Oil-sector Strategies of States in the Global South: Comparing State Involvement in the Oil Sectors in Brazil, China and Mexico

Oil-producing states in the Global South adopt different strategies to influence and control their oil sectors. Why does an oil-producing state choose one approach over others? Why does a state change its approach? This dissertation argues that a government’s ideological orientation and a country’s oil balance combine in different ways to generate an oil-sector strategy that is either closed, mixed or open. While the variable of orientation represents the degree to which the government wants to intervene in the economy, the variable of oil balance constrains, facilitates or moderates a government’s preferred oil-sector strategy, depending on the interaction effects that occur from the specific aligning of these independent variables.This research presents four key findings. First, the strategy that immediately follows oil-sector nationalization sets the parameters for politically acceptable oil-related policies going forward. This original strategy often has lasting effects. Second, these constraints allow for change to occur but often limit the extent of that change. Third, a radical change in a government’s orientation or oil balance opens space for major change to an oil-sector strategy. Fourth, the new strategy that comes after this critical juncture sets new parameters for oil policy. This argument emerged inductively from intensive study of ‘big’ Global South oil-producing countries of Brazil, China and Mexico, which included elite interviews as well as studying relevant works in political science, especially historical institutionalism, constructivism and certain theories of public policy. The methods of process-tracing and comparative historical analysis helped uncover the causal variables of government orientation and oil balance, and to identify the processes and logic that ultimately produced this mid-range theoretical argument about oil strategies. The need to identify causes and systematize explanations for a state’s choice of oil-sector strategy stems from the fact that an oil industry is often the most capital-intensive, largest tax contributor and employer in an oil-producing country of the Global South with far-reaching impacts on governance and policy, as well as on political institutions and economic development.Ph.D