of capital into the oil exporting countries of the Organization of Petroleum Exporting Countries (OPEC): Algeria, Indonesia, Iran Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates (UAE), and Venezuela. In fact, the capital surge into OPEC countries was the largest non-war redistribution of wealth in history (Amuzegar, 2001;Tsalik, 2002). This led to the expectation that these oil exporters might have finally broken the cycle of dependency. ...
... Amuzegar (2001) is actually referencing his own work in 1975 where he reaches these conclusions(Amuzegar, 1975). ...
... A Organização dos Países Exportadores de Petróleo deve sua emergência e consolidação a uma combinação de circunstâncias: a assimetria de poder entre as empresas petrolíferas e os governos dos países produtores e o erro estratégico das primeiras em impor reduções unilaterais de preços, a união dos países exportadores e sua disposição em desafiar um poderoso oligopólio internacional e, finalmente, a combinação de eventos além do escopo de decisão tanto de países produtores quanto de empresas de petróleo (Amuzegar, 1999). ...
... Isto levou à criação -ainda que em pequena escala -de um mercado livre de compra e venda de petróleo fora dos auspícios das Sete Irmãs (Yergin, 1992). Ademais, com a capacidade produtiva dos países exportadores crescendo acima do aumento da demanda global por petróleo, entendia-se que o aumento das exportações de petróleo em um ambiente de preços declinantes consistia na única forma de se proteger o volume das rendas (Amuzegar, 1999). ...
... Também detinham 35% da frota mundial de petroleiros uma porção significante do restante da capacidade de transporte através de contratos de longo prazo com os proprietários (Evans, 1986 Uma vez que a maior parte dos países exportadores dependia das receitas de petróleo para suas despesas em divisas, financiamento de seu desenvolvimento e mesmo orçamento do governo, dois cortes sucessivos nos preços do petróleo foram motivo suficiente para justificar uma reação articulada (Yergin, 1992 Durante seus primeiros dez anos de existência, a OPEP logrou êxito em evitar novas reduções dos preços oficiais de seu petróleo, apesar de não ter conseguido reverter a decisão das companhias de petróleo com a reduções de 1959de e 1960de . Entre 1960de e 1971 entanto, as companhias se recusaram a negociar com a OPEP como uma entidade intergovernamental, e os membros da Organização também continuavam a lidar com as petroleiras de forma individual, recusando-se a ceder sua soberania à OPEP e permitir que a mesma negociasse em seus nomes (Amuzegar, 1999) (Amuzegar, 1999). O documento também pleiteava a participação do governo na indústria de forma a garantir maior controle sobre as concessionárias estrangeiras e a auferir maiores rendas. ...
... An anti-poor bias in extractive-country growth may nevertheless arise due to a series of concurrent dynamic sectoral mechanisms as the extractive resource sector grows and Dutch Disease pressures ensue. These mechanisms have been loosely suggested to be: A crowding out of environmental resources, like fresh water, that the poor rely upon (Amuzegar, 1999;Curry, 1987;Power, 2008;Slack, 2009); downward pressure on wages due to a capital-intensive export base (Lal and Myint, 1996, pp. 187-188); displacement-induced poverty as landowners are resettled (Downing, 2002); and a reduction in agricultural sector jobs through Dutch disease effects, agriculture being a sector that is suggested to have special importance in reducing poverty (Ross, 2007;World Bank, 2008). ...
... The limiting factor in including more countries and growth spells in the sample was the availability of quality extractive activity data in some of the poorer countries (cf. Amuzegar, 1999) and the availability of income inequality data in some of the extractive economies. Ross (2007), in particular, has noted this latter limitation in moving the debate forward empirically. ...
Article
There are frequent suggestions that countries specializing in mineral and energy extraction have a type of growth that is bad for the poor. Others claim that extraction-led growth is particularly good for the poor. Both claims are made without the support of substantial empirical evidence. This paper uses longitudinal data on income growth by quintile in 57 developed and developing countries to statistically assess how mineral and energy extraction has affected the relationship between growth and the poor. We can find no evidence that the data support either the claim that extraction-led growth is good for the poor or that extraction-led growth is bad for the poor. This finding does not rule out that extractive activity can have special positive or negative impacts on the poor in some countries or regions. Rather, it simply brings to light that such effects are not evident as a persistent statistical phenomenon in the national level data that are available, which may be why the debate tends to move along without resolution.
... Following the announcement, the OPEC basket oil price rose to around $25/barrel from its December low of $21-22/barrel (see Fig. 6). From a high of $32/barrel just after the meeting, WTI fell to $29/barrel for March delivery at the end of January (Arab Oil and Gas, February 1, 2001). ...
... As can be seen from Tables 3 and 4, there are many differences among OPEC countries in terms of size of their oil reserves and production, their populations, land area, economic structures, even religions. What is common is state ownership of oil resources and oil revenues, and their reliance on oil for export revenues (Amuzegar, 1999). ...
Article
Price volatility has been a central feature of the world oil market over the past several years. Oil prices plunged to around $10/barrel in late 1998 and early 1999, then recovered and soared above $30/barrel in 2000. After seriously misjudging the oil market in 1997–98 and contributing to an oil price collapse, OPEC rallied in 1999–2000 and successfully pushed prices upward but overshot its target. In the first half of 2001 OPEC maintained high but more stable oil prices. Later in the year OPEC struggled to manage falling prices set off by a global recession made worse by the attacks of September 11 and the war on terrorism.
... In many developing countries governance in the resource sector has produced problematic outcomes to varying degrees, the extreme form of which is captured in the concept of resource curse (Auty, 1993;Karl, 1997;Amuzega, 2001;Gary and Karl, 2003;Sala-i-Martin and Subramanian, 2003;Birdsall and Subramanian, 2004;Ross, 2015;Natural Resources Governance Institute (NRGI, 2015). Beyond the established theoretical parameters of resource curse, the Nigerian case demonstrates certain conditions that are not familiar in other resourcebased economies. ...
... The Incapable Hegemon, 1973Hegemon, -1981 The Benevolent Hegemon: Swing Producer, 1982 The Coercive Hegemon, 1986Hegemon, -1996 The Mixed Strategy, 1999-2000 The July 1990July , and average, 1991July -1994 6.1 Share of total exports, selected countries, 1950-1965 209 7.1 Conditions affecting the incidence of cartelization 240 Tables and Illustrations 7.2 Cartelization of international oil 7.3 OPEC cartel strategies , 1973-1999 7.4 Correlation between price and production by time periods 7.5 Correlation between price and production by price movements 7.6 OPEC quotas, 19827.6 OPEC quotas, -19987 Correlation between production and quotas 7.8 OPEC and Saudi Arabian production, quotas, and overproduction, April1982 to December 1995 7.9 OPEC members' overproduction correlated with other members' overproduction, March 1982-July 1990 7.10 Relationship between others' overproduction and own overproduction 8. Tables and Illustrations xiii 2.5 Conflictual aspects of intergroup relations 48 2.6 Cooperative aspects of intergroup relations 49 2.7 The Red Line 55 2.8 Energy demand, 1950-1999 58 2.9 Primary energy consumption, 1950 and 1995, different fuels 59 2.10 Selected OPEC countries' production, September 1972 to April1974 65 2.11 Monthly oil prices, 1973-2000 66 2.12 Spot and official prices, July 1978-July 1983 71 2.13 Oil consumption in barrels per thousand GDP, 1960$) 72 2.14 Oil consumption, 1965-1999 Trends in taxation of petroleum products 75 2.16 Market shares, 1965-1999 76 2.17 OPEC member countries' estimated current account balance, 1972-1998 86 2.18 Changes in control over the vertical production chain 88 2.19 International oil companies' and producing countries' share of product chain 89 ...
... Second, scaling back the fossil-fuel supply industry can also bring transition costs insofar as fossil fuel extraction provides important opportunities for export revenue, employment or wider economic contribution (Mehlum et al. 2006;Torvik 2009;Kurtz and Brooks 2011). Economic diversification has long been an objective of oil exporting countries, often with very little success (Amuzegar 2001). Some studies have indicated that across the whole supply chain, renewable energy delivers more jobs per unit of energy delivered, or per dollar invested, than fossil fuels (IRENA 2011;Blyth et al 2014;Pollin et al 2015). ...
Article
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Carbon emissions—and hence fossil fuel combustion—must decline rapidly if warming is to be held below 1.5 or 2 °C. Yet fossil fuels are so deeply entrenched in the broader economy that a rapid transition poses the challenge of significant transitional disruption. Fossil fuels must be phased out even as access to energy services for basic needs and for economic development expands, particularly in developing countries. Nations, communities, and workers that are economically dependent on fossil fuel extraction will need to find a new foundation for livelihoods and revenue. These challenges are surmountable. In principle, societies could undertake a decarbonization transition in which they anticipate the transitional disruption, and cooperate and contribute fairly to minimize and alleviate it. Indeed, if societies do not work to avoid that disruption, a decarbonization transition may not be possible at all. Too many people may conclude they will suffer undue hardship, and thus undermine the political consensus required to undertake an ambitious transition. The principles and framework laid out here are offered as a contribution to understanding the nature of the potential impacts of a transition, principles for equitably sharing the costs of avoiding them, and guidance for prioritizing which fossil resources can still be extracted.
... Th e oil crisis of 1973 also stimulated research on commodity cartels and the conditions under which producer associations might overcome collective action problems (e.g., Mikdashi 1974 ;Krasner 1974 ;Bergsten 1974 ). OPEC, in particular, has continued to attract scholarly attention and has given way to a vast body of literature (e.g., Skeet 1988 ;Claes 2001 ;Amuzegar 2001 ;Colgan 2014 ). Scholars have also discussed whether and to what extent oil can be used as a weapon, either by oil exporters (Paarlberg 1978 ;Licklider 1988 ;Kelanic 2012 ;Hughes and Long 2015 ) or by major oil importers (Van de Graaf 2013a ). ...
Chapter
Perhaps not since the 1970s has energy policy, technology, and security been so intensely discussed as today. Whether it is the race for energy resources in the Arctic, roller-coaster oil prices, the transition toward low carbon sources of energy, or concerns over nuclear safety, energy continues to make international headlines. Today’s pressing energy challenges have opened up an incredibly vast research agenda. Sadly, political scientists and other social scientists have lagged behind their colleagues from science, engineering, and economics in addressing these issues. While some researchers directed their focus to energy matters and, especially, oil during the turbulent era of the oil shocks, the attention was short-lived. Only recently, after two decades of relative neglect, have political scientists began to rediscover energy as a major area of inquiry (Hughes and Lipscy 2013; Falkner 2014). Given the sheer magnitude, social pervasiveness, policy salience, and long-term nature of today’s energy problems, their interest is likely to persist.
... Many of these states emphasised short-term goals, such as employment generated through infrastructure construction, rather than focusing on the long-term effects of changes in the structure of non-renewable resource revenues. Short-term goals such as these are often driven by political considerations and the desire of political leaders to remain in power, and have failed to achieve expected development outcomes (Amuzegar, 1999;Karl, 1997). ...
Thesis
This thesis explores how capital flows are linked to economic development and proposes an alternative pathway to enhancing livelihoods in the marginal spaces of the global economy, drawing on examples from North America and the Pacific. Mainstream theories of development are largely based on European and North American examples, and argue for a progression of developmental stages from agriculture to industry to services, based on a flow of capital from core to periphery. Such theories are not place-specific, and do not reflect the particular conditions of remote and marginal places. In the peripheral spaces of the global economy, investment opportunities may be limited. An alternative practice is to invest outside the region of capital generation, through the mechanism of a trust fund. I argue that local development can be achieved through investing in global financial markets, in core countries, rather than at the site of capital generation. In this way, local development is not limited to the marginal place where the benefits are to be felt; peripheral capital instead flows into the core to seek out the best investment opportunities. The local development process becomes differently spatialized by engaging global financial markets. Capital generated in the periphery often comes in temporary streams, or windfalls, and benefits decline when the resource is depleted. Such non-renewable resources can be transformed into renewable fiscal ones when capital generated from resource extraction is invested in financial markets through a trust fund. To make non-renewable resources renewable, they can be converted from a physical form into a financial form, thus extending the benefits of capital into perpetuity. This thesis suggests that trust funds may serve as an alternative development mechanism in certain peripheral spaces of the global economy. Trust funds receive a share of resource revenues and increase them through investment. States can establish trust funds as an instrument of government policy, with all citizens as beneficiaries. Trust funds allow for re-spatializing the nature of investment as well as for sustaining it over time. My analysis is based on the examination of six case studies. Two of these are peripheral economies in North America: the state of Alaska in the United States, and the province of Alberta in Canada. Both Alaska and Alberta established trust funds to manage their petroleum revenues. The four remaining cases are independent Pacific island nations: Kiribati, Nauru, Tonga, and Tuvalu. Each of these island nations established a trust fund to manage windfall resource revenues. The performance of these six trust funds has varied, largely reflecting policy choices. I develop a set of six criteria for the management of a successful fund. In this thesis, I ask development practitioners to reimagine the economic spaces of marginal economies and the relationship between core and periphery. I argue for a separation of the sites of capital generation and capital investment, and for transforming non-renewable windfall resources into renewable fiscal ones.
... While economists have long shown that the Dutch Disease is one factor accounting for this negative outcome, IPE scholars have pointed to the critical role that government institutions and policies play in determining the economic wealth of the resource-rich states. 7 IPE scholars have also found links between oil wealth, gender inequality, authoritarian regimes and violence [50][51][52][53][54][55][56][57]. (See Colgan's article on the resource curse and violence in this Special Issue [58].) ...
... According to Mahdavy (1970), Beblawi (1987), Shafer (1994), Noreng (1997) and Amuzegar (2001), the rentier economy has political, social, and cultural effects. Beblawi (1990) argues that a rentier economy creates rentier ethics and mentality. ...
Article
This study is to investigate the problem of connectivity between nationally produced science and national needs. It is a collective case study of two academic departments within Saudi academia, the departments of petroleum engineering at Alpha and Beta Universities. The rationale for using these departments is that Saudi Arabia has an advanced petroleum industry, making petroleum engineering a good case for investigating the connectivity of nationally produced science with national needs. The main tool of the study was in-depth tape-recorded interviews. Twenty-two interviews were conducted, sixteen with current and retired faculty members at the petroleum engineering departments of Alpha and Beta and six with administrators at both universities. In addition, documents and observation were used as tools. The two departments differ in their levels of connectivity with national industry. One is increasingly connected with national industry, while the other is completely isolated from national industry. Historical and regulatory factors play a role in this difference. Four themes were generated from the data: institutional arrangements, positive attitude and self confidence, social construction of the university, and rentier mentality. The data gathered show that the issue of connectivity is beyond the will and abilities of individual scientists; it is a result of organizational efforts of the scientific institutions reinforced by the willingness of the productive sectors to change their behavior toward national scientists.
... One representative overview of the first two decades of Middle Eastern oil wealth catalogues 'the low returns to OPEC investments, useless white-elephant projects, resource waste and moral corruption', adding that the 'real pity' was that even after 20 years of massive resource wealth, most petro-states were 'still not on a secure path toward sustained growth and prosperity'. 8 At home, massive investment in physical and social infrastructure, economic development and diversification generated progress, but overall relatively poor returns: educational systems produced graduates unprepared for the job market, public sectors were bloated and inefficient, average growth rates were lower than in the pre-OPEC period, non-oil sectors were highly subsidised and unproductive, and the region's share of world trade declined. Externally, the region directed most of its oil investment toward the United States, thanks in part to the unique openness of the American economy, the shared security interests of the region's oil producers and Washington, and assiduous US government efforts to 'recoup the American dollars flowing toward oil-producing capitals'. ...
Article
The dramatic escalation in the price of oil over the past seven years has allowed the Middle East and the Gulf states in particular to reap an incredible windfall. Early indications suggest that the region may be optimising these rewards with greater prudence than during past oil booms, by reducing debt, increasing savings and launching meaningful economic reforms. Still, it is hardly certain that mounting revenues will enable the region to successfully overcome the political and economic vulnerabilities inherent in oil-led development. The oil boom has neither saved nor doomed the Middle East, but rather opened new possibilities and heightened existing problems. International interest in ensuring the free flow of energy resources should prompt serious efforts by Washington and other capitals to enhance regional integration, encourage meaningful reform and promote long-term cooperation in cultivating a more stable, prosperous and sustainable future for the Middle East.
... While some of the richer GCC countries in oil-per-capita terms presently have the resources to go on providing most of their citizens with what in some cases amount to little more than sinecures, continuing to do so will exacerbate (and more deeply institutionalise) market segmentation and make private sector labour nationalisation targets much harder to achieve (Forstenlechner and Rutledge 2010). Of equal concern is the contention that the provision of such jobs reduces the average national's incentive to work hard vocationally speaking and their appetite to take business risks (Karl 1997;Amuzegar 1999;Minnis 2000). In the words of Davidson (2009b, p. 149), national employees had now become wholly accustomed to numerous 'material benefits [with] no forms of extraction'. ...
Article
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The Arab Gulf's labour market is being overhauled. The private sector is increasingly being ‘obliged’ to more actively support nationalisation programmes. This study seeks to quantitatively determine the recruitment decisions of the employers. We collated the views of just under 250 UAE-based HRM personnel, in order to identify which factors (social, cultural, economic, regulatory, educational and motivational) are most significant as cited in the relevant literature. Not having the necessary educational qualifications and high reservation wage demands were found to have less of a bearing than does the perceived lack of vocationally orientated motivation and the ambiguities over the differing rights afforded to employees.
... Having said all this, Amuzegar (1999) and others are perfectly correct to highlight the economic logic behind the petrodollar-for-arms relationship, which first surfaced with the oil boom of the 1970s. Amuzegar makes the valid point that the expansion of national defences in the Persian Gulf in the 1970s had very little to do with the actual national needs of the states concerned. ...
Article
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Professor Anoushiravan Ehteshami is Professor of International Relations at the University of Durham. He is also Vice-President of the British Society for Middle Eastern Studies (BRISMES). His most recent publications include The Foreign Policies of Middle East States (co-editor, 2002), Iran and Eurasia (co-editor, 2000) and The Changing Balance of Power in Asia (1998).
... On the other hand, neither is a high coefficient of variation inconsistent with the status of a perfectly competitive producer. For example, if output variations of all producers are essentially random (e.g., governed by weather, unpredictable drilling results, unscheduled maintenance, etc.), then the coefficient of variation for individual producers will necessarily exceed that of the group as a whole (because relative to the random fluctuations in output, the group enjoys greater benefits of diversification than the recent examples include the works by Adelman (1995), Amuzegar (1999), Claes (2001), Mitchell et. al. (2001), and Kohl (2002). ...
Article
We show that standard statistical tests of OPEC behavior have very low power across a wide range of alternative hypotheses regarding market structure. Consequently, it is difficult, given the current availability and precision of data on demand and costs, to distinguish collusive from competitive behavior in the world oil market. This, along with other factors, may account for the largely inconclusive nature of findings so far reported in the empirical literature on OPEC. We apply a new approach for examining alternative hypotheses and find strong evidence of cooperative behavior among OPEC members. Our results also suggest that OPEC’s formal quota mechanism, introduced in 1982 to replace a system based on posted prices, increased transactions costs within the organization. We do not find strong evidence to support the view that Saudi Arabia has played the role of dominant producer within the cartel.
... However, growing competition in the world oil industry since 1947 threatened to steadily erode the price of oil, and with it the potential size of government tax receipts. 16 Amuzegar (1999) summarizes the manner by which deteriorating relations between the producing companies and host governments finally gave birth to OPEC in September 1960. Saudi Arabia and Venezuela are generally regarded as the founding fathers, and the organization numbered 13 members at its peak. ...
Article
We examine government cartelization efforts in crude oil production. Texas and Saudi Arabia are alleged to act as swing producers to maintain the interstate (1933-1972) and OPEC (1973 on) oil cartels respectively. We analyze the political constraints that affected the ability of Texas and Saudi Arabia to act as residual producers within their respective cartels. In the case of Texas, political factors molded individual firm production quotas, advantaging high-cost producers and hence, reducing total cartel net profits. Further, Texas had limited range for adjusting total state production to maintain interstate output at levels consistent with target prices. Saudi Arabia’s role as swing producer within OPEC raises similar questions regarding how cartel output is shared among members, and the extent to which domestic economic and political pressures coming from various member countries may undermine the effectiveness of the cartel. OPEC ‘s coordination problem has been more difficult than that faced by the interstate cartel for a variety of reasons that we explore. Even so, they have not kept the OPEC members in general, and Saudi Arabia in particular, from exerting a strong influence on the level of world oil prices.
Article
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The characterization of spice in Frank Herbert's science fiction novel Dune plays a significant role in world-building and focusing readers' attention on natural enhancements to the human mind. Herbert uses historical and social contexts relevant to real-world spices to create layers of meaning by tapping into emerging trends in ecology, psychology, and politics. These include the historic spice trade, drugs in the countercultural movement, the disciplines of ecology and psychology, and foreign interference in the Middle East. Such linkages help position spice as a valuable commodity as well as a psychoactive substance that various characters must consume to accomplish extraordinary feats. In the world of Dune, everything is dependent on one substance, and although spice may give advantages, it also takes its toll. The consequences of spice consumption on an individual level then mirror the larger ecological disruptions in the novel in the realms of politics and the environment. In this way, spice represents a key feature of world-building that assists in tying the threads of the novel together and driving through to readers the ecological message about the interconnectedness of life.
Chapter
The importance of natural resource revenues in resource-rich countries is one of the main issues in the last two decades. Meanwhile, the major impact of financial development has been neglected during the process of accessing resource-based sustainable economic growth. Therefore, the novelty of this chapter is related to our special focus on the improving impacts of financial development on natural resource rents–human capital nexus in resource-rich countries. Human capital is a critical precondition for economic development. So, to test the main hypothesis, the ARDL rolling regression technique for the case of Iran over the period of 1970–2014 is applied. The empirical results show that through accelerating financial depth and the more relative importance of deposit money banks than the central bank, the impact of resource rents on human capital accumulation is improved in the long run. However, such a finding is not approved by the multilateral financial development index.
Article
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It is commonly presumed that economies specializing in mining and oil production have high national income inequality. The research testing this proposition is equivocal, no doubt because of small sample sizes and missing inequality data for the majority of mining and oil economies. This paper makes use of a large sample of income inequality data that is comprehensive in its coverage of mining and oil economies. Mine production is found to cause higher national income inequality on a gross, pre-tax basis and a net, post-tax and post-redistribution basis. Botswana is prime example of a mining economy having both high gross and net income inequality. Oil production, on the other hand, does not cause higher gross or net income inequality. If anything, oil is associated with reduced gross and net income inequality. The mechanism for this difference from mining is not clear.
Article
Under neoliberal conditions that privilege foreign investors and call for the retreat of the state, some oil- and mineral-dependent countries in the Global South outperform others. To investigate what accounts for this variation in economic development among these countries, this study tests hypotheses derived from resource curse and dependency/world systems literatures using a dataset of 36 oil- and mineral-dependent countries in the Global South from 1984 through 2010 and panel methods of data analysis. The results show that state capacity and debt dependence shape uneven development outcomes among these countries. The implications for resource curse and dependency/world systems theories are discussed.
Chapter
This chapter reviews the general history of Organization of the Petroleum Exporting Countries (OPEC) and evolution of models explaining its role in the world’s oil market in the context of key events. OPEC’s varying conduct over time implies that no single model fits its behaviour. OPEC’s behaviour and pricing power cannot be generalized—it is dynamic and context-specific and is influenced by market conditions, the internal dynamics within OPEC, its interactions with non-OPEC producers, and the strategic objectives of its key member, Saudi Arabia. It concludes that although OPEC believes that oil will continue to play a role in the world’s energy mix, there is a clear recognition that in the face of climate change policies, economic diversification remains the only viable long-term response.
Chapter
In view of the expected persistence and resilience of the driving forces of human-induced climate change, it is generally acknowledged that even a far-reaching global mitigation effort will need to be complemented by national proactive actions towards adapting to cope with the impacts of future climate uncertainty and its imminent threat to human security. There seems to be a consensus among social scientists that without tenacious preventive measures, prolonged environmental degradation along with climate change will overstretch many societies’ adaptive capacities, which may result in internal destabilization processes with diffuse conflict structures.
Article
Embodied a "girl's best friend" by Marilyn Monroe, diamonds have recently reappeared in the media in the guise of a "guerrilla's best friend:" precious stones financing armed groups responsible for tens of thousands of deaths in Angola, DR Congo, or Sierra Leone. These so-called "conflict" or "blood" diamonds have come to symbolize the "heart of the matter" in the "heart of darkness:" the chief prize of greedy warlords rampaging a lost continent.
Article
Brazil–Russia–India–China–South Africa (BRICS) is a popular yet poorly conceptualized group. This article builds a parallel between BRICS and OPEC in order to assess the former using a weak cognitivist version of the regime theory. The five countries created an international regime whose members cooperate in view of acquiring, collectively and individually, increased influence in international financial and economic institutions. As they do not concern this domain, the diverging interests of the five members do not hamper the rather limited socialization process at work and the implicit development of the regime. However, they will most likely prevent BRICS from reaching generalized political cooperation. Consequently, the group can be expected to increase its influence significantly in comparison to the present level but not to become one of the world's leading actors.
Article
Economic crisis has been a central catalyst to Third Wave democratic transitions by contributing to authoritarian breakdown, yet crises in oil-exporting states have generally failed to catalyze such breakdowns, which are a crucial precondition to democratization. This article argues that oil wealth produces two distinct political trajectories, depending on its timing relative to the onset of late development. The dominant trajectory in the oil-exporting world is durable authoritarianism which has forestalled all but a few regime collapses. And, when the alternate trajectory produces vulnerable authoritarianism, oil-catalyzed authoritarian breakdown tends to generate new authoritarian regimes. I use case materials from Iran and Indonesia during the 1960s and 1970s to illustrate the two oil-based trajectories, and I conduct a broader test of the theory against data for 21 oil-exporting, developing countries, which provides suggestive support for a two-path theory of oil-based aturhoritarian persistence.
Article
The introduction of postgraduate programmes at the Institute of Education, Universiti Brunei Darussalam indicates that educational research will play a central role in teacher education. While there is widespread agreement on the appropriateness of action research, little consideration has been given to the degree to which it is compatible with cultural and political expectations of the teacher's role. This paper argues that rather than improve educational practice as envisioned by constructivists, action research may be used by the state to legitimize existing educational policies. Since schools are a major socialization agency in this small, Malay-Islamic state, it will be difficult for teachers to modify their traditional teaching and problem-solving strategies, let alone question educational policies. The paper suggests that when interpreted within a broader political framework, action research is likely to be appropriated by the state to delimit research and legitimize existing policies and social arrangements of the school, thereby strengthening the status quo.
Article
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