Oil and Unbalanced Globalization

Oil-exporting states occupy a paradoxical position in the international system. Economically, they are highly globalized, as large flows of goods, services, capital, people, and information travel across their borders. They are also the source of the world’s single most valuable commodity, and hence influential. Yet politically, they are strikingly unglobalized: they are exceptionally reluctant to participate in international institutions that require binding commitments. We demonstrate empirically that oil wealth is associated with both high levels of economic and social integration and low levels of political integration – a condition we call “unbalanced globalization, ” in contrast to more balanced globalization of other countries. We also develop an explanation for it, based on the unique advantages in trade and finance of the oil-exporting states, and their tendency to export an unusually narrow range of goods