From Deseret News archives:

Price of oil linked to pace of freedom

Published: Saturday, July 8, 2006 4:08 p.m. MDT
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The second mechanism, argues Ross, is the "spending effect." Oil wealth leads to greater patronage spending, which in turn dampens pressures for democratization. The third mechanism he cites is the "group formation effect." When oil revenues provide an authoritarian state with a cash windfall, the government can use its newfound wealth to prevent independent social groups — precisely those most inclined to demand political rights — from forming. In addition, he argues, an overabundance of oil revenues can create a "repression effect," because it allows governments to spend excessively on police, internal security and intelligence forces that can be used to choke democratic movements.

Finally, Ross sees a "modernization effect" at work. A massive influx of oil wealth can diminish social pressures for occupational specialization, urbanization and the securing of higher levels of education — trends that normally accompany broad economic development and that also produce a public that is more articulate, better able to organize, bargain and communicate, and endowed with economic power centers of its own.

What I am arguing in positing the First Law of Petropolitics is not only that an overdependence on crude oil can be a curse in general but also that one can actually correlate rises and falls in the price of oil with rises and falls in the pace of freedom in petrolist countries.

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Since 9/11, oil prices have structurally shifted from the $20-$40 range to the $40-$60 range. Part of this move has to do with a general sense of insecurity in global oil markets due to violence in Iraq, Nigeria, Indonesia and Sudan, but even more appears to be the result of what I call the "flattening" of the world and the rapid influx into the global marketplace of 3 billion new consumers, from China, Brazil, India and the former Soviet Empire, all dreaming of a house, a car, a microwave and a refrigerator. Without a dramatic move toward conservation in the West, or the discovery of an alternative to fossil fuels, we are going to be in this $40-to-$60 range, or higher, for the foreseeable future.

Politically, that will mean that a whole group of petrolist states — with weak institutions or outright authoritarian governments — will likely experience an erosion of freedoms and an increase in corruption and autocratic, antidemocratic behaviors.

Consider the drama now unfolding in Nigeria. Nigeria has a term limit for its presidents — two four-year terms. President Olusegun Obasanjo came to office in 1999, after a period of military rule, and was then reelected by a popular vote in 2003. When he took over from the generals in 1999, Obasanjo made headlines by investigating human rights abuses by the Nigerian military, releasing political prisoners and even making a real attempt to root out corruption. That was when oil was around $25 a barrel.

Today, with oil at $60 a barrel, Obasanjo is trying to persuade the Nigerian legislature to amend the constitution to allow him to serve a third term. A Nigerian opposition leader in the House of Representatives, Wunmi Bewaji, has alleged that bribes of $1 million were being offered to lawmakers who would vote to extend Obasanjo's tenure.

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