Rentier States and the Resource Curse: The Origins of Development-promoting Institutions in Trinidad and Tobago

• In Event: 397 - Section on Labor and Labor Movements Roundtable Session (one-hour).
  In Refereed Roundtable: Table 04. States, Workers and Labor Movements

Abstract

The rentier state and resource curse literatures have failed to explain the observed variation in economic outcomes across resource-rich developing countries. More recently, what we may call a “post-curse” literature has amassed compelling evidence that not all states in resource-rich developing countries are the same, and that this variation in the institutional quality of these states determines the developmental success (or failure) of these countries. However, we do not yet fully understand why some resource-rich states developed the institutional quality to channel resource wealth toward economic development. This paper seeks to answer this question through a unique case study of oil-rich Trinidad and Tobago. Trinidad and Tobago, despite receiving large amounts of income from external sales of oil and gas, possesses higher quality state institutions than most other resource-rich states. Using a postcolonial approach, I trace this institutional outcome to two factors: (1) the strength and autonomy of labor, which, in turn, is a legacy of a set of prior social relations between the colonial state and labor with regard to the principal economic sectors; and (2) the geostrategic importance of Trinidad oil to the British empire during WWI and WWII. I show how the intersection of these two factors qualify the construction of higher quality state institutions, which are better able to successfully manage resource wealth. This analysis challenges existing frameworks that over-emphasize the homogeneity of rentier state institutions, and draws attention to the role of labor unions in institutional development, which is largely ignored in rentier state theory.

Author

• Zophia Yolande Edwards, Boston University