When It Is Not "Business as Usual": Petro-States and International Conflict

https://www.youtube.com/watch?v=35xuWit-BnU

"When It Is Not 'Business as Usual': Petro-States and International Conflict"

Anita Kellogg

University of California Los Angeles

Abstract:

While there is increasing recognition that petro-states are more aggressive than their counter-parts in using military force to resolve interstate disputes, it remains unclear why economic dependence on oil revenue leads to such belligerence. I argue that to unravel this puzzle one must integrate insights from the resource curse and commercial peace literatures. The unique political economy of petro-states is explained by the Dutch disease phenomena: a strong demand for oil results in an overvalued currency and deindustrialization by reducing the competitiveness of domestic manufactured and agricultural goods. These effects are enhanced by nationalization of the petroleum industry, making the state the primary client for the service sector. Consequently, oil dependence results in a smaller and less influential private sector. This corresponds with the causal mechanism of the commercial peace, which asserts that the power of business interests incentivizes governments to avoid militarized conflict with economically interdependent states. Petro-states, however, are less constrained by these commercial elites. Therefore, the pacific effects of economic interdependence are absent in bilateral relationships that include a petro-state. Regression analyses confirm this thesis with respect to both militarized disputes with fatalities and on the overall severity level of interstate conflicts. The relationship between commercial elites and security policymaking is further illustrated through a case study of Venezuela’s public-private sector relations and their impact on the Venezuela - Colombia rivalry. By integrating the domestic and international bargaining process, these results explain the link between oil dependence and the threat to interstate peace.

Discussants:

Andrew Enterline, University of North Texas

Melda Ozsut, University of North Texas

Curtis Bell, One Earth Future Foundation

Gabriele Spilker, University of Salzburg

OPSC Co-ordinator:

Emily Ritter, University of California Merced

Graduate Assistant:

Peter D. Carey II (University of California Merced)