draining development.pdf - Khazar University

478 Draining Development?4. For a relatively sophisticated database on the size of these rents, by country, seeAdjusted Net Saving (database), World Bank, Washington, DC, http://go.worldbank.org/3AWKN2ZOY0. Until World War II, the developed countries collectivelywere largely self-sufficient in energy resources, mainly coal, but also significantdomestic oil production in the United States. Their dependence on oilfrom the Middle East (and República Bolivariana de Venezuela) increased considerablyin the 1950s and 1960s, but in a context whereby the governments ofthe main oil-producing states (the Islamic Republic of Iran, Iraq, Kuwait, Libya,Saudi Arabia, and República Bolivariana de Venezuela) were generally dependenton and subservient to the United Kingdom and the United States, in particular.However, the balance of power gradually shifted from Western governments andcompanies to local politicians. The Organization of the Petroleum ExportingCountries, founded in 1960, was able to take advantage of oil shortages in 1973 toengineer production limits, rapidly push up the price to what were consideredcrisis levels, and, at a stroke, transfer something like 2 percent of the world’s grossnational product from oil purchasers into its own coffers. This set in motion twoprocesses that, amid all the volatility of the oil industry (and, increasingly, theallied natural gas industry), have continued up to the present. First, the averagerents from oil and gas production have been high, and governments have generallysucceeded in capturing a large proportion for themselves, to the extent thatthey have become wealthy and potentially powerful. Second, the large relativedecline in the North American contribution to global oil and gas production hasbeen substituted by new sources, nearly all in areas with few nonenergy incomestreams: the Russian Federaton, the Caucasus, Central Asia, and parts of Sub-Saharan Africa (Harris, Moore, and Schmitz 2009).5. There is a large literature examining the diverse effects of large resource rents onpolitics and governance. Among the many sources, see Bornhorst, Gupta, andThornton (2008); Bulte, Damania, and Deacon (2005); Collier (2006); Daniele(2011); and Torvik (2009).6. For good, brief general accounts of the international drug economy and itsdevelopmental consequences, see Keefer, Loayza, and Soares (2008) and Reuter(2008).7. As other chapters in this volume demonstrate, issues such as human traffickingand the production and smuggling of counterfeit goods are a peripheral part ofthe story. They are neither large in volume terms nor themselves major driversof the system. They matter to the extent that that they add more noise to crossbordercapital flows and make it more difficult to determine what is going on.8. The differences between overlapping concepts—such as collapsed, failed, failing,fragile, kleptocratic, neo-patrimonial, predatory, shadow, shell, rhizomic, andweak states (Blundo 2006)—are not relevant to this chapter. Some useful distinctionscan be made. For example, Stewart and Brown (2009) distinguishamong states that can be considered fragile because they lack authority, becausethey lack legitimacy, or because they fail to provide services. However, there is a