The paradox of plenty: oil booms and petro-states

This book is based mainly on the transformation of Venezuela from an agrarian economy into a centralised petro state overwhelmingly dependent on the oil industry not only for exports but also for government revenue. Draws on the experiences of Algeria, Indonesia, Iran, Nigeria, and for contrast, Norway. The author presents the thesis that prolonged mineral booms, where proceeds accrue to the government, not only lead to a loss of financial discipline and deterioration in the competitiveness of agriculture and industry, but also shape the character of poorly developed states. They encourage a culture of rent seeking rather than productive activity and of avoiding both domestic taxation and the political systems of accountability associated with it. The paradoxical legacy of oil wealth is therefore much greater fragility in governmental and civic institutions than in states less well endowed with mineral resources. (Extract from a review by Richard N Cooper)