Comparative Political Economy of Resource Extraction

Abstract

The bulk of the existing literature on the resource curse emphasizes the pervasive and negative outcomes that are typically associated with a country’s abundance of natural resources, such as poor governance, low levels of economic development, civil war, and dictatorship. The worldwide correlation between natural resource wealth and autocratic governance is well-known, and scholars have tried to explain this outcome in a variety of ways. One explanation is rentier state theory, which argues that resource wealth inhibits the growth of civil society because resource (oil) rents allow governments to relieve social pressures through a mix of low taxes and patronage spending. Oil rents thus undermine citizens’ motivation to mobilize, demand representation, or hold political leaders accountable. However, while much of the resource curse literature focuses on the adverse effects of oil wealth, oil makes up only one portion of extractive industries. A growing comparative political economy literature focuses on resource extraction (e.g., precious metals like gold and silver; base metals like copper; and energy resources like coal and uranium) and explains why it leads to conflict among local populations, corporations, and national governments. The extraction of these resources has the opposite effect of oil in that it tends to generate political activity as opposed to political apathy or quiescence. By political activity, we mean the different mobilizations and collective action strategies of challengers near the extractive frontier. While the literature treats this political activity as conflict, it is nonetheless distinct from the resource–civil war debate from the resource curse literature. Case studies and quantitative research support the observation that mineral wealth leads to conflict. The quantitative literature examines the variation of resource (mineral) conflicts cross-nationally and subnationally. Some studies have examined the relationship between mineral wealth and conflict; other studies have explored the relationship between geo-referenced extractive areas and conflict. Mineral extraction is different from oil extraction in terms of the labor intensity of extraction processes, the state ownership of the resource, and the amount of revenue each resource generates. Conflicts over mineral wealth can occur at different stages along the commodity chain: the point of resource access (e.g., when agricultural producers and extractive industries clash over land and water use), the extraction stage itself (e.g., when extractive industries are expanded), the processing and transportation of oil and minerals, and the waste management stage (e.g., the failure of tailing dams or oil pipelines). This comparative political economy literature has also begun to explore the consequences of conflicts, which can result in different political interactions between local communities and corporations, the extension of consultation rights as well as other participatory practices at the grassroots level.