Evaluating Oil Busts’ Political Effects: The 1980s Case

• In Event: Natural Resources and Democracy

Abstract

Falling international oil prices are widely assumed to trigger political instability in oil-producing states. Moreover, certain cases of political instability following oil busts, like the collapse of the USSR, are well documented. However, it is unclear whether those cases are generalizable, as cross-national comparisons of oil busts’ political effects are quite rare. This paper addresses this lacuna by presenting a cross-regional analysis, comparing petrostates’ political performance during the 1983–1990 period with their performance in the eight years preceding it (1975–1982). Using multiple measures of political stability, it finds that most petrostates were more or equally stable during the oil bust than during the prior oil boom. Our perceptions of instability are therefore driven by a few prominent outliers—none of which was contending solely with low oil prices, at the time it became unstable. The paper concludes that, to accurately assess the threats posed by low oil prices, we need to broaden the scope of our analyses and be more attentive to alternative explanations for petrostate instability.

Author

• Emily Meierding, Naval Postgraduate School