Public choice theory and petroleum policies in Canada, Britain and Norway

Abstract

Abstract. It is assumed that the development of an economically promising resource such as petroleum would be amenable to analysis from an economic viewpoint, and that government initiatives in this area might reveal the essential economic interests of the state. If governments are assumed to have similar economic and political objectives (i.e., to attain the greatest revenues possible from the exploitation of a depleting natural resource and to maintain public office), then it is to be expected that the petroleum policy outputs in various states would likewise be similar. Such differences as do exist should be amenable to explanation by examining the differences in the political constraints and economic situations of the states in question. The study models petroleum policy in four areas: state participation, pricing, depletion (including exploration and production policies), and fiscal arrangements, based on assumptions central to public choice theory. A comparison of policy outputs in the three case states illustrates the usefulness of the public choice approach to comparative policy analysis.