Cursed New States? Explaining Democratic Divergence in Extreme Rentier States

• In Event: Fiscal States in Developing Countries: Origins and Developmental Implications

Abstract

New states often find themselves highly dependent on a single commodity for revenue mobilization. This is not surprising given that control over valuable resources was often a key strategic objective of independence movement itself. But the literature has thus far neglected to explain how this reliance affects subsequent development and what accounts for the differences among states. Rentier state and resource curse theories simply predict that countries will experience authoritarianism, conflict, and underdevelopment. Yet, the political outcomes of young extreme rentier states vary substantially in practice, even among states with broadly similarly characteristics. Through a comparative case study of Timor-Leste and South Sudan, two young nations in which the discovery of oil preceded independence, we explore why this is the case. We find that the ideological commitments of the independence movement, the political and legal institutions established, the nature of political competition, as well as the approaches of external actors have dramatic consequences within the overarching confines of resource dependence. This highlights the importance of institutional design, ideology/norms, and constructive international engagement.

Authors

• Moritz Schmoll, Mohammed VI Polytechnic University

• Geoffrey Swenson, City University of London