The Paradox of Plenty: Oil Booms
and Petro-States (Studies in
International Political Economy) by
Terry Lynn Karl
I'm A Karlista
Political scientist Terry Lynn Karl explains why in the midst of two massive
oil booms in the 1970s, oil-exporting governments as different as
Venezuela, Iran, Nigeria, Algeria, and Indonesia chose common
development paths and suffered similarly disappointing outcomes. Karl
contends that oil countries, while seemingly disparate, are characterized
by similar social classes and patterns of collective action.
Personal Review: The Paradox of Plenty: Oil Booms and Petro-
States (Studies in International Political Economy) by Terry Lynn
Karl
After spending 3 months in Venezuela studying the oil industry and the
political economy of the country, I finally picked up Karl's 1997 book. It was

as if it had been written in in 2007. It gives any watcher of Venezuela a
contextual fabric to understand today's Venezuela.
For Venezuela, the western consumption-led, oil-development model has
cursed it to high urbanization, hyperinflation, inefficient heavy industries,
an elitist and clientelistic labour movement, executive centralization, fiscal
black holes and dependency on foreign capital and technology. These
trends continue today under the Chavez government.
To break the cycle, Venezuela must invest the oil money outside the
country, spur the development of agriculture, and broaden the tax base
with increased income tax. These three factors would have a cascading
effect to diversify the economy, increase accountability, broaden the labour
movement, reduce urbanization, decrease inflation and ultimately make
Venezuela more than an oil jockey filling up its rich neighbour's Hummer.
With all the oil left in the country, maybe they will get it right the next time,
but based on Karl's analysis probably not.
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