How to End the Oil Curse

Stop Trading With Autocrats

Oil well fires rage outside Kuwait City in 1991. Wikimedia Commons

For the past 40 years, the greatest threats to the West have emerged from oil-exporting states. Oil funded Iraq’s invasion of Kuwait, Libya’s support for terrorist groups, and the build-up of the Soviet Union’s nuclear arsenal in the 1970s and 1980s. More recently, it has funded the rise of the Islamic State (also known as ISIS), Russia’s aggression in Crimea, and Iran’s support for Hamas and Hezbollah.

Oil provides rulers with a source of unaccountable power, perhaps the largest such source in the world. Outside of democracies, oil revenues flow to whichever regime or armed group controls the wells by force. These revenues allow leaders to dominate their people through coercion and patronage (as in Iran and Russia) and provide armed groups with the resources to wage civil war (as in Iraq and Yemen). They have also empowered regimes to indoctrinate their populations with intolerant ideologies and, especially in the case of Saudi Arabia, to spread those ideologies worldwide.

The unaccountable power of oil explains what the political scientist Michael Ross calls “the oil curse.” Oil states are 50 percent more likely to be authoritarian than are non-oil states, and between 1980 and 2013, oil-producing autocracies were four times less likely to transition to democracy than their non-oil-producing peers. Oil states in the developing world are also more than 200 percent more likely to suffer civil wars; 25 percent of oil states are currently embroiled in one (compared with 11 percent of non-oil states). According to Ross, oil states are today no richer, no freer, and no more peaceful than they were in 1980—a marked contrast to most states in the developing world, which have made significant economic and political progress since then. More than 50 percent of the world’s traded oil today comes from authoritarian or failed states. 

Western policymakers have tried three main strategies to check the power of oil in nondemocratic exporters. At times, they have formed alliances, hoping to influence an authoritarian regime to favor their own national interests.

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