The Sovereign Entrepreneur

Book excerpt: Capitalist governments around the world, however strongly they profess free market principles, have become deeply involved in the international market for petroleum. What success have they had as oil entrepreneurs, and what do their achievements and failures tell us about the nature of the state? In The Sovereign Entrepreneur, Merrie Gilbert Klapp develops a compelling comparative logic of state oil entrepreneurship. Drawing upon dozens of interviews with policymakers and company executives in Norway, Britain, Indonesia, and Malaysia, Klapp addresses a little understood determinant of policy—the pivotal bargaining power that domestic and international interests wield in different countries. Advanced capitalist countries, she finds, have generally not achieved their goals in the oil sector; they have been constrained by powerful, well-organized domestic interests. Less developed countries, by contrast, have faced little opposition at home, but the international banks and the multinationals have severely limited their attempts to expand into the global petroleum market. klapp argues that bureaucratic and domestic politics, not just economics, underlie the varying success of different countries in the marketplace.