Reaping Rewards, or Missing out? How Neoliberal Governance and State Growth Machines Condition the Impacts of Oil and Gas Development on Local Well‐Being

Abstract

For decades, the governance regimes of the United States and many other nations have increasingly devolved authority from central federal governments to substantially weaker state and local governments and even private industry. This trend produces uneven results for affected spaces and modes of governance. At the same time, industries have been re‐regulated under neoliberalization to maximize corporate profitability. Conterminous to the trend of neoliberal deregulation is the global energy transition. The U.S. energy system has shifted away from coal toward natural gas and has become the world’s top producer of hydrocarbons due to the widespread deployment of drilling techniques that allow access to unconventional resources. We evaluate the ways that neoliberal governance structures can create uneven socio‐economic impacts from oil and gas development across U.S. states using a multi‐level modeling framework with random slopes and cross‐level interactions. We utilize a multi‐level state and county data set that covers 2000–2016 to examine different outcomes across scales and places. We find evidence that state political economies—reflected in the ideological composition of state legislatures as well as the political spending of the energy sector—condition the effects of oil and gas development on well‐being. These findings are discussed in reference to theories of neoliberalism, growth machine politics, energy boomtowns, and natural resource‐dependent communities.