The Strategic Picture of Oil and U.S. Energy Policy Recommendations for the Next Decade

Abstract

In the past century, the world has seen the economies and institutions of some major oil-exporting countries falter and fail because of an increasing reliance on oil revenues to run the nation. This inverse relationship between dependence on natural resource exports and the economic growth rate of a region is known by many names, including the paradox of plenty, the “devil’s excrement,†and the resource curse. Though its impacts can be devastating on the economies and livelihoods of oil-exporting nations, the resource curse does not affect every single oil producing country in the world. There have been many countries throughout history, such as Australia and Norway, who depend on the export of single-point natural resources such as oil for revenues but have not been afflicted by the negative consequences of the resource curse. In this paper I shall examine the resource curse and the impact it has had on three of the world’s largest petroleum exporters: Venezuela, Nigeria, and Kazakhstan. These three nations, each the largest petroleum exporter within its region, suffer from this resource curse to some extent but with vastly different causes and consequences. I wish to compare the impact of oil revenue dependence on each country’s economy and social and political institutions, and will attempt to explain the differences in both the severity and causes of the resource curse in each case. I will also present the steps that each country has taken, if any, in an effort to reduce and reverse the consequences of their over dependence on the substance that makes the world go round.