How oil helps dictatorships survive

June 17

Thai military secure a bridge adjacent to the Bangkok sky train preventing anti-coup demonstrators from gathering on June 1, 2014 in Bangkok. Thailand is known as a country with a very unstable political record and is now experiencing it’s 12th coup with 7 attempted previous coups. (Photo by Paula Bronstein/Getty Images)

The latest coup in Thailand is the country’s twelfth since the end of absolute monarchy in 1932.  This coup overturned a democracy, but most of the others ousted dictators.  Since 1932, Thailand had experienced seven different dictatorships before the military seized power in May.  Instability there has sparked headlines, like those here, here, and here, predicting that tourists will bolt en masse to neighboring Malaysia as a result. Why? Well, while coups are fairly commonplace in Thailand, Malaysia has yet to experience one. Ruled by the Barisan Nasional for decades, Malaysia is run by one of the most stable dictatorships in the world.  It is also one of the top oil and natural gas producers in the region.

In a new article in the British Journal of Political Science, we show that Malaysia’s relative stability and its resource wealth are not coincidental.  Resource wealth has been associated with dictatorship for some time. According to the so-called resource curse argument, resource abundance hurts prospects for democracy because it enables dictatorships to co-opt citizens with extensive welfare spending, equip security forces with the latest weapons to repress citizens, or both. Though some scholars have questioned the negative effect of oil wealth on democratization, a bevy of studies, like this one, this one, and this one, show that democracy is indeed less likely in oil-rich countries.

Our study demonstrates a different reason for the relationship between oil and stable autocracy.  It shows that oil riches prop up dictatorships by defending them against overthrow by rival autocratic groups. Increases in oil wealth make it easier for dictatorships to purchase the military’s support, decreasing the chance of seizures of power by rogue military factions, extremist insurgencies, or others bent on replacing one tyranny with another.  In this way, oil prolongs the life of authoritarian regimes.

We unearth this relationship by using a new measure of autocratic durability, which enables us to look beyond oil’s correlation with democracy in order to examine how it affects the duration of autocratic regimes. Older data limited researchers to assessing oil’s impact on the chance of democratization, but not its effect on prospects for a new dictatorship.  Yet, this distinction is an important one since stability has major economic as well as human consequences.  Compare a place like Central African Republic, which has been ruled by a series of relatively short-lived dictatorships for all but 10 of the 48 years since independence, with one like oil-rich Gabon, which has only been ruled by one. CAR remains poor not only because it lacks oil, but also because instability and insurgency damage infrastructure, deter investment and destroy lives.

The graph below illustrates our findings.  It shows the impact of changes in oil rents on two outcomes: transition to democracy (as in Brazil in 1985) and transition to new dictatorship (as in the Iranian revolution in 1979). It displays the effect of changes over time in oil rents within countries – comparing countries when they have little oil income to periods when they have a lot of it – while controlling for all of the usual suspects.  To sum up the basic message: oil rents exhibit little impact on democratic transitions, but decrease the chances of transitions to new dictatorship.


This graph shows the simulated marginal effect of an increase in oil rents from the 10th to the 90th percentile of the distribution (using the approach advocated here) on the likelihood of transition to democracy and transition to new dictatorship. (Data: Authors’ Autocratic Regime Data; Figure: Joseph Wright/The Monkey Cage)

Oil wealth and long-lasting dictatorship go hand in hand  – as in Malaysia, Saudi Arabia, and the United Arab Emirates – not necessarily because oil creates barriers to democracy (after all, Norway’s got oil too) but because it prevents new dictators from seizing power. In other words, increases in oil rents stabilize dictatorships by suppressing challenges from future autocrats, not by quelling democratic opposition movements.

Our findings in some ways offer a potential silver lining to the oil curse.  Though oil wealth does indeed help dictatorships stay afloat, it may also help protect citizens from the turmoil that can come with repeated episodes of regime breakdown, including violence and economic losses for citizens. Even in Thailand, which saw little bloodshed during the latest coup, the tourism industry – a major source of revenue for that country – is expected to take a serious hit.

This is not so say that oil wealth always has positive consequences – indeed research by Michael Ross has shown that it is associated with the onset of civil war, gender inequality, and even reduced  inter-state cooperation. The political stability it provides, however, may buffer citizens from the violence, economic destruction, and social upheaval that are so often a part of autocratic regime collapse and the emergence of new dictatorships.

****

Erica Frantz is Assistant Professor of Political Science at Bridgewater State University.  She specializes in the politics of dictatorship.

Barbara Geddes is Professor of Political Science at UCLA. She works on democratization, authoritarian transitions, and political development, with a focus on Latin American politics.

Joseph Wright is Assistant Professor of Political Science at Pennsylvania State University. His research focuses on  comparative political economy and autocratic politics.

The data used in this research were funded by the National Science Foundation (BCS-0904478 and BCS-090463).

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