The Paradox of Plenty: Oil Booms and Petro-States (Studies in International Political Economy) [Hardcover]

Terry Lynn Karl (Author)

Book Description

Publication Date: October 10, 1997 | Series: Studies in International Political Economy

The Paradox of Plenty explains why, in the midst of two massive oil booms in the 1970s, oil-exporting governments as different as Venezuela, Iran, Nigeria, Algeria, and Indonesia chose common development paths and suffered similarly disappointing outcomes. Meticulously documented and theoretically innovative, this book illuminates the manifold factors--economic, political, and social--that determine the nature of the oil state, from the coherence of public bureaucracies, to the degree of centralization, to patterns of policy-making.
Karl contends that oil countries, while seemingly disparate, are characterized by similar social classes and patterns of collective action. In these countries, dependence on petroleum leads to disproportionate fiscal reliance on petrodollars and public spending, at the expense of statecraft. Oil booms, which create the illusion of prosperity and development, actually destabilize regimes by reinforcing oil-based interests and further weakening state capacity.
Karl's incisive investigation unites structural and choice-based approaches by illuminating how decisions of policymakers are embedded in institutions interacting with domestic and international markets. This approach--which Karl dubs "structured contingency"--uses a state's leading sector as the starting point for identifying a range of decision-making choices, and ends by examining the dynamics of the state itself.

Editorial Reviews

Review

"After benefiting from the largest transfer of wealth ever to occur without war, why have most oil-exporting developing countries suffered from economic deterioration and political decay? [Karl's] complex argument offers a sophisticated cross-cultural reply to this question, focusing on the capital-deficit countries of Algeria, Indonesia, Iran, Nigeria, and Venezuela. Though a Latin American specialist, Karl understands the Algerian and Iranian encounters with oil and has insights to offer all those who study Middle Eastern oil states - as well as those that lead them." -- Middle East Quarterly, Issue 12/98

"Brings new theoretical and methodological insights...merits the close attention of students of rentier states...As a bonus, Karl contributes to the literature on the structure-agency problem, arguing for what she calls 'structured contingency' or the highly biased preference of certain types of decisions. The Paradox of Plenty, in any respect, deserved to be placed at the top of our reading lists and should become a staple in courses on political and economic development." -- David Waldner, University of Virginia, quoted in MESA Bulletin, n. 32, 1998

"Karl clearly understands and explains . . . that a period of . . . high prices [is[ . . . as damaging as a period of . . . low ones." -- Modern African Studies

"Karl understands the Algerial and Iranian encounters with oil and has insights [for] . . . those who study Middle Eastern oil states." -- Middle East Quarterly

"The implications Karl draws from this [story]are provocative...In what is perhaps the most important contribution a book can make, Karl provides a number of interesting propositions and hypotheses that can be empirically tested. If done correctly, such an exercise could go a long way toward specifying in exacting terms the extent to which politicians' actions are constrained... Her observations regarding democracy are important... Karl articulates a very clear set of hypotheses that lend themselves to serious empirical examination over a broad set of cases. Until we are able to specify more clearly the interaction between structure and agency, concepts will remain too slippery, arguments will remain unfalsifiable, and practical answers, which are so badly needed, will remain out of reach. Terry Lynn Karl's book, The Paradox of Plenty: Oil Booms and Petro-States, pushes the debate in the right direction." -- David Brown, Rice University, quoted in Comparative Political Studies, April, 1998

"This . . . book promises to redefine the debate on the rentier state and to draw . . . attention [to] . . . comparative politics." -- Middle East Journal

"This is a stimulating and thought provoking book." -- Latin American Studies

"Thorough, knowledgeable and convincing...worth reading." -- George Philip, London School of Economics, quoted in Modern African Studies, 36:2, 1998

"[This book] . . . deserves to be placed at the top of our reading lists." -- MESA Bulletin

About the Author

Terry Lynn Karl is Associate Professor of Political Science and Director of the Center for Latin American Studies at Stanford University.

Product Details

• Hardcover: 380 pages
• Publisher: University of California Press (October 10, 1997)
• Language: English
• ISBN-10: 0520071689
• ISBN-13: 978-0520071681
• Product Dimensions: 9.2 x 6.2 x 1.2 inches
• Shipping Weight: 1.6 pounds
• Average Customer Review: 4.0 out of 5 stars  See all reviews (8 customer reviews)
• Amazon Best Sellers Rank: #5,232,918 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

3.0 out of 5 stars Great points - but somewhat academic, July 1, 2002

By 

Bob G. - author, investor, entrepreneur "Bob G." (Cincinnati, OH USA) - See all my reviews

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This review is from: The Paradox of Plenty: Oil Booms and Petro-States (Studies in International Political Economy) (Paperback)

This book provides an iron-clad explanation for the failure of oil exporters - especially developing nations - to use their raw material blessings as a lever for improvement. The author provides outstanding comparisons among oil exporters, along with amazing parallels to the Spanish empire. There's an important point here about how human nature and government limitations often doom these "blessed" countries to failure. Call it the King Midas effect...

On the downside, her point is clearly made in the first 50 pages. In the remainder of the book the author goes into too much detail regarding the political evolution of Venezuela. And she fails to end with a reader-friendly synopsis or a glimpse of the future.

With today's troubles in the Mideast, this book could have been a lay-reader best seller. Unfortunately the author's writing is aimed more toward Political Science professors than the general public. Still worth the purchase, however.

7 of 8 people found the following review helpful:

4.0 out of 5 stars very good book about what oil does to a country, April 25, 2000

By 

"anl5" - See all my reviews

This review is from: The Paradox of Plenty: Oil Booms and Petro-States (Studies in International Political Economy) (Paperback)

Basically, this book is a very strong and appealing summary of the consequences of over-reliance on oil production for developing countries. Not only results, but also underlying causes are considered: most attention is given to institutional and political aspects of what Lynn calls "petrolization" of the state. He argues that petroleum is the only product, which creates strong long-lasting ties among politicians and institutions involving them into constant seeking of oil revenues (for their own as well as for state benefit). Future decisions in this environment are determined by actions taken in the past, which makes it very hard to break away from this circle. The case of Venezuela is especially well considered; much of the information is taken from Lynn's conversations with Venezuelans top governmental officials and, hence, is of a great value. Carefully chosen data are well presented on a passionate manner which conveys the dramatic nature of changes brought by petroleum in this country.

The future of new oil-producers becomes less shinning as we look at the data provided by the author. Only Norway, who managed to overcome most of the negative aftermaths of its oil windfalls, deemed as a winner within the group of oil producers. Lynn ascribes this success to a well-prepared and robust bureaucracy and stable democracy existing in Norway.

The only problem I see in this book is its superficial treatment of economic factors related to "petrolization" of the state. In this context, Oil Windfalls: Blessing or Curse? by Alan Gelb and Associates (1988) or Sustainable Development In Mineral Economies by R. Auty and Mikesell (1998) or would be a great supplement.

2 of 2 people found the following review helpful:

4.0 out of 5 stars Interesting contribution to theory, March 11, 2003

By 

Denis Benchimol Minev "Amazonia" (Manaus, Amazonas, Brazil) - See all my reviews
(VINE VOICE)   

This review is from: The Paradox of Plenty: Oil Booms and Petro-States (Studies in International Political Economy) (Paperback)

This book is a good contribution to the scholarship of one-good exporters, such as oil for many Middle Eastern countries and Venezuela. The author focuses on Venezuela, with occasional reference to other countries.

The main thesis is that aside from the traditional Dutch disease of such intense exporters, there is an organizational component in the downfall of such plenty. For example, she argues that a large self-serving infrastructure and bureaucracy is built around the "pot of gold". She argues this may be one of the main causes that coutnries squander such valuable resources without ever refocusing them on the development of people (health and education) or the country's economy (such as through the extension of value-added activities).

Overall, an interesting proposition, though I am not sure this is a phenomenon unique to countries faced with the plenty of oil or other products. It is a strong case that inefficiencies are added through bureaucracies, but I still believe much of the damage is caused by the traditional Dutch disease.