sharing in governance of extractive industries

New Study: Oil and Regime Stability in Azerbaijan

by Farid Guliyev
The recent resource curse literature suggests that oil promotes authoritarian regime stability. Yet the causal linkages underpinning the political resource curse remain less well understood. Using a case study of Azerbaijan, this article first examines how oil revenues benefited the existing regime that has been in power for nearly 20 years. Second, it looks more closely at how the regime managed to survive the adversity of oil effects. Some support is found for three of the conventional causal links derived from existing theories of resource politics: patronage spending, repression, and economic diversification aversion. Historical-institutionalist theories are shown to be less adequate. Finally, to provide a more complete explanation for durable authoritarianism in Azerbaijan, the author proposes one additional factor: policy learning. The Azerbaijani regime's ability to navigate fiscal revenue volatility was predicated upon the decision to adopt a state fund for oil revenue management early on, before the onset of the oil boom. This policy innovation was drawn from foreign models and promoted by international financial organizations. Therefore, leaders' policy choices and their capability to draw lessons and to borrow policies from abroad may be crucial variables mediating oil's influence on regime stability in resource-reliant states, and thus deserve more scholarly attention.
Citation: Guliyev, Farid (2013) 'Oil and Regime Stability in Azerbaijan', Demokratizatsiya 21(1): 113-147.
Figure above: Azerbaijan: total oil production (Source: EIA, International Energy Statistics, October 16, 2012)

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