What could be an institutional framework for Liberia’s petroleum sector?

Abstract

Purpose– Reformers in many developing countries with significant hydrocarbon reserves have been drawn to the attention of designing the right policies for their oil sectors. With the right institutional arrangement, benefits from petroleum activities and minimization of transaction costs could be realized. The paper aims to discuss this issue.Design/methodology/approach– This work examines six oil producing countries that have used different methods in managing their hydrocarbon sectors. Their experiences are harnessed to serve as options that Liberia could consider. It therefore uses the Norwegian model of petroleum sector management as lead indicator.Findings– Liberia is a developing economy with limited experience and low institutional capacity with respect to managing her oil sector, and as such, this paper renders the conclusion that Liberia develops her human talents in petroleum activities and should initially have one manager to oversee the petroleum sector until the right institutions are installed and human capacity develops.Originality/value– Using the Norwegian model as the basis for the investigation, the researcher looks at intriguing issues on why this model has worked in some countries and fails to exist in others.