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Speaker:
Jonas Hamang ( Kristiania University College)

Declining oil production leads to more democratic governments

^{(with Jørgen Juel Andersen and Michael Ross)}

Abstract: Many oil-rich countries — such Russia, Saudi Arabia, Iran and Venezuela — are ruled by authoritarian governments. How will they be affected by a global transition away from fossil fuels? We address this question with a novel approach, analyzing political change in 36 oil producing countries that passed their historical production peak and experienced at least 10 years of declining production. Using new proprietary data on oil field life cycles and an event-study design, we find that once production began to fall these countries became significantly more democratic, relative to both the overall sample trend and the parallel pre-peak trends. Ten years after their oil peak, 33 of the 36 countries had become more democratic. After 15 years, their relative democracy scores increased by an average of 9 percentage points. For countries that transitioned after 1980, these scores rose about 13 percentage points, and for larger producers, by about 20 percentage points. Our findings suggest that a global transition toward renewable energy may make the governments of oilrich countries significantly more democratic. It may also cast light on the long-term effects of economic sanctions on oil-exporting countries like Russia.

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