A Paradox of Plenty? Rent Distribution and Political Stability in Oil States

Abstract

Resource curse theory claims that resource abundance encourages violent conflict. A study of 37 oil-producing developing countries, however, reveals that oil states with very high levels of oil revenue are remarkably stable. An analysis of the ways in which governments spend oil revenues identifies two distinct types of rentier systems - the large-scale distributive state and the patronage-based system - which are strongly linked to instability or its absence. However, some deviant cases, such as Equatorial Guinea and Gabon, illustrate the need for further research. Apparently, the notion of a "paradox of plenty" has neglected rentier mechanisms that avoid conflict.

Keywords: Resource Curse, Paradox of Plenty, Oil, Rentier State, Violent Conflict, Political Stability, Developing World

JEL Classification: N5, N 50, O 13