Crude Power: The Foreign Policy of Oil-Producing States

As the price of oil has risen in recent years, resource-producing states have become more prominent in the international system. It is often remarked upon that these states are more prone to aggressive behavior, with cases such as Iraq, Iran and Libya commonly cited. Yet it is unclear whether there is in fact a link between oil and aggression. In addition, previous scholarly work has treated oil as an exogenous source of revenue, useful only for enabling military buildup in conflict. This approach has serious limitations, as oil has been shown to exert significant independent influence on domestic political outcomes, i.e., in democratization and economic development. This dissertation therefore sought to explore and illustrate the ways in which the organization of the domestic political economy around oil production impacts foreign policy behavior. The key mechanism by which oil impacts foreign policy is through the oil-induced weakening of foreign policy institutions. Weak institutions affect foreign policy by reducing the levels of available information for policymakers (resulting in rational miscalculations), and by making policy formation more personality-driven (i.e., made by small groups or individuals, and less consensual and cooperative). Oil can also impact foreign policy by enabling military buildup (and so making the use of force easier and more attractive to leaders), and by reducing financial constraints on leaders.

The dissertation first outlines a new theoretical framework highlighting the ways in which oil production in major oil-producing states can produce aggressive foreign policy. This is followed by a statistical study which seeks to assess the link between oil production and aggression. The study finds a strong and robust link between oil revenues and conflict initiation, as well as between oil revenues and threat/sanction initiation. It also finds that oil is effectively a unique natural resource, as other natural resources are not linked with aggression. The dissertation follows this with in-depth analysis of three countries (Russia, Saudi Arabia, and Venezuela), as well as two minor case studies (Iraq and Kazakhstan). In all cases, oil appears to have undermined foreign policy institutions and increased military spending, a factor which appears to have encouraged aggression in all cases except Venezuela. Oil's impact on aggression in these cases is indirect (i.e., mediated through state institutions), but is extremely influential. Ultimately, this dissertation improves our understanding of the causes of conflict by exploring the ways in which state dependence on oil production increases the likelihood of foreign policy aggression.