Foreign Investment and Political Regimes: The Oil Sector in Azerbaijan, Russia, and Norway

Foreign Investment and Political Regimes: The Oil Sector in Azerbaijan, Russia, and Norway

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Oksan Bayulgen
Cambridge University Press, 2010-01-29
EAN 9780521425889, ISBN10: 0521425883

Hardcover, 290 pages, 23.1 x 22.8 x 15.2 cm

Drawing on three in-depth case studies of oil-rich countries and statistical analyses of 132 countries over three decades, Bayulgen demonstrates that the link between democratization and FDI is nonlinear. Both authoritarian regimes and consolidated democracies have institutional capabilities that, though different, are attractive to foreign investors. Democracies can provide long-term stability, and authoritarian regimes can offer considerable flexibility. The regimes that have started on the road to democracy, but have not yet completed it, tend to have political institutions that provide neither flexibility nor stability. These hybrid regimes, then, also find it relatively more difficult to construct a policy environment that is attractive to foreign investments. These findings have deep implications for the link between democratization and globalization, but also how globalization may affect political, social, and economic development.

'Oksan Bayulgen has written an original and provocative study concerning what makes some investment environments more attractive than others for foreign oil companies. In doing so, she contests the conventional wisdom that oil profits make foreign oil companies impervious to risk and that foreign investors necessarily prefer authoritarian regimes. She argues that foreign investors prefer investment environments that are stable and flexible, neither of which is contingent on regime type. Her focus on Azerbaijan and Russia makes this book an important read for students not only of political economy but also of the postcommunist world.' Pauline Jones Luong, Brown University