Despite the centrality of energy supplies to national security, economic growth, and foreign relations, Brenda Shaffer laments in her book Energy Politics that leading political science journals seldom publish articles on energy, few survey courses in international relations devote much attention to the politics of energy, and only a handful of research and degree programs exist at major universities that focus on the nontechnological aspects of energy (p. 164). Yet she notes that “[d]uring periods of tight energy market conditions, there has generally been an increase in scholarly publications dealing with energy” (p. 18). The three books under review here all represent different aspects of that increased scholarly focus on oil, gas, and other nonfuel minerals following the recent boom in commodity prices.
Energy Politics has the broadest focus of the three. Shaffer's goal is to “provide a comprehensive look at the interaction between energy and politics in the international system, focusing on the dynamics of oil and natural gas” (p. 18). The author generally succeeds in doing so. Her introductory chapter is a great overview of basic energy dynamics that is ideal for those new to the subject matter or wanting to bring themselves up to speed quickly. The book is evenly divided among six thematic chapters and six country or region case studies. A consistent strength of Shaffer's work is that it pays attention to both energy producers and consumers and the links between them. Given the comparative emphasis in much of the “resource curse” literature on oil producers, her focus on the growing importance of natural gas and the role of transit states is especially welcome.
At its most general level, this book maintains that the “state of the world energy market affects broader international relations and vice versa” (p. 28). As a global commodity, oil creates interdependencies in the international system. Each country's demand affects the price that all pay for oil. Similarly, political instability or supply disruptions in any major producer affect consumers around the world. For Shaffer, energy is thus inextricably part and parcel of a state's foreign policy. In her words, “States are no more likely to refrain from using energy to promote their policy goals than to ignore economic or military means of doing so” (p. 1).
Shaffer advances a number of interesting and provocative arguments. She is quite skeptical of oil's alleged role in inter- and intrastate conflicts, but is equally doubtful about the prospects for “peace pipelines” that will improve relations between previously hostile neighbors (Chapter 4). She is also skeptical that the United States and China will become strategic competitors in a new scramble for energy resources, and she identifies many shared interests between them as major energy importers (pp. 85–90). Shaffer emphasizes that supply disruptions to oil and gas are few and far between (pp. 33–40) and notes that the United States has denied market access to producers far more often than producers have attempted to deny supplies to the United States (p. 138). She also sees the future prospects for a viable natural gas cartel as being quite remote (pp. 153–54). Her book benefits from a generally rational, calm, and nonalarmist presentation throughout. Reflecting the author's long-standing research interests, it is particularly strong on the Caspian region and former Soviet countries. Outside of a few pages on the Chad-Cameroon pipeline project, though, the book entirely neglects the important Gulf of Guinea region stretching from Ghana to Angola.
Oil, Dollars, Debt, and Crises advances the more specific thesis that oil and financial crises are conjoined together in a “super cycle” that “is endogenous and self-perpetuating” (p. 1). In this regard, Mahmoud El-Gamal and Amy Myers Jaffe maintain that “energy policy, the regulation of financial markets and institutions, and international relations as they pertain to Middle East geopolitics are so closely intertwined that it makes little sense to contemplate any of the three without contemplating the other two simultaneously” (p. 191). In their view, we have already seen two such super cycles from 1973 to 1980 and 2001 to 2008, and the authors predict that we will likely see a third such cycle in the future due to the combination of continued dependence on hydrocarbon fuels, persistent and growing political instability in the Middle East, and increasingly integrated global financial markets that amplify the dynamics of the other cycles (Chapter 7). To navigate through this complex world of intertwined phenomena, El-Gamal and Jaffe entertainingly note that “understanding dynamics of the current oil-price bubble, and the corresponding financial dynamics of the U.S. dollar, requires understanding how a hedge fund manager may sustain an oil bubble through beliefs about continued Chinese growth” (p. 111).
As with Shaffer's book, the focus here is on oil and natural gas, with significant attention appropriately devoted to the latter commodity. Regionally, the almost exclusive focus on the Middle East compliments Shaffer's focus on the Caspian Sea but replicates her neglect of sub-Saharan Africa. In contrast to many volumes that just focus on the supply and demand dynamics of the oil price cycle, the single greatest strength of El-Gamal and Jaffe's book is its delineation of the multifaceted links between the oil price cycle and the increasing globalization of finance in the post–gold standard dollar-denominated era of the past four decades.
There are, however, two fundamental problems with Oil, Dollars, Debt, and Crises. First, while the authors are rightly skeptical of “peak oil” arguments and “this time is different” logic (pp. 111–15 and 145–47), they uncritically accept the existence of the resource curse as if this was a proven fact and not a matter of intense scholarly debate. In sharp contrast to the authors' contention that there is a “globalized curse of black gold” (p. 75), almost every dimension of the various resource curse arguments put forward in recent years has been seriously challenged or at least increasingly qualified by subsequent scholarship. One struggles in vain to find a single reference to such economists as Christa Brunnschweiler and Erwin Bulte, Graham Davis and John Tilton, or Jean-Philippe Stijns, who have launched strong empirically based critiques against the whole idea of a resource curse, or to political scientists like Ben Smith and Thad Dunning (discussed in the following), who have elaborated highly nuanced arguments that also call into question the existence of any kind of globalized resource curse.
Second, this is in places a deeply pessimistic and almost alarmist book. At times it reads like a Foreign Affairs or Foreign Policy article highlighting lots of dangerous scenarios that may come into play at some point in the future. Many of their scenarios are credible or probable, and worthy of high-level policy attention. Yet the authors highlight any number of potential future scenarios for energy supply disruptions, even though “no such prolonged cutoff of oil has actually ensued” (p. 160). Similarly, while the political instability, security, and terrorism scenarios outlined in great detail signify that geopolitical risks “are approaching cataclysmic proportions in the current era of globalization” (p. 174), the authors never consider the possibility that there could be a lasting Israeli-Palestinian settlement or that the reform movement in Iran could ultimately succeed. The idea that “the resource curse of the Middle East has been globalized” (p. 52) will strike many observers of the coming oil booms in Brazil and Ghana as ludicrous.
El-Gamal and Jaffe's pessimism is especially noteworthy given that they readily identify a number of simple and obvious solutions, such as ending fuel subsidies in the developing world and increasing gasoline taxes in the United States, that would do much to lower oil consumption. The authors also advocate a number of innovative proposals, including minor changes that would close financial market loopholes (p. 184) and countercyclical investments in oil and gas production by sovereign wealth funds (pp. 186–87) that would help moderate the next super cycle they fear.
Such critiques bring us nicely to Dunning's Crude Democracy. The “crude democracy” of the title is the counterintuitive idea that democracy can be “fostered, supported, or sustained by oil wealth” (p. 1). More specifically, Dunning's central thesis is that “natural resource wealth can have both authoritarian and democratic effects: resources have a conditional impact on the political regime” (p. 107). In his argument, “resource rents can promote authoritarianism or democracy, but they do so through different mechanisms” (p. 4).
One of these mechanisms—the fact that the control of lucrative resource rents increases elite incentives to either launch coups against an existing democracy or resist pressures to democratize an existing repressive regime—has been extensively highlighted in previous empirical work by such scholars as Michael Ross and Nathan Jensen and Leonard Wantchekon. As this ground has been well covered, Dunning devotes most of his attention to the elucidation of a second mechanism through which natural resource wealth can both reduce the costs of democratization to elites and minimize their incentives to launch coups against an existing democracy. This indirect mechanism is that the existence of easily appropriated resource rents typically leads to less taxation in other areas of the economy. Thus, a resource boom can “mitigate the redistribution of private income through taxation and thereby increase the attractiveness (or reduce the disutility) of democracy” (p. 11).
It is important to note that Dunning's work does not directly challenge or overturn previous empirical findings linking oil or mineral wealth to authoritarian regimes (pp. 108–9, 141–42). Instead, the author argues that both of these mechanisms, one promoting authoritarianism and the other promoting democracy, are at work simultaneously in countries that are richly endowed with natural resources (in contrast to the preceding two books, Dunning goes beyond oil and gas and considers additional forms of mineral wealth, such as copper and kimberlite diamonds, that also generate significant rent streams).
There are essentially two factors or variables that explain which of these mechanisms will prevail. First, what ultimately matters for Dunning is not resource wealth or abundance but, rather, the level of resource dependency (pp. 19–21, 86–87). Countries that are heavily dependent on natural resource exports and those where there is not much of a viable economy outside of resource extraction are likely to have much stronger incentives for authoritarianism because control of the resource rents is the only game in town. Conversely, high levels of private-income inequality strengthen the democratic effects of resource wealth because elites have more to fear from current or future redistributive taxes and, hence, will greatly value the tax-reducing properties of resource wealth (pp. 21–22, 124–25). Putting these two factors together, Dunning concludes that “the democratic effect tends to obtain under two conditions: when the private (non-resource) economy is more inegalitarian, and thus elites … are most concerned with redistributive pressures; and when the economy is less resource-dependent (i.e., when rents comprise a smaller part of overall economic product)” (p. 101). Such conditions are more likely to be found in Latin America than in the Persian Gulf or sub-Saharan Africa, but they can potentially obtain anywhere.
In two important ways, Crude Democracy is reminiscent of Ben Smith's outstanding book Hard Times in the Lands of Plenty: Oil Politics in Iran and Indonesia (reviewed in Perspectives on Politics 6 [September 2008]: 631–33). First, like Smith's work, this book is a methodological tour de force that employs a variety of quantitative and qualitative methods to great effect. In Dunning's case, the argument is built, supported, and justified through formal modeling, cross-national quantitative evidence, a primary case study based on fieldwork in Venezuela, and secondary case studies based on fieldwork in Chile, Bolivia, Ecuador, and Botswana. An additional methodological strength is that Dunning is cautious with the claims advanced throughout the book, is sensitive to potential problems with his data, acknowledges certain developments that his framework does not elucidate well, and highlights cases that might challenge his theory or provide interesting future tests of it.
Second, again like Smith's work, this book is an enormous leap beyond previous work either promoting or rejecting resource curse arguments on the basis of large-n empirical studies. Dunning moves us far beyond “yes, there is a resource curse” or “no, there is not a resource curse” arguments and instead delves deeply into the far more interesting territory of the diverse and varied results that different countries have achieved in trying to manage their natural resource endowments. Dunning is certainly correct that “there is substantially more variation to be explained than previous analyses have suggested” (p. 279), and he resoundingly succeeds in his attempt to develop “a general theory that helps to explain variation in outcomes across resource-rich states” (p. 291). One can only hope that other scholars and policymakers are paying close attention.
