Oil and International Cooperation

The more that states depend on oil exports, the less cooperative they become: they grow less likely to join intergovernmental organizations, to accept the compulsory jurisdiction of international judicial bodies, and to agree to binding arbitration for investment disputes. This pattern is robust to the use of country and year fixed effects, to alternative measures of the key variables, and to the exclusion of all countries in the Middle East. To explain this pattern, we consider the economic incentives that foster participation in international institutions: the desire to attract foreign investment and to gain access to foreign markets. Oil-exporting states, we argue, find it relatively easy to achieve these aims without making costly commitments to international institutions. In other words, natural resource wealth liberates states from the economic pressures that would otherwise drive them toward cooperation.