The Perils of the Petro-State: Reflections on the Paradox of Plenty

While the industrialized countries trembled at the prospect that the Organization of Petroleum Exporting Countries might become the world's most powerful banker, the oil exporters were euphoric. Twenty-five years after the 1970s boo, and despite two other major price hikes in the 1990s, most oil-exporting countries are in crisis, especially the capital-deficient ones. What has been called the paradox of plenty poses a significant puzzle for both scholars and policymakers. That oil-rich countries - as dissimilar as Venezuela, Iran, Nigeria, and Indonesia - should end up in profound economic and political crisis is remarkable.