Resource governance and developmental states in the global south critical international political economy perspectives

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The global political economy is in flux as a series of cumulative crises impacts itsorganization and governance The IPE series has tracked its development in bothanalysis and structure over the last three decades It has always had a concentra-tion on the global South Now the South increasingly challenges the North as the centre of development, also reflected in a growing number of submissions andpublications on indebted Eurozone economies in Southern Europe

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RESOURCE GOVERNANCE AND DEVELOPMENTAL STATES IN THE GLOBALSOUTH

Critical International Political Economy Perspectives

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DIASPORA ENGAGEMENT AND DEVELOPMENT IN SOUTH ASIA

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Resource Governance and Developmental States in the Global South

Critical International Political Economy Perspectives

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Introduction: Resource Governance at a Time of Plenty 1

Jewellord Nem Singh and France Bourgouin

The new context of resource dependency in the Global South 4 Extractive capital and economic development 6

Part I Theoretical Debates in Natural Resource Politics

1 States and Markets in the Context of a Resource Boom:

Jewellord Nem Singh and France Bourgouin

Resource exploitation from systemic perspectives 22

The resource curse, rentier politics and good governance 29 Re-engaging with critical IPE concepts 32 Authority in the global resource economy 35

2 Neoliberalism, Mineral Resource Governance and

Developmental States: South Africa in Comparative Perspective 40

Andrew Lawrence

The spectre of the developmental state in South Africa 41

Extractive economies in Southern Africa 48 BEE as substitute for a qualitative approach 54

Notes 57

3 Citizenship, Democratisation and Resource Politics 61

Jean Grugel and Jewellord Nem Singh

The resource wealth-democratisation debate 63 The limits of ‘oil impedes democracy’ thesis 63 Political economy of development approaches 66 Resistance politics, natural resources and patterns

Diffusion of codified international agreements 70Political incorporation of mining workers 73Bringing back politics in resource governance: the role

4 From ‘Good Governance’ to the Contextual Politics

France Bourgouin and Håvard Haarstad d

The good governance framework and the resource curse 89 The good governance of extractive industries 89

Processes of change in extractive politics beyond

Macroeconomic and ideological trends 96

Organisation of social interests 102 Conclusion: towards a contextual theory of extractive

5 The EITI Transparency Standard: Between Global Power Shifts

Ana Carolina Gonzalez-Espinosa and Asmara Klein

A sociological approach to the EITI: between norms

The EITI and its evolution towards an international standard

The challenge of local implementation: a transparency

Part III Neoliberalism, Resource Management and the Diversity of National Experiences in

the Global South

6 ‘The Chilean Wage’: Mining and the Janus face of the Chilean

Jonathan R Barton, Cecilia Campero and Rajiv Maher

Development and export-oriented production 131

A ‘Chilean miracle’: development models and mining

The resource curse of marginalised voices at

Conclusion: the janus face of mining and dependency y 145

8 Mining Governance in India: Questioning

Matilde Adduci

Reforming mining policies in India under a new paradigm 173 Combining privatisation and socio-economic sustainability

India’s mining governance: between developmentalism

Part IV Moving the Debate Forward: The Role

of Critical IPE Studies

9 Conclusions: Shifting Authority in the Age of

France Bourgouin, Andrew Lawrence and Jewellord Nem Singh

Changing patterns of state–market relations in

Depoliticisation, good governance and resistance politics 202

List of Illustrations

Figures

6.1 Copper exports and all mining exports

6.2 Contribution of the mining sector to GDP

6.3 Electricity consumption in Chile (GWh) 130 6.4 Non-consumptive water use by sector (M3/s/year) 130 6.5 Metal mining production (baseline: 2003 average = 100) 133

7.1 Colombian mining production, 2000–2009

(revenues percentage over ten-year revenue) 156 7.2 Mining exports, 1990–2010 (selected years) in

7.3 Growth of Colombian export sectors, 2007–2011

8.1 Sectoral net state domestic product (NSDP) growth rates,

Preface

This volume is about the global political economy of extractive tries More importantly, it offers a fresh approach to theoretical and inter-pretative challenges that such a complex, diverse and dynamic sectorevokes On the basis of an array of case studies from across the Global South, we explore the potential of critical IPE approaches to frame ourunderstandings of the inter-relationship between resource extractionand economic growth in the context of development The edited collec-tion brings together country and regional specialists from a broad range

indus-of social science disciplines as well as those who are interested in naturalresource politics and offers the first step in pushing further novel under-standings of resource-based development beyond the narrow resource-curse approach

This volume builds its argument on the contemporary dynamics of the global resources extractive industry as they are manifest in new geographies of production and consumption, changing patterns of FDI and plurality in governance practices The potential of resource-led economic development for countries of the Global South has been long debated and is still on-going indeed Yet, studies which approach thisquestion while fully acknowledging how the political and economicstructures have evolved, and especially so in the new millennium, are still relatively scarce In combination with the detailed cases, this volume examines the new architecture of global governance of resource sector management, with the aim of probing into the developmental potential of mining and oil extraction It offers a new look at the polit-ical economy of resource-led development by setting itself the task of studying and understanding the complexities of this new system of global governance in the resources sector, as articulated in the inter-relationship of diverse power structures which bind together multipleactors of influence – both public and private – from the local to the transnational However, we depart from existing literature on resourcegovernance by asking questions that link the IPE of natural resources to developmental roles of states, democratization and, most importantly,

a political approach to resource management as embedded in globalgovernance discourses

It is the ambition of this volume to set the debates into new tions It does not present a single theoretical outlook in the way of a

direc-new panacea – something to be applied by scholars to come Rather,

it builds the argument as to why it is important for scholars to adopt critical IPE approaches when endeavouring to offer new outlooks onextractive industries and their inherent political complexities In partic-ular, we recognise that neoliberalism has had variegated effects acrossthe Global South This picture is further complicated by sector-specificdynamics, making it difficult to speak of a discrete set of policy choices for resource-rich, poor countries Instead, we present how global govern-ance discourses and practices have shaped the new resource govern-ance agenda in the context of the boom, and consequently, the array

of unique country experiences that allowed some (but not all) to takeadvantage of the developmental spaces opened up by the resource boom since 2003 In other words, our collection opens up the debate

on resource-led development in two significant ways Firstly, we strate the importance of linking actual changes in the global resources industry and the intellectual thinking in realising the developmentalpotentials of mineral and oil wealth We posit that the restructuring

demon-of the international division demon-of labour has created both opportunities and challenges for new and old resource producers alike in transforming resource wealth into productive capital Most notably, policy debates at

the international and domestic levels have focussed, inter alia, on how to

minimise rent-seeking, sustain FDI inflows to keep the sector buoyant,and how states can enhance their accountability in the face of resistanceagainst mining-based development Our contributors offer some cues onhow some countries have successfully dealt with these issues, most exem-plary being Chile But equally, they also point to the challenges ahead

as a consequence of the long-term realities of extractive economies Secondly, we move the debate forward by interrogating the potentials and limitations of an ‘IPE of resources’ as an emerging approach to theresource abundance-economic development nexus The book, written by sociologists, geographers, political scientists and anthropologists, collec-tively expresses the contributors’ concerns regarding the highly econo-mistic approach in the mainstream literature on resource curse whichnarrowly defines the politics of natural resources as a function of insti-tutional design or as a problem of rent-seeking and good governance In contrast, we suggest that policy reforms are intrinsically political, and, therefore, the solution to the governance problem rests not so much

on alterations in regulatory frameworks, but on building state capacity That is, state capacity as it is negotiated politically among key stake-holders and the assertion of state agency and collective action in theface of very difficult circumstances Nevertheless, all the contributors in

this volume see the potential in using extractive resources as leverage fordevelopment, even if this must be done with caution We suggest here, emphatically, that policies must account for the intrinsically contestednature of resource extraction whenever governments make the deci-sion to open their resource sectors to large-scale mining This implies,above all, recognising new societal demands for inclusive development, greater confidence on states as agents of development and the impor-tance of pragmatism in grafting policy reforms The book is a rather small attempt to think more creatively about states, neoliberalism and the challenges of resource-led development

Jewellord Nem Singh, Sheffield, UK France Bourgouin, Copenhagen, Denmark

Acknowledgements

This book is the product of a collective effort started in November 2011

by Jewellord Nem Singh of Sheffield University in collaboration withFrance Bourgouin, then at the Danish Institute of International Studies (DIIS) and currently the manager of advisory services at Business for Social Responsibility (BSR) and affiliate to the Centre interdisciplinaire de recherche en développement international et société at UQÀM (Université

du Québec à Montréal) (a workshop was organised in Copenhagen, ering together many international scholars, at senior, early career andPhD levels) We were both determined to explore the complexities of the political economy of natural resource extraction in the Global Southtoday and enrich the debates on the role of extractive industries in the context of development Most of the authors in this collection presentedpapers at the workshop, and new authors were invited to join the effort as

gath-we sought to develop a book that addressed the main political economy issues in different geographies and from different scholarly perspec-tives While not all papers were eventually included in the final outline,the disagreements and discussions in the workshop have substantively shaped our vision and argument, so we owe this to the active participa-tion of our fellow scholars

At Sheffield, we would like to thank Jean Grugel for her guidance andfor extending to us the facilities of the Sheffield Institute for InternationalDevelopment (SIID) In Copenhagen, Helle Ravnborg has offered inval-uable support in making this project a reality Our colleagues, includingJoe Turner, have been helpful in polishing the final version of this book project

We are grateful to the DIIS for having facilitated the workshop and

to the Lund University Centre for Sustainability Studies (LUCSUS) for having provided additional financial support Above all, we are grateful

to the contributors to this book for their enthusiasm and cooperationthroughout the project

We also express our deepest gratitude to Tim Shaw and Christina Brian

at Palgrave Macmillan’s International Political Economy Series for their support and patience in this process We thank the reviewers for their comments in improving the overall traction of our argument Amanda

McGrath was also instrumental in following through the ups and downs

of putting together this edited collection

Finally, the success of an intellectual project rests both on having asupportive academic environment and having been blessed with an understanding family Crucially, the book was written at a time of tran-sition and immense uncertainty for both editors, and, therefore, it is

of utmost importance to recognise the contribution of our friends andfamilies in Europe, Canada and the Philippines Our partners, Aidan and Patrick, as well as France’s kids have been very patient with us as we sought for a balance (and continue to do so) between our professional careers and family life, which oftentimes does not come easily Withouttheir love and enduring capacity to understand the stresses in academia, this book would not have been accomplished

Notes on Contributors

Matilde Adduci is Lecturer in the Department of Cultures, Politics and

Society at the University of Turin, Italy She attained an MSc degree

in Development Studies at the School of Oriental and African Studies (SOAS), University of London, and a PhD degree in Civilization, Societyand Economy of the Indian Subcontinent at the University of Rome ‘LaSapienza’

Jonathan R

Barton is Senior Lecturer in the Institute of Urban and

Regional Studies at the Pontificia Universidad Católica de Chile and

is Director of the Centre of Sustainable Urban Development He is ageographer, with a PhD in Economic History from the University of Liverpool, UK His research interests lie in issues relating to the poli-tics and planning of sustainable development at different administra-tive scales Recent work has focused on export-oriented development inChile and its impacts on local governance and sustainable development, particularly in relation to the salmon aquaculture, forestry and miningsectors With others, he has published books on political geography in Latin America, democracy in Latin America and environmental regula-tions and the globalisation of production He is on the editorial board

of several environment and planning journals, and has published in

English and Spanish, in journals such as Global Environmental Change, Globalizations, Journal of Agrarian Change, CEPAL/ECLAC Review and the w Revista Latinoamericana de Estudios Urbano Regionales (EURE) He has also

undertaken consultancy work for CEPAL/ECLAC, the World Bank, IDB,UNIDO and UNCTAD

France Bourgouin is Advisory Services Manager at BSR in Copenhagen

and affiliated to the Centre interdisciplinaire de recherché en pement international et société (CIRDIS) at the Université du Québec

dévelop-à Montréal (UQÀM) Over the past 12 years, she has been conducting research on the political economy of extractive industries, and mining

in particular, and mining policy in a development context Previous to BSR, she was a project researcher at the Danish Institute for InternationalStudies in Copenhagen Through her research, she has provided mineralgovernance and related advice (Corporate Social Responsibility [CSR], human rights impacts risks, political risk, institutional and regula-tory reform) to companies, governments and civil society throughout

Southern and Eastern Africa She has also conducted extensive researchwork in the region on policy liberalisation of extractive industries,MNC-artisanal mining relations, socio-economic impacts of mining development, cross-sector collaboration and local procurement Sheholds a PhD in Anthropology from Lund University, completed incollaboration with EHESS in Paris

Cecilia Campero graduated as a lawyer from the Universidad Católica

Boliviana, and has a masters in Human Settlements and the Environmentfrom the Pontificia Universidad Católica de Chile (UC) She is currently

a doctoral researcher in the Architecture and Urban Studies programme

of the UC and holds a Chilean national research scholarship Herprevious work focused on mining and gas firms and community agree-ments in the Bolivian context as a researcher on the ‘Negotiating NewPolitical Spaces’ project financed by the Norwegian research council Her current work builds on this previous experience and looks at thecomparative dimensions of extractive industry governance associatedwith legal frameworks, spatial planning considerations and community development in the mining regions of Chile and Bolivia Legal geog-raphy and regional planning constitute the principal research frame-works for this work

Olga L Castillo-Ospina is Professor in the School of Environmental

and Rural Studies and member of the research groups ‘Conflict, Regionand Rural Societies” and “Institutions and Rural Development’, all at theJaveriana University in Bogota, Colombia She is also a member of the International Network on Governance of Natural and Mineral Resources (GNMR) During the past few years she has focused her teaching and research activities on the consistency (or lack of it) between theories,discourses and practices of ‘Development’, including one of its most popular adjectives, such as Sustainable Development The Geopolitics of Energy Resources is also among her current research interests Her most recent publications include ‘¿Modelos de Desarrollo o de DesarrolloRural? Tres hipótesis para la discusión’ in Y Villagómez and M Guibert

(Eds) Territorios y Actores Rurales Latinoamericanos – Nuevas prácticas y Nuevos Modelos de Gestión (2012); ‘Colombia: Not the Oldest Democracy

in Latin America, but Rather a Fake One’ in B Howe, V Popovski and

M Notaras (Eds) Democracy in the South: Participation, the State and the

People, United Nations (2010); Paradigmas y Conceptos de Desarrollo Rural

(2008); and El Desarrollo ¿Progreso o ilusión? – Aportes para el debate desde

el ámbito rural (2007).

Ana Carolina Gonzalez-Espinosa is Research Associate at Externado

University in Colombia and a PhD student at Sciences Po Paris,France She was Visiting Fellow at Columbia University and PontificiaUniversidad Catolica del Peru Her dissertation analyses extractive companies as political actors and identifies their role on transparencyand accountability promotion at the local levels Her research inter-ests include natural resource governance, anti-corruption studies andsocial accountability in Latin America Her recent publications are on the subjects of resource revenue accountability in Colombia, Left extrac-tivist projects in Bolivia, Ecuador and Venezuela and she is working on

an edited book forthcoming with Externado University Edition She previously worked at the United Nations Development Programme (UNDP), Transparency International Colombia, as a consultant for U4Anti-Corruption Resource Centre and Revenue Watch Institute

Jean

Grugel is Professor of International Development and Director of

the Sheffield Institute of International Development at the University of

Sheffield, UK Publications include Democratization (2013), The Politics of Poverty Reduction (with Mosley, P., B Chiripanhura and B Thirkell-White (2012), Governance after Neoliberalism in Latin America (with Pia Riggirozzi, 2009) and Critical Perspectives on Global Governance Rights and Regulation

in Governing Regimes (with Nicola Piper, 2007) Articles have appeared in the Journal of European Public Policy, Human Rights Quarterly, Development and Change, Journal of Latin American Studies, Global Governance, and Third World Quarterly and y International Sociology She was a trustee of the non-governmental organisation (NGO) Childhope for several years, is a fellow of the RSA and was elected to the Academy of Social Sciences in

2012 Her research interests lie in the intersection between the politicaleconomy of development and human rights and citizenship, and she has

a particular interest in advocacy by and for vulnerable communities

Asmara Klein holds a Masters in International Relations from Sciences

Po (Paris), France She is currently doing her PhD on the transparency norm in the extractive industry, taking a closer look at the ExtractiveIndustries Transparency Initiative (EITI) and its implementation in Cameroon Her thesis on the NGO coalition ‘Publish What You Pay’ (PWYP) was published in 2010

Andrew Lawrence obtained his PhD in comparative political economy

and political theory at the City University of New York Graduate Center

in 2003 Since then, he has taught at the Woodrow Wilson Department

of Politics at the University of Virginia, and the School of Social and

Political Science at the University of Edinburgh, where he also served asPostgraduate Advisor for African Studies At present, he is Research Fellow

at the Vienna School of International Studies, where he is completing

a book on global governance His major areas of research lie at theinterstices of international relations, comparative politics and politicaleconomy He has written several articles and chapters on comparativelabour movements, the comparative political economy of extraction

and democratisation processes, for the journals Comparative Politics , Journal of Development Studies and New Political Science, among others;

he also contributes to a blog at the Social Science Research Council – http://forums.ssrc.org/african-futures/about/ His book on worker and employer collective action in Germany, South Africa and the United States will appear in collaboration with Cambridge University Press in

2013

Rajiv Maherr has a degree in Tourism Management from Leeds

Metropolitan University UK, a masters in Human Settlements and the Environment from the Pontificia Universidad Católica de Chile and an MSc in Research Methods from Cranfield University, UK He is currently

a doctoral student in the Doughty Centre for Corporate Responsibility,Cranfield University, UK His research focuses on community posi-tions and perceptions in relation to neighbouring mining operations inChile and Brazil, and is based principally on social movement theory

In his previous research work, Rajiv focused on CSR and Corporate Accountability in relation to Chile’s largest firms He continued to work on these themes as a consultant with the World Bank Group’sInternational Finance Corporation (IFC) and Vincular CSR Centre,Chile

Jewellord Nem Singh is Lecturer in Development in the Department

of Geography at the University of Sheffield, and prior to this ment, was Post-Doctoral Research Assistant in the Sheffield Institutefor International Development (SIID) His main research examines the global governance of natural resources, pathways of resource-baseddevelopment and labour movements and citizenship struggles in mineral-based societies His empirical concentration is in Latin America

appoint-and Southeast Asia Articles have appeared in New Political Economy, y Third World Quarterly and y Journal of Developing Societies He is currently completing a typescript provisionally titled ‘New Developmentalism and Resource Politics in Left-led Latin America: Brazil and Chile in Comparative Perspectives’

Shortly after the turn of the twenty-first century, the world found itself

in the midst of a remarkable resource commodity boom: investmentsand terms of trade in extractive industries were at record levels The voracious demand for natural resources of emerging powers, most notably China and India, as a result of their sustained economicgrowth has kept commodity prices buoyant The boom of 2003 is unlike any previous resource booms that have occurred since theend of World War II The boom of 1950–1960s rested on the massiveindustry build-up in response to the Korean War and did not endure past the next cycle of economic downturn Likewise, the 1973–1974 oilboom which was fuelled by widespread harvest failures, the collapse

of the Bretton Woods currency system and OPEC’s market ment, tripling the price of oil, reached its nadir as the world economy entered a protracted era of recession (Radetzki, 2006) The 2003 boomhas proven more durable Investments continue to pour into resource-rich countries, especially those of the Global South owning significantuntapped mineral, oil and hydrocarbon reserves What is all the more striking is that the 2008 global financial crisis has hardly slowed downthe rate of growth and foreign investment in resource-rich states Theexpansion of the sector did not collapse in the face of economic slow-down as seen with earlier booms, and the immediate return of soaring commodity prices in 2010 has led some commentators to claim that this resource boom is far from its end.1 The unprecedented nature of this current resource sector expansion certainly invites us to recastdebates on the politics of natural resources and rethink how we under-stand the contemporary nexus of neoliberalism, resource extractionand development in the Global South

Introduction: Resource

Governance at a Time of Plenty

Jewellord Nem Singh and France Bourgouin

In looking at the expansion of the resource sector over the past decades, and especially the opening of resource extraction in LatinAmerica and Africa, the conventional argument goes that in the context

of development, natural resources tend to hinder, rather than promote economic growth The phenomenon, which has been overly generalisedgiven the breadth of low- and middle-income countries discussed, hasbeen coined the ‘resource curse’ Accordingly, and despite some efforts

to challenge the resource-curse approach, a standardised understanding

of the politics of natural resources has emerged This is all the more

so when the logics of ‘the curse’ are taken in tandem with a eration of the hegemonic neoliberal order The resulting view that isusually maintained is that weak state capacity in the face of the powers

consid-of transnational capital and the lack consid-of diversity in the structure consid-of localeconomies both obstruct the potential for resource-led development inthe Global South Such logic leaves little room for the potential of thecurrent economic boom to foster any sort of economic development inpoor countries

But what these generalised debates thus far have neglected to explore

is how national elites throughout the Global South have responded in very different ways to the recent investment bonanza While neolib-eral ideology prevailed and regulatory reforms were pervasively imple-mented, inciting ever higher rates of foreign private investments in resource extraction, there have nevertheless been different forms of adap-tation, resistance and opposition to this hegemonic order that have not been adequately discussed The very nature of mineral and oil resources

is such that states have retained some degree of political autonomy inthe neoliberal era In Latin America, for instance, a resurgent ‘return

of the state’ in managing natural resources has taken place, whereby regional governments have begun to utilise export taxes for social redis-tribution (Grugel & Riggirozzi, 2012) Across the Andean countries andSouthern Cone, ‘resource nationalisms’ in varying forms and scope have challenged long-held views regarding resource ownership and develop-

mental spaces for Latin America to take control of their national resources

(Grugel et al forthcoming; Hogenboom, 2012a; Nem Singh, 2012a) This pattern of greater state activism through the intensive and exten-sive exploitation of natural resources for economic growth and redistri-bution has been coined as ‘neo-extractivist regimes’ (Gudynas, 2011).Similarly, many African countries have adopted neoliberal reforms andopened up their extractives sector at staggering pace, and with a notable presence of foreign multinational corporations (MNCs) Nevertheless African states retain ownership rights of the minerals, which has in fact

sparked tensions between ownership rights (maintained by states) andextraction rights (conferred to MNCs) This marked tension between privatised models of resource extraction and emerging resource nation-alism also plays out in the Asian context, where a stronger tradition of developmentalism persists throughout the region (see Hatcher, 2012; Aducci this volume) In quite different ways, neoliberalism in the Global South was mediated and resisted, and, therefore, has been implementedless neatly despite the seemingly hegemonic consensus on free-marketorthodoxy.

If we want to think about pathways upon which natural resource extraction can lead to inclusive and sustained economic development, one must recognise the complex nature of the extractive industry.Accordingly, resource politics concerns the traversing of political authority simultaneously between spheres of the public and private,

as well as between the local and the transnational Yet although the Bretton Woods Institutions (BWIs) promote a singular recipe for good governance of resources, the specific applications of (neoliberal) institu-tional frameworks in the extractive industry are, in fact, highly contex-tualised across the developing world As spaces of authority shift and power configurations change in the world economy, the opportunities and constraints on national development projects are, in equal measure, changing in different regions

It is against this backdrop that the book explores the different ways the contemporary resource boom informs our understanding of thepolitics of natural resource extraction in the Global South Since the1980s, economic reforms in strategic resource sectors across the devel-oping world have been moulded by neoliberalism Market-opening policies were pushed by international financial institutions as an alterna-tive strategy of managing debt, stagnation and lack of investments Inmany ways then, neoliberal reforms were antecedent to the boom, and,therefore, have helped to set the conditions of opportunity for resource-abundant countries to capture the benefits of massive inflows of mineralrents Equally, economic restructuring has accompanied political reforms, such as increasing demands for greater accountability and transparency

of resource management Thus while states remain the locus of power

in managing natural resources for development, pressures from aboveand below are influencing the reform agenda at the national level Inthis regard, our edited collection provides analysis of how the globalisedresource sector has been transformed not simply by the changing config-urations of state-market relations but also the transformation of resourcemanagement at different scales of governance

The new context of resource dependency in

the Global South

The specific nature and dynamics of the 2003 global resource boom make this an appropriate time to rethink our approach to understandingresource politics in the Global South today Firstly, the driving forcebehind the boom is a complex set of factors linked to structural change

in global and national economies rather than simply resulting from a demand shock In addition to strong and sustained economic growthfrom China and India, the recent boom was fuelled by the low past investment in extractive commodities in the last decade of the twen-tieth century, a weak dollar and the explosion of finance capital as away of managing investment funds from commodities (Radetzki, 2006).However, the demand shock and structural shifts alone cannot produce high and rising commodity prices; the capacity of producers to respond

to the global demands also prolonged the boom and raised the value of mineral-producing firms (Radetzki et al., 2008)

Secondly, the recent resource boom has entailed changing phies of extractive resource supply and demand Among the emergingpowers, Brazil, South Africa and Indonesia are traditionally resource-exporting states but are increasingly becoming resource-seeking atthe same time due to national ambitions of becoming new industrial powerhouses in the Global South Equally, resource-rich Russia and China – countries with a socialist past but which embraced the pathway

geogra-of market reforms – are expanding their scope geogra-of operations into newfrontiers of resource exploitation through multinational state-controlledenterprises Finally, some emerging resource-rich countries with rela-tively solid manufacturing industries that complement their resourcesectors, namely Brazil, India and Mexico, contribute to growing marketdemands for raw materials While in the past the commodity boom was

a response to demands of industrialised countries in the United Statesand Europe, as Figure I.1 demonstrates, the rebounding of commodity prices after a global financial crisis in 2008 illustrates the increasing role

of late industrialising countries, particularly Asia Pacific, in sustainingthe global push for resource expansion

Thirdly, South-South investment driven by multinational enterprises

in the Global South, measured in terms of Southern outward FDI, alsorepresents a new characteristic defining the uniqueness of the presentcommodity boom Indeed as Goldstein (2007) points out, this trendpresents a challenge to conventional understandings of multinationalenterprises and theories of economic growth Since the 1990s, there

has been a marked increase in foreign investment outflows from oping countries In the extractive sector, FDI flows from countries such

devel-as South Africa, India, China, Brazil, Mexico and Venezuela, suggests that resource-dependent countries of the South are more financiallyintegrated with one another than was believed hitherto This trend also implies that resource-rich developing countries have greater access to more sources of investment than before A new geography of resource extraction that is concentrated in the developing areas isemerging,therefore, as a result of the neoliberal reforms and commodity boom Undeniably, the export bonanza represents a new opportunity for resource-abundant countries to rethink their models of development.The task of the book, then, is to explore what resource-led development means in the context of developing countries, and consequently, toidentify the differing patterns of political authority as countries engage with boom This, inevitably, requires paying close attention to dynamics

of power relations between states, on the one hand, and international financial institutions and private capital, on the other Crucially, theauthors of the book recognise the unique features of extractive capital,which in debates about development makes it less comparable to manu-facturing, services and industrial sectors In so doing, they argue that

Figure I.1 Current resource boom

Note: Price index is 2005 = 100.

Source: WTO International Trade Statistics 2011 (adapted).

countries whose extractive resources constitute their leading sectorpossess institutional properties mediated by sector-specific dynamicsthat accompany a distinctive set of policy dilemmas

Extractive capital and economic development

Natural resource capital represents a particular type of capital Most ously, it is cyclically prone to windfall booms and busts Historically, resource commodities have been subjected to external shocks and sharp flux in commodity prices, as was seen with the severe contraction of demands for certain minerals in the wakes of the two World Wars and the Great Depression (Bulmer, 1994) With global market integration, commodity prices have increasingly become susceptible to specula-tion in the international minerals markets, which adversely affect the production processes (Webb, 1999)

obvi-From both an economic as well as a policy viewpoint, extractive resources’ relative absence of value added together with their price vola-tility on world markets make them an unreliable source of income fornational governments (Auty, 1993; Humphreys et al., 2007; Sachs &Warner, 1997, 2001) Moreover, booming resource sectors are believed

to draw capital and labour away from a country’s manufacturing and agricultural sectors, thereby raising their production costs (Ross, 2001:305) and leading to the appreciation of real exchange rates caused bythe sharp rise in commodity exports, an observation referred to as the

Dutch Disease Hence, resource-led development is considered unlikely

as booms fail to bring investments into the more stable and dynamic sectors of the economy, such as manufacturing, but instead, directinvestment and factor inputs towards the resource sector

Similarly, the open access exploitation hypothesis suggests that notonly does extraction under open access conditions generate few resource rents to be reinvested but it also leads to over-exploitation of naturalcapital in the long run, thus curbing the development potential of the resource sector For others, unfavourable environmental conditionsmay directly inhibit the efficient generation of natural resource rentsand sustainable returns through the reinvestment of rents into otherproductive assets, as well as indirectly through a long-lasting influence

on patterns of political and legal institutional development (Auty, 2001,1993; Barbier, 2005, 2003; Easterly & Levine, 2003)

The observed inability of developing states to transform resourcewealth into productive capital over past decades has become the central preoccupation of economists and political scientists alike, not

to mention of scholars of development The dominant view is that the

revenues generated from natural capital are not comparable to incomethat can be reinvested as profits Unlike in the productive sectors of the economy, windfall profits from extraction do not multiply and

as the resources upon which they are based are de facto depletable, extractive industries are unsustainable over the long run (Humphreys

et al., 2007; Karl, 2007 ) In this regard, the recent tendency of turningresource revenues into sovereign wealth funds (SWFs) that cannot bespent in the domestic economy has become the prescriptive response

of the World Bank to reduce the deleterious effects of uncertainty inthe resource sector

Crucially, this leads to a second-order question: if uncertainty in thecycles of extraction is an inherent feature of the sector, is there anypossibility for long-term government planning? For some scholars, insti-tutional endowments are the key to the success of any export-orientedgrowth strategy – the likely hypothesis used to explain the disparatepaths of resource-abundant and resource-scarce states as well as the so-called exceptionalism of some resource-rich states like Australia,Botswana, Canada, Chile, Malaysia, and Norway (Acemoglu et al., 2002;Thorpe et al., 2012) The new discovery of minerals and petroleum in

a developing country requires simultaneous state reforms to managethe sudden influx of revenues and to use resource rents strategically for economic growth Asset immobility and geographical concentration of resources allow for the development of extractive sectors without neces-sary linking extraction to production of intermediate goods (Dunning, 2008: 6; Gallo, 2008) But while econometric studies are able to estab-lish correlations between natural wealth and institutional quality – forexample, Mehlum et al.’s (2006) distinction between producer-friendly and grabber-friendly institutions to theoretically abstract rent-seeking and production – these studies offer, unfortunately, only a narrow, abstract explanation for why some countries succeed in a less determin-istic fashion

If resource management can somehow be successfully governed through a discrete set of ‘high-quality’ institutions, it should not bedevoid of the political circumstances upon which institutions arecreated and reinforced The current state of neo-institutionalist analysis

on resource politics has simply favoured the open access to resourcesfor foreign private capital – for example, through the codification of private property rights and stable (low) taxation regime – without fullyrecognising the power-laden dimensions of the reforms For example,

as the section on good governance in this volume suggests, corporate actors’ support for global initiatives aimed at revenue transparency and

macroeconomic stability represents a way for private sector to mise their role in extractive industries Furthermore, as the growing literature on resistance to mining projects illustrate, sites of resource extraction have become new spaces for contestation for social groups byway of directly disrupting multinational operations or through organ-ised protests with transnational support (Bebbington, 2012; Haarstad,2012; Sawyer & Gomez, 2012) More broadly, it demonstrates the highlysocio-political nature of resource extraction and the various modes of containing social conflicts not only between companies and communi-ties but also between states and companies

legiti-What is overlooked in the literature is the nature of the latent tionship between resource governance and neoliberalism The principal challenge for resource-rich developing states today rests not only in grafting institutional reforms that address problems of resource depend-ency but also the associated costs of economic liberalisation Put simply,the chronic failure for developing countries to push for sustained economic growth cannot be attributed fully to resource dependency;instead, political economy and institutional factors shape developmentoutcomes, and resource-rich states are not exceptions here (Barbier,2011; Di John, 2009 ; Rosser, 2006a) While formal institutions certainlymatter, it remains highly questionable whether policy changes to address the challenges posed by the inherent nature of extractive capital can alter myopic decision-making and clientelist politics that are bothcause and consequence of rent-seeking, bureaucratic inefficiencies, andweak state capacity Development policy-making is, after all, a complex, messy enterprise that is usually a product of trial and error rather than sound policy foresight (Haggard, 1990) However, developmental chal-lenges are found not only at the national level States must also respond

rela-to the changing global political economy As the rate of mergers and acquisitions increases in extractive sectors (Campbell, 2009), resource-rich countries are faced with the challenge of negotiating developmental spaces with private capital in an oligopolistic world market for resources.Indeed, the processes by which, prior to the commodity boom, global governance institutions and states sought to reform the resource sector

in the South reveal the ways in which sector-specific characteristicsmediate the impacts of neoliberal reform agendas in the wider devel-oping world This certainly calls for a more robust account of the inter-actions between resource management and neoliberalism

Neoliberalism in the resource sector

While the ‘logic of neoliberalism’ is frequently elevated to the centraldynamic of the contemporary global economy, its power is muted, this

book suggests, and refracted through the specific constellations of national and domestic forces as organised in the natural resource sector

inter-As a starting point, resource management in the developing world is intertwined with the changing face of neoliberalism Now, it is impor-tant to note, there had already been two phases of neoliberal reform

in the Global South prior to the 2003 commodity boom In the first,neoliberalism was conceived as a debt management strategy that effec-tively discredited the state-led model of development in the aftermath

of the 1982 debt crisis Then, by the 1990s, a second wave of complexreforms in the economy was being introduced, in which privatisation of public services and trade liberalisation became the battlecry of reformers

in Latin America (Naím, 1994) Although the timing of market reformsvaries across Africa and Asia, we can nonetheless still talk about a global shift from state-led economic governance towards ‘deep marketisation’ across the Global South (Campbell, 2009; Carroll, 2010; Harrison, 2010;Soederberg et al., 2006)

In this context, neoliberalism entered the realm of policy-making as a package that required, above all, restructuring the developmental roles

of states even in sectors deemed historically strategic for national trial development By the time the resource boom took off in 2003,the wave of neoliberal market reforms throughout the world was well established as the prevailing paradigm of development In this sense,the conditions were in place to allow countries of the South to accom-modate the resource boom Market-opening reforms introduced in the 1980s were aimed at extracting and processing natural resources both through state-led and private-oriented means of commodity produc-tion In the literature, the consequences of neoliberalism in resource extraction are inferred as follows: (1) the adoption of a taxation regimecharacterised by low taxes but also shift towards a wider tax base that eventually moves beyond resource sector; (2) a guarantee for firms of their rights to lease and develop mineral blocs without state interfer-ence through a tight concession grants contract; and (3) some credibleindication of state commitments to reduce if not completely reverse theeffects of nationalisation of resources, all in the name of competitive-ness in the globalised extractive industry (Campbell, 2009; Rendfew,2011; Sánchez et al., 2001; WIR, 2007)

indus-At the core of the reforms is the belief that private capital is the newsource of economic dynamism through foreign direct investments(FDI), technological/knowledge transfer and sophisticated techniques in managing environmental and social costs (Eden 1991) There was widescepticism on the ability of national states to bring back dynamism in the resource extractive sector, particularly because of the heavy sunk

costs associated with prolonged periods of investment in mining ration and development Importantly, the broader shift from public

explo-to private forms of extraction have been accompanied by a process of internalisation of global norms, which has become a reality through the flexible local adaptation – of EITI process, for instance – as well as stateintervention to subscribe to new norms of good governance In turn, the socialisation of states into norms set by global governance institu-

tions and corporate players has produced a process of depoliticisation ;

issues such as resource ownership, cultural recognition of marginalised groups and a new politics of redistribution in extractive governanceare deeply political but have been excluded in mining policy agendas

in several developing countries In short, neoliberalism not only alterspolicy paradigms, but also socialises, in equal measure, actors to acceptthe rationality of markets – and concomitantly the practices to embed marketisation – that limit resource governance along narrow ques-tions of growth and productivism (see Barton et al., this volume for theChilean example)

While the resource sector has been reformed to conform to thegeneral logic of private sector-driven growth in similar ways as theother sectors of the economy – thus the claim of the centrality of neoliberalism as an organising logic of state-market relations – some have criticised the unproblematic view on policy convergence towards neoliberalism (Bell, 2005; Bruff & Horn, 2012; Ebenau , 2012 ; Schmidt,2009; Taylor, 2010) The uneven ways in which these reforms havebeen adopted by state elites raises the question of whether a discern-able standard account of neoliberal orthodoxy for the resource sectorstill exists On the one hand, market reforms have sought to reduce the scope and reach of state intervention throughout the economy, including resource extraction On the other, the state has not fullyrelinquished its interference in the sector in many pockets of theextractive frontiers For example, royalty taxes remained in place despite the World Bank’s insistence, at least in principle, on treatingthe resource sector in no way less favourably than the manufacturingand industrial sectors (Otto et al., 2006) Similarly, the threat of rena-tionalisation has not dissipated, even in Africa, where weak states have been perceived to succumb to the influence of donor agency-led neoliberal reforms (Khan & Gray, 2006; Therkildsen & Bourgouin,2001) In other countries, most notably in Brazil, Chile and Malaysia,state enterprises were retained while foreign capital was invited to enter the resource markets In sum, there is a tension inherent to theresource sector arising from some form of persisting state ownership

and neoliberal governance style of managing extractive industries This is, of course, directly in line with the generally acknowledged point regarding the particularity of natural resources in generating a contentious relationship between national states and foreign capital(Bergquist, 1986 ; Cardoso & Faletto, 1979).

Given the contested implementation of neoliberalism in the resource sector, it is unsurprising that resource-rich states have begun to findalternative institutional arrangements towards multinational firms inresponse to the commodity boom This includes, above all, the quest for

an equitable way of sharing revenues between the host country and theinvestors as well as finding new strategies of transforming resource rentsinto productive capital Unlike previous booms, wherein states werenot subject to accountability standards, global governance institutionshave been working with corporate players in shaping the policy choices

of host countries in order to realise the developmental role of natural capital However, as chapters in Part II of this volume demonstrate, the good will approach of international institutions and private actors canactually become an obstacle to this endeavour

The debate ultimately boils down to the question of policyautonomy in an era of uncertainty and global market integration.While discourses of resource nationalism generate strong domesticpublic support, the reality is that commodity suppliers in the devel-oping world have very little control over their exports Not only arethere very few price makers in the global resource economy, the ideo-logical dominance of neoliberalism means that national governmentsfrequently refrain from exercising their potential market power at the global level As a case in point, Chile which produces 35 per cent of global copper supply has not used the weight of its global market share

to resolve crises of overproduction and low prices In fact, it was only

in 1999 when the two biggest copper producers CODELCO and MineraEscondida jointly decided to limit the global supply that copper prices began to recover (Nem Singh, 2012a) Hence, resource managementcannot be systematically divorced from neoliberal economic govern-ance Although increasingly scholars are discussing the extent to which we can speak about post–Washington Consensus paradigm and its promise of economic growth (Rodrik, 2006, 2011; Saad Filho,2010; Stiglitz & Greenwald, 2003), it is crucial to identify the patterns

of continuity and change in resource policy reforms during the high tide of neoliberalism and through its relative decline after 2000 This requires paying close attention to the exercise of political agency in the context of neoliberal hegemony

The plan of the book

The recent rapid expansion of raw materials extraction in the Global Southhas been principally driven by the changing global patterns of economicproduction and the shift of economic demands from traditional Westerncountries to Asia Pacific (Bridge, 2004; Radetzki, 2006) Consequently, transport costs fell and trade barriers were brought down as host resourcestates developed strategies of adaptation to the global economy by way

of embracing market-opening reforms In turn, the resulting pattern of global integration of commodity markets has ensured access to raw mate-rials, energy and mineral products, securing in turn the industrial expan-sion and growth of emerging powers This has theoretical implications

to development theory From the perspective of resource-seeking states, resource wealth is a necessary but insufficient condition for industrialdevelopment There is no longer any linear relationship between owner-ship of point resources and economic growth (Barbier, 2011) As the EastAsian experience vividly illustrates, resource-poor states can still achievesustained economic growth (Auty, 1993, 2001) The access of resources through international trade has sustained the growth of contemporary industrial economies Contrary to conventional literature on resourcewealth, evidence from the BRIC and Middle Eastern countries shows that resource-abundance in itself does not have to retard economic develop-ment Thus, resource-abundance and resource-dependence do not in themselves explain the disappointing results in terms of poverty allevia-tion of extraction in resource-rich developing countries

In terms of national development strategies, the current resource boom necessitates a particular adaptation strategy On the one hand,resource-abundant poor countries are losing comparative advantage in labour-intensive manufacturing and are now locked in utilising their natural resources for devising wealth accumulation policies But this cannot take place without reforms to the regulatory and institutionalframeworks guiding the extractive processes (Campbell, 2009) Onthe other hand, the depoliticised good governance reforms offered to resource-rich states by international actors do not adequately provide holistic and contextual understandings of nationally defined policy dilemmas As Bourgouin and Haarstad (this volume) argue, prescriptiveideal-type theories (and policy responses) of resource governance over-look the conflict-driven nature of resource extraction as well as the long-term realities of extractive economies

In this volume, we do not attempt to offer a coherent framework to analyse natural resource politics in the context of the recent commodity

boom Rather, the succeeding chapters propose different approaches for

understanding how states and national elites respond to the porary investment bonanza in the broader context of neoliberalglobalisation In so doing, the contributors draw from critical politicaleconomy traditions in analysing their respective problematiques, some also complementing with sociological and anthropological approaches

contem-By associating this collection with critical IPE, we do not necessarily embrace the abstract discussions of states and markets at the systemiclevel, nor do we follow a specific intellectual tradition (Polanyi,Polantzas, etc.) that is characteristic of the critical IPE approach We

do, however, endeavour to explain various facets of natural resourcepolitics – most especially themes on global governance, state strategies and political economy of development – from a perspective that goesbeyond the ‘problem-solving’ tendency of mainstream theories (Cox,

1981 ) Theoretically, we move beyond the resource-curse approach to understand complex issues on the political economy of developmentamong resource-rich states Our thematic issues explore questions about state-market configurations, citizenship and democratisation, as well asdevelopmentalism in the construction of extractive political orders – all

of which implicitly challenge the economistic logic of resource ment that is predominant among global governance institutions andpolicy literature

manage-More specifically, the book is divided into three main sections that together engage in the debates on resource governance from an IPE perspective Part I of the collection offers a critical engagement with the scholarly literature that addresses issues of resource wealth and develop-ment and maps the range of analytical tools to understand state attempts

at governing natural resources The first chapter by Nem Singh and Bourgouin opens the discussion by contextualising the contributions

of various theoretical strands on resource politics and exploring theirlimited applicability in the context of neoliberal reforms and the recentcommodity boom Their chapter suggests looking at the resource wealth-development nexus through the lenses of critical political economy,whereby resource politics is understood in the context of the neoliberalproject as well as the processes of shifting layers of public and privateauthority in resource governance This is followed by Andrew Lawrence’s instructive analysis of developmental states and neoliberal ideology inthe context of South Africa In Chapter 2, he explores the promise and the challenges of a stronger developmentalist state in managing the globalisation of resource extraction Specifically, Lawrence argues thatthe introduction of greater regulation on the market does not mean the

end of neoliberalism; in fact, it is likely that the logic of neoliberalism

is compatible with activist states in order to manage the externalitiesand costs of extraction In Chapter 3, Nem Singh and Grugel address the failure of resource politics literature to engage critically with the mutually reinforcing dynamics of democratisation and neoliberalism in resource-rich countries The chapter offers a politicised view of resource governance, wherein citizenship struggles and demands from beloware taken into account in explaining the challenges posed to neoliberal styles of resource management Drawing upon the experiences of Latin American countries, the authors show that a new politics of redistribu-tion, recognition and representation has emerged as commodity boomseased the limitations imposed by neoliberal models of growth Put differently, the export bonanza has had an unintended effect of raisingpopular expectations from social movements and civil society organisa-tions regarding the potent use of resource rents for inclusive growth andsocial redistribution While states design top-down strategies of resourceexploitation as a strategy of development, social groups have begun

to reclaim their spaces of autonomy to assert voice, agency and ance to the marketisation of social life In other cases, as in places withrelatively fragmented civil society organisations, mobilisation involves claims-making in the mines and in enclave spaces, which mean thatdemands are confined to workplace issues rather than highly politicisednational debates on ownership and rights Nevertheless, these different claims are reflective of discontentment to existing policy practices of resource management as a technocratic exercise; contestations against resource exploitation move political decision-making away from the terrain of politicians and bureaucrats towards one where citizens andsocial movements can reclaim voice and agency in defining the trajec-tory of development This is perhaps most emblematic in extractivezones where highly mobilised indigenous communities challenge top-down strategies of national governments to impose a particular model (and definition) of development

resist-Our critical discussion of resource politics beyond the curse approaches is taken further by the chapters presented in Part II,which focus on notions of good governance and contested meaningsfor ‘resource management’ In Chapter 4, Bourgouin and Haarstad examine the way international policy-makers have internalised the

resource-‘resource curse’ to justify a depoliticised, managerial approach to what

is considered to be poor resource governance in Asia, Africa and LatinAmerica; developing countries which depend inordinately on resource wealth have been characterised as countries with internal dysfunctional

processes which can be remedied through improved ‘governance ards’ monitored with indices The authors explore how good governance initiatives aimed at transparency and governmental accountability – most exemplary the EITI and Natural Resource Charter – come with the pretence that their recommendation for technical reforms in govern-ance can remedy the natural resource curse In contrast, they posit for

stand-a more contextustand-al underststand-anding of politicstand-al-economic processes thstand-atunderpin extractive governance, and one that takes into account how

‘good governance’ standards are transformed and adapted by national institutions within local contexts

Similarly, Asmara Klein and Ana Carolina Gonzalez Espinosa strate in Chapter 5, the incongruence between normative claims of global standards and actual policy practices on the ground The authors suggest that by applying good governance norms across resource-rich states in a blanket fashion, global initiatives like EITI neglect the context,history and power relations in the process of appropriating standards of how best to manage resource rents Their analysis reveals how globalgovernance institutions define a politically contestable governance agenda while corporate lobby groups and international civil society, inturn, deploy tactics to legitimate claims of accounting and transparency Together, the two empirical chapters on good governance demystify the apolitical nature of administrative reforms in resource extractive sectors These chapters not only problematise commonly held views regardingthe logic of technocracy in managing natural resources to achieve devel-opment but also open up debates on power struggles in framing and bringing global initiatives down to the national and local spaces of authority This, inevitably, feeds into the arguments set in Chapter 1 regarding the concurrent shifts on the locus of power and authority interms of scale rather than simply a move from public to private forms

demon-of extraction

The third section of the book presents three national experiences of neoliberalism in managing the resource sectors In Chapter 6, JonathanBarton, Cecilia Campero and Rajiv Maher discuss the so-called Janus face of mineral-led development model in a country typically classified

as ‘exceptional’ On the one hand, Chile is hailed as a success story of resource-based growth, particularly if one looks at aggregate economicdata on growth, poverty and human capital formation On the otherhand, landscapes are characterised by environmental degradation, erosion of substantive rights of affected communities and uneven development especially at the local and regional levels While Chilean mining policy yields to growth despite resource dependency, there

exists a persistent pattern of regional inequalities as well as mental and social costs of mineral extraction Hence, although neolib-eralism was never easily implemented perhaps especially so in Chile,the different facets of ‘resource curse’ have disproportionately distrib-uted the ‘externalities’ of mining-based development Similarly, OlgaLucia Castillo-Ospina in Chapter 7 analyses the recent developments

environ-in the energy and menviron-inenviron-ing sectors of Colombia and its consequences

to the environment The chapter specifically argues that the patibility between sustainable development and economic imperatives

incom-is reflected in natural resource exports promotion, whereby mental responsibilities are abrogated by the Colombian state and are,

environ-in fact, transferred to the hands of foreign environ-investors The environ-inherent contradictions between extraction and environmentalism have offered

a strong basis for resistance politics against contemporary attempts by the Colombian state to deepen the exploitation of resource extraction

in the name of development This argument resonates strongly the claims made by Nem Singh and Grugel in Chapter 3 on the growingimportance of citizenship struggles and challenges from below to top-down projects of resource-based development in the Global South.While Chile has been successful in managing demands from socialgroups, Castillo-Ospina suggests Colombia as a typical example of

a lack of consensus on development projects based on intensifying resource exploitation The rise of citizenship claims and opposition to extractivism in fact rests on the failures of neoliberalism to generategrowth and reduce poverty (as opposed to Chile’s record) Finally, Aducci reflects on the same contradictions explored by Castillo-Ospina regarding the sustainability-extraction paradox, this time in the context

of India and its principal mining state, Odisha She discusses the iably contentious relationship between growth strategies and envi-ronmental management as the drive to increase production capacitypushes states like Odisha to respond to the ‘national development needs’ of India Like Barton et al., she shows how uneven develop-ment has taken place in Odisha as a result of the concrete power rela-tions between states, on the one hand, and national and multinationalcapital, on the other hand Her chapter suggests the same dynamics as the other two cases, whereby neoliberalism was designed and imple-mented but was not quite neatly applied as national contexts, institu-tional dynamics and domestic configurations of social forces mediatethe process of market opening Across the three case studies, what isevident is that the coherence of neoliberalism as a hegemonic ideology and as a ‘logic of capitalist accumulation’ is challenged in profoundly

invar-different ways On the one hand, sector-specific features and the tegic nature of the industries hinder the complete withdrawal of thestate in the extractive sector This, above all, points to the potential toconstruct more inclusive extractive orders based on greater state partic-ipation in the national economy On the other hand, it is certainly the case that citizenship rights and resistance from communities havealtered the technocratic logic of mining reforms While neoliberalismseeks to depoliticise what are intrinsically political issues of resourceownership and sectoral management, the rising tide of demands to make mining and oil contribute to development is compelling national elites to make nuanced relationships with the market

stra-These discussions, then, are brought together by Bourgouin, Lawrence and Nem Singh in Chapter 9 as the authors trace the changing patterns

of state-market relations and the shifts in political authority in the globalgovernance of natural resources In this final chapter, they offer a criticalappraisal of what it means to go beyond the resource-curse approach

in explaining the multiple pathways of resource-based development.Just as there is no singular recipe for development and there exists nolinear application of neoliberalism, there are multiple pathways in trans-forming the resource sector into the new engine of development that is inclusive, democratic and more equitable The final chapter, therefore,serves as an invitation to further discuss rather than offer a definitive conclusion regarding the complex nature of resource management at different levels

In the context of the boom, states can – and some have – exercised greater autonomy in managing their resource rents as leverage to forgealternative policy ideas In Latin America, some have begun to speak about ‘new developmentism’, characterised mainly by stronger, more flexible states that manage resource exploitation and respond to social redistributive pressures through social equality agenda But equally, the commodity boom has allowed social movements and civil societyactors to demand greater inclusion in political decision-making apartfrom compelling elites to discuss social inequality and redistribution inmainstream political debates What precisely new developmentalism means and constitutes is a matter of debate Nevertheless, we are clearly observing a new politics of resource extraction, where traditional lenses

on rentier politics and resource curse only offer partial explanations

to the rising expectations on the contribution of resource wealth to economic growth, social redistribution and democratic decision-making In the following chapters, the contributors aim to critically shed light on the complexity of different ‘governance problems’, which

are embedded in the twin discourses of neoliberalism and curse politics

Note

1 Reuters (2012) ‘The Commodity Boom isn’t Dead, just Resting’, 24 August 2012 accessed on 1 September 2012 athttp://www.reuters.com/article/2012/08/24/us-column-russell-commodity-boom-idUSBRE87N06L20120824

Part 1

Theoretical Debates in Natural Resource Politics

1

States and Markets in

the Context of a Resource Boom: Engaging with Critical IPE

Jewellord Nem Singh and France Bourgouin

The study of natural resources and economic development – and the lack of adequate analytical tools devised to explore its ever-changing complexity – reflects the broader crisis in development theory Crucially, development theory around resource exploitation in poorcountries has never fully analysed the constraints of the global polit-ical economy While neoliberalism is considered as a critical juncture

in the reorganisation of states and markets in the developing world, the decline of political economy considerations in developmentstudies has been nevertheless documented (Leys, 1996; Manzo, 1991;Nederveen Pieterse, 2010) 1 As a result, development politics is illadapted for explaining – and understanding – the opportunities andchallenges for resource-led development associated with the currentresource boom

In this chapter, we highlight the relevance of political economy perspectives in the analysis of contemporary resource politics in the Global South We put forward an argument in favour of a political economy perspective in exploring the resource politics-developmentnexus in the context of neoliberalism To this end, we map out in historical terms and discuss the different ways in which scholars have intellectually theorised the relationship between natural resources andeconomic development, following Robert Cox’s (1981) argument thattheory and praxis are inseparable Critical theory, one that reveals theintricate relationship between theory building and social reality, isnecessary to understand the depoliticised nature of resource governanceliterature In contrast to ‘problem-solving’ tendency of social theories

(Cox, 1981), which is also dominant in the resource management ture, the chapter seeks to open up new approaches by exploring howtools from the critical IPE approach can elucidate the complexity of a globalising resource sector

litera-We begin the chapter with a discussion of the strengths and tations of early systemic approaches applied to the natural resources-economic growth nexus developed between 1950s and 1980s, namely world systems and global commodity chains theories, wherein we high-light their key insights to understandings of resource politics This isfollowed by a discussion of the current resource governance literaturethat responds to the increased attention to political development in theGlobal South and thus this chapter broadly seeks to provide a policy-rel-evant analysis of resource wealth and economic development However,after demonstrating the limitations of these literatures in capturing thecomplexity of resource politics in the Global South, we draw in the third section, from political economy traditions to explore the global resource governance and state strategies of managing the globalisation of extrac-tive resources We show how political economy understandings shedlight on the global-national dynamics of political authority and the fluidity of the public-private and national-international divides contex-tualised within the international resource industry Finally, we close thechapter by analysing the implications of a political economy perspective

limi-to development theories

Resource exploitation from systemic perspectives

The role of natural resources in development has been a central cupation of political economy both from dependency and non-Marxistperspectives (Cardoso and Faletto, 1979; Furtado, 1970; Prebisch, 1950; Singer, 1950); natural wealth was perceived as part of depletable capital that forms concrete social relations between states, markets, and labour.Prior to the dependency and world systems theories (WSTs) in the 1960s,natural resource exploitation was seen as a plausible route to economic development Indeed, the consolidation of export-led growth models principally applied in Latin America between 1880s and 1920s wasinspired by the belief on the potential of creating linkages between theresource sector and frontier activities on the one hand, and the produc-tive sectors of the economy, especially manufacturing, on the other hand As Edward Barbier (2011: 18) notes, the rise of the United States

preoc-as the leading mineral economy and world leader in manufacturingbetween 1879 and 1940 established more firmly the idea that resources