Welcome to my website! I invite you to peruse summaries of my two books in progress. The first, which I am very close to completing, is entitled “From Institutions Curse to Resource Blessing.” The second, which I am coauthoring with Michael Albertus (University of Chicago), is tentatively entitled “The Endemic Flaws of Democracy.”
FROM INSTITUTIONS CURSE TO RESOURCE BLESSING
(Skip below for access to all six chapters.)
In my book I uncover three puzzles that challenge the Resource Curse. Statebuilding and industrialization in the Western world was often catalyzed by the exploration and production of natural resources. Resource-reliant countries in the Middle East are no worse off today than they were before they discovered oil and no worse off than their neighbors without oil. After the 1973 oil shock new oil producers made big improvements in key political, economic, and social indicators.
To make sense of the correlation between natural resources and underdevelopment in light of these puzzles I argue that, rather than a resource curse, what oil and mineral reliant countries suffer from is an institutions curse. I demonstrate that resource reliance is not the direct result of oil and minerals that fall like manna from heaven, but is instead endogenous to weak state capacity and low quality institutions. These latter variables explain a large share of the variation in oil capital, exploration, oil discovery, oil production, oil taxation, and oil exports.
I provide a theory to explain this new finding. Natural resources become the default sector in states that cannot otherwise provide secure and inclusive property rights for three reasons. First, oil and minerals represent the lowest fiscal transaction costs for governments that are desperate for revenues in a though environment where economic diversification is wanting due to insecure property rights and the state cannot raise regular revenues. Second, unlike domestic asset holders, foreign investors are able to protect their property rights in this context. Even when political risks are prohibitive, they are politically powerful enough to do so, enjoying the backing of their home governments, rich enough, with market valuations that often exceed by several multiples the GDP of host countries, and knowledgeable enough, possessing armies of shrewd geologists, engineers, accountants, and tax attorneys. Third, in advanced western democracies voters look askance at the exploration, production, and transportation of oil, natural gas, and precious metals and hard rock minerals due to these activities’ visible footprints and negative spillovers. Therefore, they often push politicians and regulators to push these activities onto somebody else’s backyard. More often than not, the result is regulatory arbitrage: investors and international oil companies look to developing countries with lower taxes, weaker bureaucracies, and laxer regulations.
I also show that once you isolate the exogenous variation in oil, the effect of oil is surprisingly salutary. In other words, there is a resource blessing. Increases in oil actually improve non-oil taxation, the rule of law, democracy, and the provision of public goods, among other outcomes. Therefore, discoveries of oil, gas, and minerals may actually constitute a resource blessing that can help ameliorate an institutions curse. My book also provides a theoretical framework that can help explain the deeper, underlying causes of development. Drawing on an increasingly influential recent literature I argue that a country’s fundamental institutions are largely a product of factor endowments that long predate the advent of a global economy that runs on oil and minerals. Places where family farms were the modal unit of agricultural production because the climate and soils were favorable to the cultivation of cereals are more likely to exhibit liberal democracy today; places where plantations and cash crops were favored engendered long-lasting patterns of oligarchy; places where settled agriculture was possible only because elites provide irrigation gave birth to enduring feudalism; and places that were too dry for any agriculture favored tribalism that eventually culminated in traditionalist monarchical regimes. My book therefore also helps explain the evolution of European development and contrasts it with that of the Middle East.
“From Institutions Curse to Resource Blessing” draws on a bevy of recent articles that have already proven influential and chapters in edited volumes. Among other places, I have published these in the American Political Science Review, Journal of Politics, and Comparative Political Studies. These papers have received glowing media coverage, including profiles in the Wall Street Journal, The Economist, Bloomberg News, and Foreign Policy, among other places. I have also published an op-ed that has disseminated my results to the general public in the Wall Street Journal. More importantly, these articles have stimulated a debate about the impact of natural resources, the origins of political institutions, and the causes of the variation exhibited during the Arab Spring. My APSR article, for example, has already produced responses published in CPS, BJPS, and Economica.
Here is a link to Chapter 1, "From Institutions Curse to Resource Blessing: An Introduction"
Here is a link to Chapter 2, "The Institutions Curse Theory"
Here is a link to Chapter 3, "Not Manna From Heaven After All: The Endogeneity of Oil"
Here is a link to Chapter 4, "The Resource Blessing"
Here is a link to Chapter 5, "The Arab Spring: Resource Curse or Monarchical Exceptionalism?"
Here is a link to Chapter 6, "From Institutions Curse to Resource Blessing: A Conclusion"
THE ENDEMIC FLAWS OF DEMOCRACY
In this book Albertus and I document and address several pressing problems about the causes and consequences of democracy. Why is it that almost half of all democratic transitions since World War II have ended in failure? Why has what seemed like the inexorable march towards democracy across the world recently stalled in the way of reversions to authoritarianism in important countries in Eastern Europe, Latin America, and Asia? And why has the quality and breadth of democracy been so disappointing in many developing countries so that levels of inequality, poverty, and corruption remain alarmingly high, even decades after transitions from authoritarianism?
Albertus and I argue that almost all democracies are flawed by design. The majority of democracies throughout history have been the product of a devil’s pact between outgoing elites and political entrepreneurs seeking to pry the door open so that they can also have a say. The price of increased competition and pluralism, however, is often the booby-trapping of democratic institutions with laws and procedures that shield elites from the rule of law and that give them an unfair advantage. They are therefore able to avoid prosecution for crimes perpetrated under autocracy, able to continue to amass wealth and political power, and able to exercise disproportional influence over public policy.
The result is democracies that are often even less fiscally progressive than their autocratic predecessors, which contribute to the widening of inequality and a reduction in opportunities for the majority, and that produce bitter disappointment among citizens.
Our book also promises to make two additional contributions. We seek to explain how it is that elites are created in the first place under authoritarianism. To do so we take a historical approach and explore how markets for land and capital were initially created across countries in ways that tilted the playing field in favor of some groups over others; endowing them with advantages in resources, human capital and political power they would later be able to deploy to exercise undue influence after democratization. We also seek to explain why some fledgling democracies are able to escape the devil’s pact that led to their genesis whilst others remained trapped in patterns of elite dominance and underperformance. Why do some democracies grow out of their endemic imperfections while others indefinitely reproduce them?
This book will draw on a bevy of recent articles and chapters in edited volumes. Among other places, Albertus and I have published these in the British Journal of Political Science, Comparative Political Studies, Comparative Politics, and International Studies Quarterly. We have also published several op-eds that have disseminated our results to the general public in the New York Times, Foreign Policy, Washington Post (Monkey Cage), USA Today, and Seattle Times.
And, unbelievably, Mike and I have had our work covered by the French media (Canal+) through an animated cartoon.
Supplementary (web) Appendices for Published Papers
Supplementary Appendices for Albertus, Michael and Victor Menaldo. 2012. "If You're Against Them You're With Us: The Effect Of Expropriation On Autocratic Survival." Comparative Political Studies.
Supplementary Material for Victor Menaldo. 2012. "The Middle East and North Africa's Resilient Monarchies." Journal of Politics.
Supplementary Material for Mike Albertus and Victor Menaldo. Forthcoming. "Gaming Demoracy."British Journal of Political Science.
Odds & Ends