Governing Natural Resources for Inclusive Development
Introduction: The Resource Curse as a Primarily Political Phenomenon
The extraction of minerals and hydrocarbons lies at the core of modern economic and social development. Coal mining was central to the industrial revolution, and the labour consciousness and organization which it inspired became, so Mitchell (2012) has argued, constitutive of modern democracy. More recently, mineral extraction has driven economic growth and social investment in countries as diverse as Canada, Chile, Botswana, and Australia. And in a general sense, oil is at the very centre of contemporary capitalism (Huber 2009). The consequences of extractive industry have not, however, always been felicitous. As Michael Ross (2012) has recently shown, performance across oil dependent polities and economies has been very uneven. A quick sampling of The New York Times or The Economist would similarly reveal cases where resource extraction comes coupled with lost opportunities, poor economic and social indicators, democratic failure, and civil strife: the so-called 'natural resource curse' (Auty 1993, 2001).
There is a cottage industry of scholarship that attempts to confirm, refute, or explain the existence of this ostensible resource curse. The purpose of this chapter is, however, different. It focuses on the institutional and political relationships that govern the interactions between resource extraction, economy, and society. More specifically, it outlines elements of a framework for analysing these relationships, the conditions under which they are likely to be reproduced or changed, and the ways in which they might mediate the relationships between extraction and inclusion. The chapter grounds this framework in two perspectives. The first of these draws on a more general literature dealing with the politics of institutional change. The second engages with the specific relationships of scale, space, and time that characterize the natural resource sector and give it its specificity. The implication will be that any effort to understand the governance of extraction and of its relationships to development must be spatially and historically explicit.
The framework is inspired by three claims. The first is Terry Karl's insistence (2007, p. 256) that 'the "resource curse” is primarily a political not an economic phenomenon', and that therefore the institutional and political distortions that characterize many extractive economies 'cannot be undone without a huge coordinated effort by all the stakeholders involved' (Karl 2007, p. 258). Second is the assertion that any political economy of extraction must deal explicitly with the materiality (and therefore spatiality) of the resource in question (see Bridge 2008; Bakker and Bridge 2006). Third is the argument of Mahoney and Thelen (2010) that path-dependency arguments should be combined with theories of institutional change that attend to both endogenous and exogenous sources of such change. Taken together, and applied to the particular case of natural resource governance, these claims point us towards the analytical centrality of politics, space, and time.
In the course of elaborating this framework, the chapter makes the following arguments. First, prior political settlements and coalitions structure the forms taken by an expanding extractive economy but are subsequently shaped by this expansion. Second, a critical factor determining how this subsequent shaping occurs is the extent to which social mobilization and shifting political coalitions drive institutional innovation and the extent to which institutional learning (in the private, public, and civic sectors) occurs such that social conflict can be turned into institutional change. Third, the actors involved in these processes operate at subnational, national, and transnational scales, and there are important interactions among these scales. Actors operating at transnational scales include companies, multilateral bodies, and civil society networks. These actors influence patterns of investment, social conflict, and institutional learning and make clear that a political-settlements and political-coalitions approach to natural resource governance cannot focus on the national level alone (e.g. Khan 2010; Acemoglu and Robinson 2012).
The chapter is organized as follows. Following a summary review of how resource curse debates have converged on the centrality of governance, I outline an approach to institutional continuity and change that draws on notions of political settlement and political coalition. I then link these insights to a discussion of the centrality of space, scale, and time for analysing the politics of natural resource governance. Finally, and in light of these concepts, I explore institutional arrangements through which resource extraction might foster inclusive development and the conditions under which these institutions might emerge.