Prelude To The Resource Curse: Oil And Gas Development Strategies In Central Asia And Beyond

this article is to explain these empirical puzzles and, in doing so, to formulate a broader theory of the initial formation of natural resource development strategies. In short, we argue that state leaders choose energy development strategies based on the domestic constraints they face when they either discover or gain newfound authority over their energy reserves: (1) the availability of alternative sources of rents; and (2) the level of political contestation. These two domestic factors determine the amount of resources that state leaders possess in the status quo versus the costs they must continue to incur in order to satisfy their 4 supporters and pay-off their opponents. Hence, they also determine the extent to which state leaders must rely on energy sector development to retain their power. Where state leaders enjoy a high degree of access to alternative sources of rents and a low level of contestation, they have sufficient resources to reward their supporters and appease or defeat their opponents. Thus, they can afford to nationalize (or retain state ownership) and to minimize international involvement because they can delay the financial benefits accruing from oil and gas exploitation. Where state leaders have a low degree of access to alternative sources of rents and a high level of contestation, they lack sufficient resources to reward their supporters and appease or defeat their opponents. Thus, they privatize their energy sector with the direct involvement of international actors in order to reap the financial benefits from exploiting their precious reserves immediately. The article proceeds as follows. First, we assess the extent to which the existing literature is relevant for explicating our puzzle. Second, both building on and departing from this lite..