- Which country's economy is most like a "rentier" economy? Why?
- In which country does petroleum production have the greatest influence on domestic government and politics? Why?
- Which country's regime is most dependent upon continued petroleum production and stable oil prices? Why?
Thursday, May 9, 2013
Country Context question, 7
7. Russia, Nigeria, Iran, and Mexico produce large quantities of petroleum.
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7. Russia, Nigeria, Iran, and Mexico produce large quantities of petroleum.
a. Taking into account that Russia is among the top ten economies in the world and is a large manufacturer of a variety of goods we can get rid of the idea of this country’s economy being most like a “rentier” economy. Nigeria’s largest economic sector is the agricultural sector; therefore it wouldn’t be the most “rentier”-like economy. Mexico is also among the top economies of the world and is a large manufacturer of electronics and other products. Iran’s economy is definitely the most rentier economy since oil and gas production take a prominent place in its economy. By expressing this it doesn’t mean that the other economies are not rentier economies in a way, just that Iran is the most like a rentier economy.
b. Oil revenue in Nigeria has a large impact on domestic government and politics since a large part of this income is used to pay for some government spending, officials, and other projects. When electing a president, there is lots of importance on his plans for the oil industry since the economy is so dependent on it.
c. Nigeria regime is most dependent upon continued petroleum production and stable prices because there has been evidence of revolts when prices have risen. For example, when president Jonathan removed a $7 billion annual subsidy for oil, people, this caused the prices to go up, provoking protests by the Nigeria people.
a) A rentier economy is dependent on the “rent” of a commodity to clients. Nigeria’s economy is most like a rentier economy because they depend on the income of oil and international corporations control oil fields.
b) Petroleum production affects the political process in all Nigerian states because they expect a hand out from the federal government; the central government has to divide the budget among the 36 states, which often escalates to tensions and conflict. For example in 1967 the Southern Delta States declared independence and created the sovereign nation of Biafra, a civil war that lasted until 1970 broke out and caused the deaths of thousands. Even today the debate is ongoing, should oil producing states get more money from the federal government?
c) Nigeria’s regime is most dependent on oil and stable prices because of the political culture of Nigeria. They expect a piece of the pie, the federal budget, and loyalty to the government correlates to the conditions this money brings to the state, the standard of living.
The seventh question is:
7. Russia, Nigeria, Iran, and Mexico produce large quantities of petroleum.
a. Which country's economy is most like a "rentier" economy? Why?
b. In which country does petroleum production have the greatest influence on domestic government and politics? Why?
c. Which country's regime is most dependent upon continued petroleum production and stable oil prices? Why?
This is a 9-point question.
There are three points to be earned for each of the three parts of the question. One point for an identification and up to two points for the explanation. I think it's possible to make a case for any of the identified countries in each part of the question, but it's easier to make cases for some countries than others.
The question is asking about how well you know what a rentier economy is and the relationships between large-scale natural resource production and politics and regimes.
I am assuming a definition of a rentier economy to be one which is dependent to a large degree on the sale of a resource rather than the productive activity of citizens. Politically, a rentier economy can be "insulation" between the government and the citizens (little or no taxes are necessary so the government is not dependent upon the citizenry; lowered demands for accountability since citizens are not paying for spending and corruption by the government; and low levels of participation by citizens in non-rentier states. Another assumption I begin with is that a rentier economy will influence a regime to be less representative and less democratic on average than regimes in non-rentier states.
Alejandro Caldera wrote:
7. Russia, Nigeria, Iran, and Mexico produce large quantities of petroleum. a. Taking into account that Russia is among the top ten economies in the world and is a large manufacturer of a variety of goods we can get rid of the idea of this country’s economy being most like a “rentier” economy. Nigeria’s largest economic sector is the agricultural sector; therefore it wouldn’t be the most “rentier”-like economy. Mexico is also among the top economies of the world and is a large manufacturer of electronics and other products. Iran’s economy is definitely the most rentier economy since oil and gas production take a prominent place in its economy. By expressing this it doesn’t mean that the other economies are not rentier economies in a way, just that Iran is the most like a rentier economy.
b. Oil revenue in Nigeria has a large impact on domestic government and politics since a large part of this income is used to pay for some government spending, officials, and other projects. When electing a president, there is lots of importance on his plans for the oil industry since the economy is so dependent on it.
c. Nigeria regime is most dependent upon continued petroleum production and stable prices because there has been evidence of revolts when prices have risen. For example, when president Jonathan removed a $7 billion annual subsidy for oil, people, this caused the prices to go up, provoking protests by the Nigeria people.
Part "a." offers a very good rationale for identifying Iran as the most "rentier-like" economy. The explanation of reasons for not choosing the other alternatives in this example makes the explanation for choosing Iran simpler. (3 points)
Part "b." could use some of the comparisons so prominent in part "a." It also lacks what would be helpful specifics. The name of any of the country choices in this question could be accurately substituted for Nigeria in the first sentence. The second sentence offers a pretty accurate assertion, that would be helped by some specifics. (2 points)
Part "c." discusses policy not regime. To follow on with the Nigerian example, citing military coups in the past that resulted from economic (rentier) problems could be useful. (0 points)
This response earns 5 points.
The seventh question is:
7. Russia, Nigeria, Iran, and Mexico produce large quantities of petroleum.
a. Which country's economy is most like a "rentier" economy? Why?
b. In which country does petroleum production have the greatest influence on domestic government and politics? Why?
c. Which country's regime is most dependent upon continued petroleum production and stable oil prices? Why?
This is a 9-point question.
There are three points to be earned for each of the three parts of the question. One point for an identification and up to two points for the explanation. I think it's possible to make a case for any of the identified countries in each part of the question, but it's easier to make cases for some countries than others.
The question is asking about how well you know what a rentier economy is and the relationships between large-scale natural resource production and politics and regimes.
I am assuming a definition of a rentier economy to be one which is dependent to a large degree on the sale of a resource rather than the productive activity of citizens. Politically, a rentier economy can be "insulation" between the government and the citizens (little or no taxes are necessary so the government is not dependent upon the citizenry; lowered demands for accountability since citizens are not paying for spending and corruption by the government; and low levels of participation by citizens in non-rentier states. Another assumption I begin with is that a rentier economy will influence a regime to be less representative and less democratic on average than regimes in non-rentier states.
Alex Astruc said...
a) A rentier economy is dependent on the “rent” of a commodity to clients. Nigeria’s economy is most like a rentier economy because they depend on the income of oil and international corporations control oil fields.
b) Petroleum production affects the political process in all Nigerian states because they expect a hand out from the federal government; the central government has to divide the budget among the 36 states, which often escalates to tensions and conflict. For example in 1967 the Southern Delta States declared independence and created the sovereign nation of Biafra, a civil war that lasted until 1970 broke out and caused the deaths of thousands. Even today the debate is ongoing, should oil producing states get more money from the federal government?
c) Nigeria’s regime is most dependent on oil and stable prices because of the political culture of Nigeria. They expect a piece of the pie, the federal budget, and loyalty to the government correlates to the conditions this money brings to the state, the standard of living.
Part "a." begins with a good definition and offers an adequate explanation of how Nigeria fits that definition. (3 points)
Part "b." points to a political result of rentier status in Nigeria and offers a dated and oversimplified example. Fortunately, it cites ongoing debates about distribution of oil revenues. More explanation would have more surely guaranteed earning all points on both parts "a." and "b." (3 points)
Part "c." does not explain how expecting "a piece of the pie" (chop-chop politics) affects the regime. The regime is a presidential-congressional federal structure with a separation of powers and guaranteed civil rights.
This response earns 6 points.
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