Petroleum, governance and fragility: the micro-politics of petroleum in postconflict states

Abstract

Contemporary political economy research suggests that whether a country falls prey to the resource curse depends on a number of structural and economic factors. The cumulative body of large-N analyses of resource-rich developing countries indicates that the quality of existing institutions is perhaps the key factor that mediates a resource-rich country's economic outcomes. Yet there is a gap in the political economy literature in terms of the subsequent causal reasoning about why institutions play this crucial intervening role in the resource curse. In this chapter, I examine the micropolitics of petroleum in Cambodia and East Timor through a framework rooted in the natural resource value chain to develop a sense of the mechanisms underpinning the resource curse in fragile nations. Postconflict states offer fertile ground for generating hypotheses about the causal interplay between fragile political institutions, limited state capacity, and resource riches as they impact economic outcomes.