Contentious nationalization and the embrace of the developmental ideals: Resource nationalism in the 1970s in Ecuador

Abstract

Established scholarship on the governance of natural resources focuses on either material or ideational motivations in explaining states’ nationalist policies. Based on the case of Ecuador’s oil industry in the 1970s, this article shows how material and ideational drivers are often intertwined. In this article, I analyze the 1970s resource nationalist policies advanced in Ecuador. This article argues that increased rent capture was possible in the 1970s as the Ecuadorian state improved its bargaining position vis-á-vis foreign companies, whose investments had been sunk from previous decades of explorations. But also, this nationalist position was articulated with a broader political notion of development and national identity as an oil producer. Despite these motivations, the various legal reforms that increased state control over the industry in the 1970s were always partial and contentious. The article also highlights how these nationalist policies found in the emerging views of the New International Economic Order (NIEO) and the movement of Third World nations a source of inspiration. This explanation of the 1970s Ecuadorian oil history offers a holistic analysis of both the ideational and the material motivations for the military regime’s resource nationalism and explains the complexities of exercising control for a small oil producer.