Three Eras of the Oil Industry in Venezuela and Ecuador by A
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Stringent, open and hybrid state treatment of foreign investment: three eras of the oil industry in Venezuela and Ecuador by Antulio Rosales Nieves A thesis presented to the University of Waterloo in fulfillment of the thesis requirement for the degree of Doctor of Philosophy in Global Governance Waterloo, Ontario, Canada, 2017 © Antulio Rosales Nieves 2017 Examining Committee Membership The following served on the Examining Committee for this thesis. The decision of the Examining Committee is by majority vote. External Examiner Paul Alexander Haslam Associate Professor, University of Ottawa Supervisor(s) Eric Helleiner Professor, University of Waterloo Internal-external Member Bruce Muirhead Professor, University of Waterloo Other Member(s) Kathryn Hochstetler Professor, London School of Economics Alex Latta Associate Professor, Wilfrid Laurier University ii Author’s Declaration I hereby declare that I am the sole author of this thesis. This is a true copy of the thesis, including any required final revisions, as accepted by my examiners. I understand that my thesis may be made electronically available to the public. iii Abstract This thesis explains the development of three distinctive forms of engagement between the Venezuelan and Ecuadorian states and foreign investment since the 1970s until 2014 in their oil sectors. State treatment of foreign investment ranged from stringent in the 1970s, to open in the decades of the 1980s and 1990s, to a hybrid model in the 2000s. The broad changes that occurred in the three periods responded to factors conceptualized herein as the conditions of state- company bargaining, and the role of dominant and contested ideas. This study is accomplished through a detailed historical analysis and in-depth case studies. The dissertation incorporates and modifies insights from longstanding traditions in political science that deal with the politics of bargaining between states and transnational corporations: the Obsolescing Bargaining Models (OBM). It highlights the strategic view of states in their treatment of foreign investment through time, emphasizing states’ agency, by combining insights from the politics of bargaining, while also integrating ideational motivations, based on constructivist scholarship, in the shifts of state treatment of foreign investment historically. This perspective allows a shift in gaze from the apparent novelty of new left governments to comprehending longer-term linkages, ruptures and continuities. iv Acknowledgements In the year 2002, at Trent University, I attended a meeting to learn about the option of doing a double major in International Political Economy. The professor in charge of the talk was Eric Helleiner. Eric’s passion for IPE and his contagious enthusiasm remain as strong today as they were then. During that talk, Eric convinced many of us to work in IPE. Soon after, he became an important influence in my intellectual life. He has supported my work constantly since I was an undergraduate student. I will always be thankful to his dedication, affection and impeccable academic guidance. Eric will always be the greatest of mentors. After I asked Kathryn Hochstetler to join my committee, I started to drop by her office more and more often; she dedicated plenty of time to answer all my questions and concerns. Kathy has been patient, thorough and supportive. I will always be indebted to her honesty, sharp intellect and encouragement. Alex Latta has been the critical voice I needed in the process of writing this thesis and one that I wish to have near me for the rest of my career. I benefitted greatly from his meticulous feedback and constant support. I would like to thank my external examiners Paul A. Haslam and Bruce Muirhead for their detailed reading and encouraging comments. There are other scholars to whom I owe much of my curiosity and my academic commitment, they have mentored me at various stages and I will always cherish their influence. My thanks and admiration to Andreas Pickel, Edgardo Lander, Rubén Alayón Monserrat, Patricia Goff, Hongying Wang and Rhoda Howard-Haussmann. Arriving in Waterloo in 2012 was not an easy task. I am indebted those who smoothed the arrival and stay for me and my family. Adam, Nayantara and Nirvan Malloy welcomed us like family. Later, we saw the arrival of Shantipriya to the world. Thanks for all the laughter and company. I thank my colleagues in the Global Governance program for their comradeship and our collective commitment to each other’s wellbeing. Thanks Aria Ilyad Ahmad, Carla Angulo-Pasel, Marisa Beck, Charis Enns and Frances Fortune. Thanks also to Brock Bersaglio for being part of very crucial sessions of knowledge sharing and coaching. Many more colleagues at the school have been a source of support, especially Tracey Wagner-Rizvi and Crystal Ennis. I am so grateful to have found Rhys Machold and Sarah Martin at the BSIA, thanks for your amazing friendship. Field-work in Venezuela was possible in part thanks to the love of our friends José Gregorio Monsalve, Natalia Aldana and Joana Ribeiro who, together with our families, helped somewhat cure our reverse homesickness. I am indebted to Miriam Requena and the staff at the Juan Pablo Pérez Alfonzo library of Venezuela’s Ministry of Oil and Mines for their help in the research process. Thanks to Alejandra Cabrera for her friendship and support finding key interviewees. I am indebted also to Rodrigo Llavaneras Blanco for his great help and for allowing me to be an older brother. Thanks to Alma Blanco for her courageousness and fearless love to life. In Ecuador, field-work was in a large degree possible thanks to an amazing family that adopted me without reservations. María Elena Vega, Franscico Rubio, Blanquita and Conchita will remain my Ecuadorian family. Thanks to Verónica Sepehr for lending me your loved ones. Thanks to Laura Rodríguez and Johannes Waldmüller for being in Quito at the right time. At the University of Waterloo and the BSIA, April Wettig, Trish van Berkel, Joanne Weston and v Tiffany Bradley deserve special thanks for making things easier in the day-to-day. Thanks to Jane Forgay and Jennifer Spencer for their research support in the University of Waterloo and CIGI libraries. Parts of this thesis have already been published in the form of journal articles in the Canadian Journal of Development Studies and The Extractive Industries and Society, I thank these journals’ editors and anonymous reviewers for their comments. I thank my aunts Celina, Valentina and Palmira for inspiring me to be critical and to love knowledge, and to my uncle Eligio for teaching me how to climb mountains. The sets of skills I learned with you all have been extremely useful. I will always be grateful to my aunt Dilia, padrino Nelson and madrina María for their enduring efforts to help me fulfill my goals since I was just a child. Thanks to my dad for his trust and for passing on an awesome sense of humor. My mom taught me the value of perseverance, of hard work and what it means to be consecuente, I cannot thank her enough. I thank my sister for teaching me to trust myself and to not be afraid of the waves in the ocean, to defy the odds, and to face the monsters that kept me awake at night. Thanks to my beloved Lea for lightening the world from afar. Masaya has been the greatest source of strength and life in the past fifteen years. I thank you for challenging me and for letting me surprise you. I am so happy that you let me question a few assumptions since a dinner we had back in 2001. Thanks for making this journey with me. This thesis would not have been completed without the work you have also invested. It is the result of loud, persistent, strong acts of care and love, and I dedicate it to you. Thanks Vera Manuela and Ela Lucía, you will always be the most important reason to be proud. Keep questioning and endorse happiness, your dad will stand by you. vi Table of contents Examining Committee Membership ................................................................................................... ii Author’s Declaration ........................................................................................................................... iii Abstract .................................................................................................................................................... iv Acknowledgements ................................................................................................................................. v Table of contents .................................................................................................................................. vii List of Figures .......................................................................................................................................... x List of Tables .......................................................................................................................................... xi List of Abbreviations ........................................................................................................................... xii Chapter 1 .................................................................................................................................................. 1 The political economy of state-foreign companies’ relations from an historical perspective: ....................................................................................................................................................................