Lifting the Curse: Distribution and Power in Petro-States

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Lifting the Curse: Distribution and Power in Petro-States LIFTING THE CURSE: DISTRIBUTION AND POWER IN PETRO-STATES DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Ryan Kennedy, M.A. ***** The Ohio State University 2008 Dissertation Committee: Approved by Professor Marcus Kurtz, Adviser Professor Timothy Frye ______________________________ Professor Janet Box-Steffensmeier Adviser Political Science Graduate Program Professor Richard Gunther Copyright by Ryan Kennedy 1998 ABSTRACT While the empirical correlation between fuel exports and authoritarianism has become conventional wisdom, influencing academics and policy-makers, the answer for why fuel exporters tend to be more authoritarian has remained elusive. This study proposes a model based on the increased importance of government decision-making in determining the distribution of economic goods in societies that are dependent on fuel exports. These increases in government distribution, as a result of fuel development revenues primarily accruing to the state, take on three forms: direct payments and subsidization, government ownership of industry, and a more arbitrary enforcement of property rights. Countries are affected differently, dependent upon both their level of dependence and the size of revenues garnered from fuel exports. In countries with high per-capita fuel export income, fuel revenues are stabilizing for authoritarian regimes, as they provide the resources for maintaining support. In countries which are heavily dependent on fuel exports in the economy, but with a relatively low per-capita income from those exports, the increased importance of distribution in the economy results in greater instability in democratic regimes, as it increases the temptation for both government and opposition parties to lock in their share of relatively scarce resources through exclusionary politics. ii Utilizing a dataset covering 166 countries from 1965 to 2001, I demonstrate that there is a general correlation between fuel export dependence and the importance of government distribution. I also find that income from fuel exports is generally stabilizing, especially for authoritarian regimes, while fuel dependence is destabilizing, especially for democracies. In addition, the same patterns of accumulation that fuel government distribution and resource competition, also promote incentives towards under-provision of public goods. This study demonstrates that fuel exporting states tend to have worse socio-economic performance than would be expected from their level of income. Finally, this study uses an in-depth case comparison of politics in Kazakhstan, Kyrgyzstan and Moldova to demonstrate the causal mechanisms, and to test the dynamics of the model. Based on these findings, policy recommendations are made for methods of distribution that produce incentives more consistent with democratic governance. iii Dedicated to my wife, Allison iv ACKNOWLEDGMENTS I am greatly indebted to a number of people for their help on this project. First, I wish to thank my dissertation committee. I am grateful my advisor, Marcus Kurtz, who has consistently pushed me on the development of my theory, has provided many insights that have been key to the project’s development, and played a critical role developing a cohesive thesis. Thanks are also in order to Timothy Frye, who first suggested that I explore the issue of oil exports and democracy, has always pushed me to develop a cohesive theory, and guided me through the frustrations associated with organizing my fieldwork. Janet Box-Steffensmeier saved me from a number of conundrums with the empirics of this project. Her direction and recommendations have not only helped this project, but also furthered my understanding of methodology immensely. Finally, Richard Gunther was largely responsible for placing this study into the larger context of the democratization literature and suggested a number of improvements that have made the chapters much clearer. My fieldwork in Kazakhstan and Moldova would not have been possible without several grants. For Kazakhstan these included the AGGRS grant from Ohio State’s graduate school, the Office of International Affair’s dissertation travel grant, and Ohio State’s distinguished university fellowship. For Moldova, I am extremely grateful to the Fulbright foundation and their associated staff. v A number of people helped me out greatly with my fieldwork. Ustina Marcus, Donnacha O’Beachain, and a number of other members of the faculty and staff at the Kazakhstan Institute for Management, Economics and Strategic Research (KIMEP) helped me out immensely with finding resources and lining up interviews in Kazakhstan. Dinissa Duvanova helped with housing and background so I could hit the ground running. I also need to thank Robert Fahs for letting me have his couch when I unexpectedly needed a place to stay. In Moldova, Irina Nicorich, Vlad Cojuhari, Ludmila Bilevschi, Irina Colin, Ruxanda Negru, Chris Grant, Malise Tepera, and Patricia Fogerty deserve special recognition for all their help. Also, I would like to thank the staff of the Moldova Resource Center for Human Rights (CReDO) and the Moldova State Institute for International Relations (IRIM). Our second family in Moldova, the Cantirs, provided some key help, in terms of contacts, resources and sanity. I am also very grateful to a number of people who have read previous drafts of this, and related projects, for their input. Among others, these included Christina Xydias, Leanne Powner, Ben Ansell, Michael Cohen, and Johannes Urpelainen. More generally, my parents deserve recognition for all their support and patience through my ten years of higher education and trips abroad. They may not have always understood why I was doing what I was doing, but they were always supportive while I did it. vi Finally, I must thank my wife, who put up with my fieldwork in Kazakhstan while we planned our wedding, and re-located with me to Moldova, Ohio and Texas. My sanity would not have survived this process without her. vii VITA May 1, 1979.............................................Born – Kansas City, Missouri, USA 2001.........................................................B.A. political science and Russian, Truman State University 2004.........................................................M.A. political science, The Ohio Sate University 2001-2005...............................................Graduate Teaching and Research Associate, The Ohio State University 2005........................................................Special guest researcher Kazakhstan Institute for Management, Economics and Strategic Planning 2006-2007...............................................Fulbright research fellow, Moldova 2007.........................................................SBS summer survey fellow 2007-2008................................................Lecturer, The Ohio State University PUBLICATIONS Research Publications 1. Kennedy, R. (2007). Fragments of economic accountability and trade policy. Foreign Policy Analysis, 3(2), 145-169. 2. Kennedy, R. (2006). A colorless election: The 2005 presidential elections in Kazakhstan and what it means for the future of the opposition. Problems in Post- Communism, 53, 46-58. 3. Ishiyama, J.T., & Kennedy, R. (2001). Mixed electoral systems, super presidentialism, candidate recruitment and political party development in Russia, Ukraine, Armenia and Kyrgyzstan. Europe-Asia Studies, 53(8), 1177-1191. viii 4. Kennedy, R., & Ishiyama, J.T. (2001). Writing rights: Factors influencing the strength of rights clauses in post-Communist countries. The Journal of Political Science, 29, 1-29. Analysis Publications 1. Kennedy, R. (2008, 2 April). Moldova: Chisinau-Gagauzia tensions remain strained. Oxford Analytica. 2. Kennedy, R. (2008, 15 January). Moldova: Old challenges represent themselves in 2008. Oxford Analytica. 3. Kennedy, R. (2007, 24 December). Moldova: Christmas row a sign of deeper tensions. Oxford Analytica. 4. Kennedy, R. (2007, 21 November). Moldova: HIV/AIDS is at point of becoming a pandemic. Oxford Analytica. 5. Kennedy, R. (2007, 8 August). Moldova: Contrary forces favour policy short- termism. Oxford Analytica. 6. Kennedy, R. (2007, 18 July). Moldova: Press freedoms remain problematic. Oxford Analytica. 7. Kennedy, R. (2007, 28 June). Moldova: Local elections show national trends. RFE/RL Belarus, Ukraine, and Moldova Report, 9(15). 8. Kennedy, R. (2007, 25 June). Moldova: Communists lose ground in local elections. Oxford Analytica. 9. Kennedy, R. (2007, 14 May). Moldova: Voronin pins hopes on encouraging investment. Oxford Analytica. 10. Kennedy, R. (2007, 3 May). Talk of Transdniestr agreement sparks speculation. RFE/RL Belarus, Ukraine and Moldova Report, 9(11). (also produced for online and radio presentation) 11. Kennedy, R. (2007, 27 April). Moldova/Russia: Reported Transnistria deal is unlikely. Oxford Analytica. 12. Kennedy, R. (2007, 5 April). Counting losses as Russian wine ban lingers. RFE/RL Belarus, Ukraine and Moldova Report, 9(10). 13. Kennedy, R. (2007, 30 March). Moldova/Romania: Visa row may result in looser ties. Oxford Analytica. ix 14. Kennedy, R. (2007, 22 March). What's behind harsh criticism of Romania. RFE/RL Belarus, Ukraine and Moldova Report, 9(1). 15. Kennedy, R. (2007, 5 March). Moldova: Government action hinders media freedom. Oxford Analytica. 16. Kennedy, R. (2007, 22 February). Moldova's broadcast privatization -- reform or censorship? RFE/RL Belarus,
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