For those scholars who have bemoaned the “commodity determinism” that has characterized much of the resource curse literature, there has been, in recent years, a new crop of studies that has sought to deepen and broaden the scope of inquiry and to highlight variations in features, processes, and outcomes in mineral-rich states. These studies have done so in two ways: first, by demonstrating, via careful empirical work, that despite the supposed uniformity, mineral-rich states in fact exhibit a variety of policy environments, institutional arrangements, and experiences; and second, by tracing the pathways whereby certain variables, and combinations of variables—related to such things as institutional beginnings, leadership decisions, and competing cleavage structures—contribute to particular outcomes, as opposed to merely identifying outcomes.

The result, to date, has been a small but refreshing set of “conditional theories” about how institutional quality mediates the relationship between mineral wealth and outcomes. (See, for example, Thad Dunning, Crude Democracy, 2008; Miriam Lowi, Oil Wealth and the Poverty of Politics, 2009; Benjamin Smith, Hard Times in the Land of Plenty, 2007). It is in this vein that Pauline Jones Luong and Erika Weinthal's new book, Oil Is Not a Curse, which builds upon an earlier coauthored article (2001), is an especially important and welcome contribution. It is, as well, a template for conducting social scientific inquiry effectively.

In considering development outcomes in mineral-rich states, the authors make the following argument: It is not mineral wealth that is responsible for the relatively poor economic performance, mediocre social indicators, and authoritarian regimes that are found in many of the mineral-rich states of the developing world, as much of the resource curse literature would have us believe; rather, it is the ownership structure that states choose to manage their mineral wealth. This is the case because different types of ownership structure—that is, the particular mix of state, domestic private, and foreign ownership—give rise to distinct fiscal regimes, and fiscal regimes, insofar as they define and regulate the state's ability to tax and spend to varying degrees, have profound effects on development outcomes. Jones Luong and Weinthal insist, moreover, that had scholars of the resource curse considered a longer time frame, extending their analyses to include both the early years of resource extraction and development from the beginning of the twentieth century, as well as the most recent period since the 1990s, they could not have taken state ownership and control in the mineral sector as a given; rather, they would have found variation across both place and time. Hence, poor outcomes are neither structured nor determined by mineral wealth, but neither are fiscal regimes nor even ownership arrangements.

It is, in its full elaboration, a provocative, multipronged argument. With the corrective lens it provides, we are enjoined to go back to basics and identify, case by case and across time, the particular ownership structure that was adopted, and then follow the pathway of the mechanisms linking ownership structure to taxing and spending arrangements. Process tracing of this sort should clarify development outcomes. With careful attention to and elucidation of the building blocks of their analysis—at the center of which is a rich discussion of ownership structure and how it generates particular transaction costs, societal expectations, and power relations, which in combination foster distinct fiscal regimes—the authors present a model that is both elegant and compelling.

In considering the historical record, Jones Luong and Weinthal identify four possible ownership structures in mineral sectors: state ownership with control (S₁), state ownership without control (S₂), private domestic ownership (P₁), and private foreign ownership (P₂). They claim that all four arrangements can be found in their region of expertise—Central Asia—among the petroleum-rich Soviet successor states since the 1990s. Turkmenistan and Uzbekistan both adopted S₁, the most common form, while Russia adopted P₁, the rarest form; Azerbaijan adopted S₂, and Kazakhstan, P₂. In meticulous detail and drawing upon an array of sources, including surveys, interviews, and presidential speeches, the authors lay out, in a single chapter for each of the four types, the ways in which the preferences of the different claimants to the resource wealth “constrained and enabled” the state in different ways and to varying degrees, thereby promoting different sorts of extraction and spending institutions, which in turn gave rise to different outcomes.

When the discussion turns to ownership structures that include foreign investors (S₂ and P₂), new dimensions are incorporated into the analytical framework, adding complexity but also more variation. For one, the nature of the contractual relationship between foreign companies and the producing country—what the authors refer to as “power relations”—impacts fiscal regimes as well. At the same time, distinct taxation and spending arrangements in the mineral and nonmineral sectors give rise to “hybrid fiscal regimes,” which, by virtue of their hybridity, foster mixed outcomes. Second, the emergence in recent years of new international norms regarding the conduct of economic activities promotes greater protections for foreign investors in host countries, but also new responsibilities toward local social welfare. For Jones Luong and Weinthal, the evidence demonstrates that Azerbaijan exemplifies the best-case scenario under S₂, and Kazakhstan the worst-case scenario under P₂.

The authors' treatment of Russia—the sole case of P₁, not only in the mineral-rich Soviet successor states but also in the entire developing world—is somewhat less compelling. It is, to be sure, a peculiar case. For one, there were different ownership structures for oil and gas. Moreover, in the P₁ environment of the oil sector, close linkages with the state remained, whereas whatever private ownership existed in the gas sector was controlled by the state. Finally, given that both sectors reverted to S₁ by 2005, institutional arrangements under private ownership were hardly very stable. Thus, it may be an exaggeration to speak of a “strong” fiscal regime in Russia from 1999 to 2005 or even to consider the hydrocarbons sector as genuinely belonging in the P₁ category. (The situation is similar with Algeria: While, as noted in Appendix B, it had adopted P₂ in 2005, it reverted back to S₂, or perhaps even S₁, one year later.)

The authors insist that the uniformity—and determinism—that characterize much of the resource curse literature derives from the narrow focus on a single historical period, 1960–90, when state ownership and control of mineral-rich sectors was indeed the most common arrangement, while a perspective that extended from the early 1900s until today would have incorporated greater variation. This point is very well taken, but it is worthwhile to note that according to the authors' Appendix B, which lists all resource-rich countries and changes to ownership structure since 1900, the major change between the second and most recent periods is that between S₁ and S₂. Alas, S₂ arrangements may not have substantially different effects on the domestic political economy—and certainly not outside the mineral sector—from S₁. This is not only suggested by the authors' analysis; it is borne out as well by the experiences of hydrocarbon-rich states of the Middle East and North Africa where, according to Appendix B, S₂ arrangements are the most prominent, but development outcomes in the Gulf states—and specifically in Kuwait (S₁), Saudi Arabia (S₁), Oman (S₂), and Qatar (S₂)—are remarkably similar.

Furthermore, while the emergence of new international norms may indeed have some bearing on fiscal regimes and development outcomes, the diffusion and integration of those norms do not occur at the same rate and with the same intensity across the developing world. To this day, in the oil-rich states of the Gulf and North Africa, demands for corporate social responsibility are relatively weak and the inclusion of “local content” requirements in contracts between the state and foreign oil companies remains in its infancy. Hence, it may be too soon to herald the positive impact of new international norms of business conduct on mineral-rich states.

As I read through this meticulous study with its multiple steps and layers of analysis, I was overcome by a disquieting sense and a gnawing question: first, that an unfortunate effect of the painstaking attention to the variables of analysis is that the bigger picture—indeed, the story—of domestic politics in each country eludes the reader; second, that what seemed, from early on, to be the fundamental question was not being addressed. If ownership structure (and S₁, in particular), rather than mineral wealth, is the perpetrator of negative effects, how do particular ownership structures emerge in the first place? This most crucial question is finally addressed at the very end of the book.

Despite the long wait, the answer provided by Jones Luong and Weinthal is, again, provocative and compelling: The choice of ownership structure for the mineral sector derives from domestic political variables, and specifically, from the interaction between the availability to the state of other nonmineral revenue sources (AR) and the level of conflict faced by state leaders over the distribution of patronage (DC). Weighing these two variables, leaders will choose an ownership structure that allows them maximum sovereignty over the resource without threatening their continued rule. The authors develop a matrix for the choice of ownership structures; they then construct a model to test their hypotheses, and submit it to regression analysis. They are able to show, for example, that the ideal choice—P₁—is so rare because “the domestic conditions that encourage governing elites to adopt this strategy—that is, a high degree of access to alternative revenue and a high level of distributional conflict—have also been rare in mineral rich countries in the developing world” (p. 320).

As persuasive as their argument appears at first glance, it does need to be tested carefully across cases. Indeed, for the oil-rich Gulf states that adopted S₁ (↑ AR, ↓ DC)—Kuwait and Saudi Arabia, for example—it is unclear what alternate source of revenue they had, or that their revenue options have differed markedly from, let us say, Qatar and Libya which, according to Appendix B, have been in the S₂ (↓ AR, ↓ DC) category since the mid-1970s. Moreover, that S₁ loses its dominance to S₂ in the mid-1980s suggests that the relative ability of mineral-rich states to respond effectively to international structural forces (i.e., the plummeting oil prices) prompted many to cede a degree of sovereignty and autonomy to foreign investors so as to relieve the pressures on state coffers. To be sure, Algeria, as well as Indonesia and even Iraq, initiated economic reforms during the bust; Algeria eventually, and cautiously, invited in foreign oil companies.

Another interesting question that derives from this research but remains to be answered is why the majority of states—with S₁ and S₂ ownership structures—adopted S₂ and P₂ structures by the mid-1990s. It may be that as the older fields with the most accessible reserves became exhausted, new sources—deeper, heavier, and more difficult to extract—required technology and expertise that are lacking, or prohibitively expensive domestically; hence, engaging international oil companies became an appropriate choice.

To be sure, Jones Luong and Weinthal have produced an important study that, with an exhaustive research design and mixed methods, both addresses key questions about comparative political processes and gives rise to others. With remarkable clarity—albeit density—of exposition, and careful elucidation of causal relationships, they have presented a model for understanding mineral-rich states that insists on their variety as well as their agency, and demonstrates that history and domestic politics matter.