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Explaining hydrocarbon nationalization in Latin America: Economics andpolitical ideologyRuben Berriosa; Andrae Marakb; Scott Morgensternc

a Department of Economics, History and Political Science, Lock Haven University of Pennsylvania,Lock Haven, PA, US b Department of History and Political Science, California University ofPennsylvania, California, PA, US c Department of Political Science, University of Pittsburgh,Pittsburgh, PA, US

First published on: 19 October 2010

To cite this Article Berrios, Ruben , Marak, Andrae and Morgenstern, Scott(2010) 'Explaining hydrocarbon nationalizationin Latin America: Economics and political ideology', Review of International Political Economy,, First published on: 19October 2010 (iFirst)To link to this Article: DOI: 10.1080/09692290.2010.493733URL: http://dx.doi.org/10.1080/09692290.2010.493733

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Review of International Political Economy 2010, iFirst: 1–25

Explaining hydrocarbon nationalizationin Latin America:

Economics and political ideology

Ruben Berriosa, Andrae Marakb

and Scott Morgensternc

aDepartment of Economics, History and Political Science, Lock HavenUniversity of Pennsylvania, Lock Haven, PA, US; bDepartment of History andPolitical Science, California University of Pennsylvania, California, PA, US;

cDepartment of Political Science, University of Pittsburgh, Pittsburgh, PA, US

ABSTRACT

Recent hydrocarbon nationalizations in Bolivia, Venezuela, and Ecuadorhave renewed debates about the dangers of radicals, populists, or leftists.But, while some of these presidents have acted aggressively towards multi-national owners, as a group their policies have not differed greatly fromnon-leftists facing similar circumstances. To test our hypothesis, we pro-vide a detailed three-variable coding of every Mexican and South Americanpresident (for all countries with oil resources), as well as a coding of theirpolicies towards the hydrocarbons industry. The historical review shows thatpolitical leaders from all sides of the ideological spectrum have advocated,pursued, or sustained nationalizations, and thus there is no clear relationbetween these political labels and nationalization policies. An examinationof two alternative hypotheses – timing and starting point – finds that whilenationalizations and privatizations do come in bunches, the hydrocarbonpolicy and economic circumstances that presidents inherit are more likely todetermine the policy that they pursue.

KEYWORDS

Latin America; oil; gas; hydrocarbons; nationalization; populism; petroleum.

In the summer of 2005, Bolivia’s interim president, Carlos Mesa, faced mo-bilized and inconsolable masses demanding nationalization of the coun-try’s gas industry to redress decades of exploitation and poverty. Thedemonstrators blocked the roads into La Paz, denying entry or exit forpeople and goods, even threatening the supply of water and cooking oil.

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REVIEW OF INTERNATIONAL POLITICAL ECONOMY

Vendors handed out pamphlets proposing new nationalization policies.Before long, Mesa resigned and the leader of the movement, Evo Morales,was elected president. One hundred days after taking office he acted onhis mandate, sending troops to take over the gas fields. His nationalizationprogram, however, turned out to be more rhetoric than reality. His plandid not include expropriation of private assets; instead “nationalization”came to mean the purchase of a majority share in the interests of the multi-national firms and an increase in taxes. Further, when the state found ithad insufficient funds for the purchase of the necessary stocks, that planwas largely abandoned, leaving nationalization to imply a simple (thoughsignificant) increase in taxes on the companies.1

Still, recent nationalizations in Bolivia, Venezuela, and Ecuador have re-newed debates among academics, entrepreneurs, and policymakers aboutthe threats of radicals, populists, or leftists to economic stability (e.g.Dornbush and Edwards, 1991). Amidst this debate has emerged the ideaof two types of leftist politicians. In an influential Foreign Affairs article,former Mexican Foreign Minister Jorge Castaneda claims: “One is mod-ern, open-minded, reformist, and internationalist . . . The other, born ofthe great tradition in Latin American populism, is nationalist, strident,and close-minded” (Castaneda, 2006).2

This dichotomy is problematic. While some of history’s supposed“closed-minded leftists,” “radicals,” or “populists,” have sometimes actedaggressively towards the multinational owners of the hydrocarbons in-dustries, their policies have not differed greatly from other presidentialtypes. First, like Morales, many leftist presidents’ actions suggest more ofa propensity to negotiate rather than to expropriate. Second and more im-portantly, our empirical investigation shows that political leaders from allsides of the ideological spectrum have advocated, pursued, or sustainednationalization. Presidential type, then, is a poor predictor of nationaliza-tion policy.

We support this assertion through a detailed coding of every Mexicanand South American president (for all countries with oil resources) andtheir policies towards gas and oil industries over the past century. Mining,telecommunications, and other industries have also been central to manycountries (leading us to discuss the Chilean copper industry), but we focuson hydrocarbons because, as the recent controversies show, it has been theindustry most symbolic of foreign domination across the region.

The analysis shows that political leaders have used the term “nation-alization” to describe policies that range from expropriation of privateforeign-owned firms without compensation to a simple renegotiationof contracts with international investors. Our theoretical goal is to testwhether “leftists” or “populists” show a propensity toward nationalizingtheir hydrocarbon industries. We address this concern by delineating therange of nationalization policies, and operationalizing different aspects of

2


BERRIOS ET AL.: EXPLAINING OIL NATIONALIZATION

populism and leftism, namely the presidents’ class-based support, theirposition with regard to the role of the state in the economy, and their fealtyto elections and extant political institutions. We show that there is no clearrelation between these political labels and nationalization policies.

After demonstrating that neither populism nor ideology explains hydro-carbon policy choices, we briefly examine two alternative explanations fornationalization policies: timing and starting point. The timing hypothesisasks whether ideology is subsumed by general regional trends (national-izations with the 1960s and 1970s and privatizations with the 1980s, forexample). While we do find some evidence that nationalizations and pri-vatizations come in bunches, the most common policy choice (regardlessof the ideology of the governing party) is the status quo. The starting pointhypothesis is more promising. Our evidence suggests that economic con-siderations, not ideology, determine the policy they pursue. Thus, thosecountries that are earning comparatively inadequate returns through roy-alties and/or taxes on hydrocarbon production are more likely to moveagainst the companies than countries that already gain significant revenuesfrom these industries.

This finding suggests one additional conclusion: that policy change,rather than actual policy, drives international responses. This conclusionis evident in a comparison between the “bad left” in Venezuela with the“good left” in Brazil. In Venezuela, Hugo Chavez first worked to wrestcontrol of the national oil company PDVSA from the opposition. PDVSAhad been “internationalized” starting in 1989, such that it sold concessions(often at very favorable terms) to foreign investors and then competedwith those firms. For our purposes, Chavez’s more important move wasto purchase a majority share in most of these foreign-owned companies.This new system, which left up to 40 per cent of the companies in privatehands, was not unlike that already enjoyed by Luiz Inacio Lula da Silva inBrazil, and leaves a much greater role for private capital than in Mexicoor Saudi Arabia. It is only Venezuela, however, that has received interna-tional opprobrium. This example thus suggests, then, that while presidentswho move against entrenched interests chance retribution, presidents whocome to power after nationalization can not only avoid privatization, theycan often enjoy the fruits of the nationalization without international scorn.

THE DEPENDENT VARIABLE: CHARACTERIZING OILNATIONALIZATION PROCESSES

While at some points in time foreign firms have been welcomed into LatinAmerican countries, at other times the countries and firms have clashedover the possibility of nationalization. While nationalization has affecteda wide range of industries,3 we have confined our focus to the nation-alization of oil and gas resources in Mexico and South America, with anemphasis on extraction (rather than the distribution and marketing aspects

3



Table 1 Oil and gas nationalizations

County Year of Nationalization

Argentina 1922, 1924, 1930, 20041

Bolivia 1937, 1969, 2006Brazil 1953Chile 1932, 1950Colombia 1951Ecuador 1972, 1974, 2006Mexico 1938Peru 1968, 1986Uruguay2 1931Venezuela 1976, 2001

Source: Compiled by authors from Grosse (1976), Blaiser (1985), Sigmund (1980) and others.1ENARSA, the state corporation created in 2004, controls concessions for off-shore rights.The rest of the oil industry is still largely owned by a private corporation (YPF-Repsol), withthe state as a minority share-owner. The 1930 nationalization was cancelled by a militarycoup.2Refining and distribution; Uruguay has no oil for extraction. We therefore ignore Uruguayin other parts of this paper.

of the industries). Table 1 lists the countries and the years in which their oiland gas resources were nationalized.4 Note, for example, that Argentina,Bolivia, Chile, and Venezuela (among others) have moved multiple timesto nationalize the same industries. The later processes either reversed pri-vatization processes or deepened the earlier nationalizations.

While Table 1 denotes the major nationalizations in each country, nation-alization is not a dichotomous variable. Nationalization can mean takingfull control of all aspects of an industry, but in most cases, countries arenot so bold.5 Recall that even Bolivia’s highly publicized nationalizationof its gas fields in 2005 largely mandated that the state acquire a majorityshare. Similarly, Ecuador increased taxes and government controls in 1972,and then took a 62.5 per cent share of Gulf Oil in 1974. When evaluatingtheir options for increasing revenue and exerting greater control over oilresources, governments face numerous options (and multiple challenges).At one extreme, the governments can expropriate foreign assets and re-assert national sovereignty over subsoil resources, by claiming that theforeign companies have exploited the country. At the other, the govern-ments can negotiate with the foreign firms to purchase all or perhaps just51 per cent of the company’s assets. The goal of this type of system is toensure that foreigners continue to invest and use their technical expertiseto develop the enterprise. A third option, perhaps not on the same con-tinuum, would be for the government to restructure the tax and royaltiessystem to increase their take from the foreign enterprise.6 In this case, thecompany either could be left partially in foreign hands with state andprivate local interest forming a type of joint venture. Sometimes a foreign

4



firm with only a minority share can still exercise some control if it providesthe technological know-how. Finally, there is a fourth option: governmentscan set up public enterprises that compete with private companies. Thisarrangement can help the government to access lucrative resources whilestill encouraging outsiders to invest in the economy (though often in riskieraspects of the business such as exploration and refining).

These options suggest a four-dimensional characterization of national-ization based on whether: (1) the government has majority ownership ora 100 per cent share in the company; (2) the public company has at least50 per cent (but not full) ownership of the industry; (3) the foreign firmand the country reached agreement on compensation; and (4) the govern-ment moves for more control over oil and gas companies by significantlyincreasing taxation and/or royalties. In most cases, the nationalizationprocesses that we have categorized are not one-shot deals; each policychange is just another step in long-term conflict between the states and theforeign corporations. In some countries, there had been previous attemptsto wrest some level of control over their resources, either through takingmore direct management of the industry, changing the tax structure, rene-gotiating royalty payments, and/or exercising greater financial control ofthe multinational interests, depending on who was in office. In others(e.g. Venezuela 1976 and Colombia 1951) nationalization was the meansby which the countries ended long-term contracts or concessions. Still, ineach country, the nationalization pressures came to a head with signifi-cant legislation that set up new state enterprises or dramatically changedthe level of control afforded the countries. Tables 2–4 focus on these laws,using cross-tabulations to highlight the multidimensional character of thenationalizations.

The first dimension (rows in Table 2) is whether the countries took overcomplete control or whether joint ventures were formed in which the pri-vate firms continued as minority shareholders. In the clearest cases, thenationalizing country has taken over the complete industry. Foreignerswere expelled from these countries and 100 per cent; of their assets weretransferred to the state. The second dimension of the table (columns) iscrucial, however, because in many cases the state has not tried to monop-olize the industry. There is much diversity in the way that the states haveasserted less-than-full monopoly control. Cases that fall into the right col-umn, therefore, include those where the state has taken full control of aparticular firm but not others, when they have taken over a sector of theindustry (such as extraction or distribution), or where they have assertedownership of resources in a specific region.

The top left box of Table 2 recalls the classic understanding of nation-alization: a state enterprise with total control of an industry. Mexico’screation of Pemex by taking over of the foreign-owned oil fields in 1938,Peru’s take over, and the creation of Petroperu are the clearest cases of this

5


scottmorgenstern

Highlight


Table 2 Country share and company monopolies

Monopoly Public company competesindustry with private firms

100% ownership Argentina 19301 Argentina 1922, 1924Bolivia 1937 20042

Chile 1932, 1950 Bolivia 1969Mexico 1938 Ecuador 20066

Peru 1968Uruguay 1931

50% < ownership < 100% Brazil 19533 Bolivia 20067

Peru 19865 Colombia 1951Venezuela 1976, 20014 Ecuador 1972, 1974

1Cancelled by coup.2The 1924 nationalization deepened the state control. See Table 1 about 2004.3Government owned only a majority share, but only domestic investors allowed.4In 1976 the private companies became subsidiaries of PDVSA.5After nationalizing the industry in 1968, the state allowed some private exploration in the1970s. Two companies, Belco, and Occidental, struck oil in the 1970s. Occidental, however,had been in a joint venture with Petroperu and Belco was taken over by the state in 1986(compensation was paid several years later).6From Ecuador’s standpoint, the dispute with Occidental that ended in the cancellation ofits contract was not a nationalization.7Bolivia’s 2006 Hydrocarbons Law called for majority Bolivian ownership but Bolivia lackedthe capital to actually purchase majority shares and settled for a sharp rise in taxes.

box. Bolivia’s policies of 1937 also fit there.7 Other cases of nationalizationare less complete (lower left box), leaving important roles for the privatecompanies. In Venezuela, for example, the 1976 nationalization convertedthe private companies into subsidiaries of the state corporation. Thesecompanies, then, maintained an important role in directing the industry.Still, this case fits under the monopoly category as the state had a stake inall oil production.

In Bolivia, the state nationalized Gulf Oil in 1969 but officials allowedother private companies to continue operating. The Argentine processes in1922 and 1924 are similar. There, the state created a national corporation,YPF, and then reorganized such that it would fully control some but notall wells (Solberg, 1979).8 These cases, as well as Ecuador’s recent courtordered takeover of Occidental Petroleum, therefore fit into the upperright box.9 In these cases the state has typically asserted its ownershipof subsoil rights and then granted concessions to either the private orpublic firms. In some of these cases, the state also asserts full control of apart of the industry, such as extraction, while leaving downstream aspects(processing) to private industry.

The final box in the table includes those cases (Bolivia 2006, Colombia1951, and Ecuador 1972) where the state corporation took just a majorityshare in some but not all of the natural resource companies. In these cases –

6



Table 3 Country share and compensation agreements

Compensation No compensationagreement agreement

>50% ownership Bolivia 2006Colombia 1951Ecuador 1972, 1974 /1Venezuela 2001 /2

100% ownership Bolivia 1937 /3 Brazil 1954Chile 1950 /6 Mexico 1938 /4Venezuela 1976 Peru 1968 /5

/1 Unclear if the state took even a majority share in some firms./2 Two companies have not yet settled an agreement./3 Agreement signed six years after nationalization./4 Companies settled in 1941, but under the succeeding president (and pressure from theU.S. government due to WWII)./5 Some compensation six years after nationalization, though not fully public terms./6 In 1932 the Chilean government claimed the right to assert full control over oil resources,but they did not do so. At that time the government did establish state control over imports,distribution and sale of petroleum.Sources include: Sigmund (1980) Blasier (1985), Puga Vega (1964).

as well as Chile’s 1968 nationalization of their copper fields – the state tookcontrol of the most lucrative companies or asserted control over provenoil (copper) fields without asserting control over exploration or more riskyventures.10

Often the distinguishing feature between the nationalization arrange-ments is whether the countries and companies reached agreement oncompensation for the transfer of assets (Table 3). These agreements arealways controversial, since the multinationals are wont to claim the gov-ernments have undervalued company assets, and the host country claimsthe opposite. Still, negotiations have often led to signed formal agreements.

The clearest case of a state taking over a company’s assets without reach-ing financial agreements was Peru in 1968, when the military occupied andexpropriated the oil fields of the International Petroleum Company (IPC).Peru made it clear that IPC was a special case and that other nationaliza-tions that were to follow were to be properly compensated. As a resultof economic sanctions applied by the United States and the substantialreduction in bilateral aid, Peru provided a packaged compensation to na-tionalized U.S. firms, and although the details were not made public, somefunds may well have reached the IPC.11 Ecuador also took over a petroleumcompany without compensation in 2006, but in this case the state justifiedits action, arguing that the company violated its contract by selling stockto a third party without state approval. Finally, the other exceptional caseof an expropriation in South America dealt with copper rather than oil.Three U.S. companies controlled 85 per cent of copper produced in Chile(Ingram, 1974). The main argument against compensation was that the

7



multinational companies had taken “excess profits” and thus deserved nomore revenues from the state.12 In most other cases, however, governmentshave paid substantial sums to the companies (Sigmund, 1980). In Mexico,for example, the oil companies were paid $47 million to settle the takeoverin 1938 (and the British industries were paid $80 million). The corporationsinitially resisted this arrangement (demanding $262 million), but finallysigned the deal in 1942. In Venezuela the oil companies were paid about$1 billion (against an estimated value of about $5 billion) in 1976, whichcritics at the time, as well as today’s (Chavez controlled) PDVSA, claim ismore than the companies would have earned for the next 10 years whentheir concessions would have expired.

With one partial exception, even the recent nationalizations have notbeen expropriations. Venezuela’s Chavez made front-page news for na-tionalizing his country’s oil industry – but this was not an expropriation.In fact, much of the controversy was whether Chavez had enough cash tocompensate the companies. Most of the companies reached agreementswith the state and converted their “strategic associations” and “oper-ating service agreements” into joint ventures (with a PDVSA share of60 per cent) as required in the 2001 law. As noted earlier, two companies,ConocoPhillips and ExxonMobil, did not reach agreement, and as a re-sult, the state took shares of 100 and 83.4 per cent respectively, while thecompanies took their cases to arbitration. Similarly, Evo Morales receivedinternational scorn for his nationalization of the gas fields in Bolivia. Hereagain, however, the nationalization was not expropriation. Morales didforce the firms to sign new contracts that sharply increased taxes and roy-alties, and the state was supposed to purchase a majority ownership of thestock. The tax change went forward, but the vast majority of purchasesstalled owing to a lack of state capital.

The Morales example points to the next defining variable for national-ization, the taxing scheme. In one sense, the taxing scheme is a continuousvariable defining the degree of nationalization. Any tax above zero impliesthe state has a claim on the resources themselves and/or the profits ob-tained from the exploitation and sale of those resources. As Sigmund (1980)argues with reference to Venezuela in the 1940s, increasing taxes (whetheron profits or a per/barrel assessment) is a good alternative to taking controlof an industry, because it increases a country’s revenues without generat-ing threats to the supply of capital and technology, economic blockades, oreven military intervention. In most cases (e.g. Venezuela 1945, Peru prior to1968, and Ecuador since the 1970s), the taxes have been used in the coun-tries’ struggles against the corporations as an alternative to managerialtakeovers (Lieuwen, 1985).

Taken together, Tables 1–3 plus the taxing issue suggest a two-part 9-item scale (Table 4). The first part is based on presidents’ options whenfacing a privatized industry, and the second part of the scale indicates

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Table 4 Scaling privatization and nationalization

Nationalization/Privatization Scale Example

Starting with a Private Industry1 Monopoly Nationalization No Compensation Peru 19682 Monopoly Nationalization With compensation Mexico 19383 Majority Share Nationalization No compensation Bolivia 19694 Majority Share Nationalization With Compensation Venezuela 20015 Extend government controls (or taxes) Mexico 1920–286 Leave Privatized Bolivia 1997–03

Starting with Nationalized Industry7 Leave Nationalized Brazil 1974–798 Partial Privatization Peru 1990–929 Full Privatization Venezuela 1989–93

the options for a president facing a nationalized industry. For the firstpart, at one extreme the president can leave the industry privatized ormove to expropriate the industry and take monopoly control without of-fering compensation. Focusing on these extremes, however, misses thegreat variety in government petroleum industry policies. Moving up thescale from “leave privatized,” the next theoretical category is one wherethe government extends some controls or increases taxes, but leaves own-ership and operations in the hands of the private companies. The nexttwo most severe options are for the government to purchase or expropri-ate majority ownership in one (or more) companies, while leaving othercompanies to operate independently. The Venezuela experience presentsa subtype. Chavez entered facing a national oil company, but it operatedautonomously. There were also several private companies. Chavez movedagainst both: first consolidating control of the national company, and laterpurchasing (or expropriating) majority shares of the private companies.As a result, we categorize him as facing a privatized rather than a nation-alized industry. The final two categories in this part of the table are whenthe government assumes monopoly control of the industry – either withor without compensation.

For the second part of the categorization, where presidents enter facinga nationalized industry, we have truncated the discussion and just focuson the options of leaving the industry nationalized, and partially or fullyprivatizing it. The middle category, however, could include a range ofoptions; the government could sell control of some (but not all) oil fields, itcould keep subsoil rights but sell some portion of the national company, orit could keep control of some aspects of the industry (such as distribution)while selling off rights to others (such as extraction).

Many of these category definitions as well as the placement ofparticular presidents require interpolation. First, it is not always clear whena tax change is dramatic enough to imply a categorical shift in government

9



policy. Similarly, it is frequently unclear how to judge compensation pack-ages. To limit the bias here, we tried to judge whether there had beensignificant negotiations prior to the nationalization and whether the com-panies accepted the new terms. Of course the companies may have beennegotiating under duress (i.e. the threat of a forced takeover), but thisshould help differentiate the cases where the country takes over an indus-try and then later offers some compensation.

THE PURPORTED INDEPENDENT VARIABLE: LEFTISTS,POPULISTS, AND INSTITUTIONALISTS

Studies of populism have generally come to a clear conclusion about thenegative relation between populism and economic policy.13 In the mostinfluential study of this phenomenon, economists Dornbusch and Ed-wards (1991) focused on the macroeconomic “mismanagement” of pop-ulist regimes. A first-glance review at recent nationalizations in Bolivia,Ecuador, or Venezuela might raise similar concerns, with the presidentsdangerously pursuing rhetorical gains while ignoring issues of efficiencyand property rights. Our evidence, however, suggests otherwise. In short,we find that not only were the policies undertaken in Bolivia, Venezuela,and Ecuador rather moderate (involving negotiated settlements or courtordered cancellations rather than outright expropriations), but also thatother historical leftists and populists have not behaved much differentlyfrom centrists or rightists.

To evaluate this hypothesis, we require operationalization of presidentialtypes (military or elected), ideological positions, and populism. Author-itarianism was traditionally defined by the presence or absence of elec-tions, but recent experiences with illiberal or delegative democrats whocombine elements of authoritarianism with elections, suggest difficultiesin applying that criterion. Populism has always been a contested conceptthat embodies some combination of a charismatic style with the leader’sappeals to lower or multi-class constituencies, urban workers, national-ism, and the avoidance or manipulation of the democratic institutionalframework.14 Definitions of populism in Latin America often conflate aruler’s style (personalist or anti-institutionalist) and an ideology (multi-class and redistribution) (e.g. Drake, 1978; Dorbusch and Edwards, 1991).Weyland (2001), in recognition of the problem, used Venn diagrams withfour interlocking circles to explain the multiple if not conflicting ways thatthe term has been applied in a Latin American context. Many of thesedefining characteristics, however, are endogenous to policy choice, andthus the concept is still unusable as an independent variable. The idea ofleftism has similar problems because the term can imply both economicprinciples (redistribution) and political views (centralization). Even moreproblematic, these issues overlap aspects of populism.

10



In order to deal with some of these issues, our approach is to classifypresidents according to three (relatively) independent and (to an extent)measurable dimensions as shown in Table 5. We will return to the numbersin the table shortly, but here focus on the coding system. The first variable,depicted as the horizontal dimension of the table, is the standard classdivide; is the leader supported by lower or upper classes? Empirically(and theoretically) the support coalition is tied to the presidents’ policypreferences (extreme leftists are statists), but especially among politicianssupported by the middle sectors of society there is significant diversityin the presidents’ attitudes about the degree to which the state shouldinsert itself into the economy. As a result, we add another dimensionto the model based on the presidents’ implementation of statist versusneoliberal policies. In examining the statist-neoliberal scale, we tried toevaluate the presidents’ policies without regard to hydrocarbons policy.Of course hydrocarbons policy is often a central component of the eco-nomic policy, but we found many exceptions. Similarly, it was not alwayspossible to separate ideology from policy stances, but we attempted to doso by categorizing the former according to the presidents’ support coali-tions at the time they entered office separate from the actual policies theyimplemented. “Switchers” (Stokes, 2001) like Fujimori (in his first term),therefore, combine center-left and neoliberal labels in his first term butcenter-right and neoliberal labels in his second. This is justified becausewe are trying to understand how a president’s ideology and campaignpromises affect future policy decisions.

In coding these two dimensions, we worked from several sources. Wefirst consulted Coppedge’s (1998) study of expert surveys. While a usefulstarting point, his study provides only a rough measure; consider that thePeronists are classified as a secular centrist in 1946 but “other” for 1948.Coppedge’s data also fails to help in classifying the non-elected presidentsand the time series ends in the mid-1990s. Still, the data is fairly compre-hensive and provide a consistent way to judge the ideological positionof many of the presidents in our sample. To complement Coppedge’swork and to separate the presidents’ support coalition from their pol-icy positions, we relied on presidents’ biographies and other specializedliterature.

Next, we operationalize Roberts’ (2007a, 2007b) conception of populism.Roberts moves beyond the conflicting (and often historically specific) def-initions of populism by focusing on leaders’ connections to already es-tablished, institutionalized parties, arguing (as do we) that “leftism” and“populism” are separate categories and that populism “refers to the top-down political mobilization of mass constituencies by personalistic leaderswho challenge established elites (either political or economic) on behalf ofan ill-defined pueblo.” We capture populism by coding whether the presi-dent created a personalist electoral machine and consequently lacked close

11


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).

12



ties to existing political parties.15 To this end, we first distinguish thoseleaders who were elected from those who were not, and also considerwhether elections were held in dubious circumstances. Then, among theelected presidents, our concern is whether the leaders worked through theexisting institutional structure or created a new political party or constitu-tional framework. Our specific coding criteria is whether the president’sparty gained at least 10 per cent of the vote in an election prior to thepresident’s campaign; if not, we label the president a non-institutionalist.Presidents who took power via a coup or rigged elections (as in Mexicountil 1997 or in Argentina 1932–46) fall into the category of dubious insti-tutionalists, recognizing the pro-forma nature of many of these “elected”regimes that were nonetheless often highly institutionalized. This tech-nique distinguishes, for example, Juan Peron, Getulio Vargas, and AlbertoFujimori, traditional populists who took power without the aid of long-standing political parties, from Allende who won the Chilean election asthe representative of an established party. Still, some leaders are difficult toclassify, such as Ecuador’s Jose Marıa Velasco Ibarra who was elected fivetimes from a variety of parties. As a result, specialists will undoubtedlydisagree with some of our classifications, but the large number of casesshould give confidence to the trends we have uncovered.

In sum, the three dimensions provide a more precise classification ofpresidential types. We replace the vague term “populism” through a con-sideration of whether the leader is tied to existing parties and institutions.As such, we can clearly distinguish between Chavez and Morales (electednon-institutionalists with a lower-class support base) from Allende (in-stitutionalist with a lower-class support base). We can also separate outthose leaders who are often grouped with the populists but gained powerthrough military intervention (Alfredo Ovando in Bolivia, Juan Velasco Al-varado in Peru, Velasco Ibarra and Guillermo Rodriguez Lara in Ecuador,or Fujimori who imposed an auto-coup in Peru). The framework is stillcomplicated, however, because some leaders used the military to gainpower but consolidated that power using elections (or vice versa) andwithout much resort to coercion. Further, Peron and others have movedat different times in their careers with reference to their willingness to useforce (and on which citizens). These coding issues complicate empiricaldiscussions, but as we show in the next section, the classifications allowsfor tests of the relation of presidential types and nationalization policies.

OIL NATIONALIZATION POLICIESAND LEADERSHIP TYPES

To analyze the relation of institutionalism, ideology, and the policies to-wards hydrocarbon industries, we now combine our two typologies. If wefind that institutional routes to power and ideological categories do align

13



with nationalization processes, then we can conclude that a president’stype is related to policy choice. If not, then economic factors, the interna-tional climate, or starting point must provide a better explanation for acountry’s move towards or away from nationalization.

Toward this goal we first categorized every president in Latin Americafrom the time when countries adopted oil or gas laws according to the cri-teria suggested in the previous section (only excepting very short-livedpresidencies). We then matched the presidential types with the presi-dents’ policies towards the industries. Our database, which is availableat our website <http://www.pitt.edu/∼politics/faculty/Morgenstem/morgenstem personalwebpage.html>, includes 169 presidential termsand is summarized in Table 5.16 The numbers in the cells refer to thenationalization types, defined in Table 4. The top left entry, therefore, sig-nifies that four presidents were statist-leftists from the military. Two ofthese nationalized their industry without offering compensation (code 1from Table 4) and two left their industries nationalized (code 7).

The raw data in the table gives a first indication that ideology is onlyweakly related to any aspect of nationalization policy. To highlight this nullfinding we conducted both bivariate and multivariate tests. First, Table 6looks at the bivariate relation between the presidents’ left–right positionand their nationalization policies. The nine most aggressive nationalizers(codes 1 and 2) include four leftists, two from the center-left, and three fromthe center or right. As a percentage, then, the leftists have been more likelyto nationalize, but even most of these presidents have acted with prudence,

Table 6 Left, right, and nationalization

Left Ctr-left Cen-ter Ctr-right Right Total

1 Monopoly NationalizationNo Compensation

2 2 1 5

2 Monopoly NationalizationWith Compensation

2 1 1 4

3 Majority ShareNationalization NoCompensation

1 1

4 Majority ShareNationalization WithCompensation

2 1 1 4

5 Extend GovernmentControls (or Taxes)

1 2 2 2 7

6 Leave Privatized 18 13 19 7 577 Leave Nationalized 6 18 18 24 15 818 Partial Privatization 1 3 2 2 89 Full Privatization 2 2Sum 14 46 35 49 25 169

14



offering compensation and continued private opportunities rather thanoutright expropriation.

Looked at another way, among the 14 leftists, one-half of them came tooffice with nationalized industries, and only one of them moved towardsprivatization. Although six of the other seven moved the industry towardsnationalization, only two failed to offer compensation. This record, how-ever, does not compare unfavorably with the center-rightists. Of the 49presidents in that category, 24 did not privatize their public enterprises, 19left their private industries untouched, and four moved their private com-panies towards the public realm, though all of these offered compensation.

The strongest objection to this conclusion is that none of those nation-alizing without compensation come from the right side of the ideologicalscale. There were only five presidents classified as nationalizing withoutcompensating the industrial owners. Two of these were leftists (Bolivia’sOvando Candia [1969–70] and Toro Ruilova [1936–37]), two center-leftists(Brazil’s Vargas [1951–54] and Peru’s Velasco Alvardo [1968–75]), and onecentrist (Argentina’s Yrigoyen [1928–30]). At the other extreme, however,most rightists and center-rightists with a neoliberal bent failed to privatize.There is, therefore, a weak relationship between leftists and nationaliza-tion, but little expectation that putting rightists into power will result inthe return of industries to private hands.

In sum, while there is some evidence that the leftists nationalize, thestarkest conclusion is that presidents of all stripes, including those of thecenter and right, have not moved to privatize state hydrocarbon industries.

To confirm this finding in a multivariate setting, we used a series ofordered-logit regressions, conditional on the initial arrangement of theindustry (Table 7). First, for presidents facing privatized firms, we canregress the nationalization policy (scaled 1–6) on the president’s IDEOL-OGY (scaled 1–5; left to right), whether the president was ELECTED,

Table 7 Ordered logit regression; dependent variable; nationalization policies(codes 1–6)

All Excluding Excluding AllCases Far Left Far Right Cases

Neoliberal 0.04 1.01 1.00 0.00Statist −0.77 0.40 −1.92∗∗ −0.84∗∗

Elected −.61 −1.39 −0.71∗ −0.84Institutional 0.25 0.30 0.92Non-Institutional −0.74Ideology (L-R) 0.65∗∗ −.05 0.04 0.62∗∗

N 77 70 69 77Pseudo R2 0.11 0.02 0.16 0.11

∗p < .1; ∗∗p < .05.

15



dubiously elected, or took power through a coup (scaled -1, 0, 1) and aseries of dummy variables indicating (a) whether the president’s generalpolicies were STATIST, NEOLIBERAL, or a mix and (b) whether the presi-dent was the head of an INSTITUTIONAL party or not. In our descriptivetable our variable distinguishes institutionalists, non-institutionalists, andmilitary leaders. In the regression, however, we could not include a seconddummy due to the very high correlation between ELECTED and the sec-ond dummy. A final regression, therefore, uses a NON-INSTITUTIONALdummy in place of the INSTITUTIONAL variable.

Supportive of our hypothesis, the first regression shows that neithera leader’s electoral status, whether or not they lead an institutionalizedparty (in contrast to a new movement or the military), nor their economicpolicy has a statistically significant impact on their nationalization policy.The last regression confirms the finding, though it suggests the statists areless likely to nationalize. Contrary to the bivariate analysis, the ideologyvariable does reach statistical significance. The result, however, is tenuous,since it is predicated on the few outliers on either side of the spectrum.The second and third regressions show that if we drop the seven leftists oreight rightists, ideology is no longer related to nationalization policy. Thefinding that outliers drive the regression implies a need to investigate themin more detail. As we noted above, there were only a handful of leftists(seven who entered when the gas industry was in private hands), andalthough all of them did move towards nationalization, five compensatedthe companies. On the right, seven presidents left the industry in privatehands and one partially nationalized the industry (Urdaneta Arbelaez,Colombia 1951–53).

The poor relation of ideology and nationalization is further evidentif we consider cases where presidents enter facing already-nationalizedindustries. The regression (not shown) indicates that presidents on theright are even less likely to privatize industries than are leftist presidents.Stated in reverse, presidents on the right tend towards the “leave nation-alized” side of the scale. These relations hold if we drop the far left fromthe regressions (the ordered logit does not converge if we drop the farright).

Alternative explanations

If ideological leanings fail to fully explain nationalization policies, thealternative hypothesis is that economic pressures and constraints drivepresidents. When presidents consider nationalizing petroleum or otherlarge industries, they must address four central questions: First, how willa country finance the takeover of the industry? Second, after the takeover,will the country have enough access to capital to finance continuedinvestment in the industry? Third, will the United States or other affected

16



countries impose an economic squeeze or other sanctions that would affectaccess to either finance or technology? Fourth, how well will a nationalizedfirm compete with private enterprises?

Nationalization projects are very costly, and Latin American countrieshave generally lacked capital necessary to purchase foreign-owned assets.When countries negotiate with firms rather than expropriate assets, thecountry must finance the purchase through a combination of internationalloans if available, domestic budget allocations, domestic bonds, and levieson future income from the nationalized industries.17 Where funds are noteasily available, nationalizations have sometimes been slowed or stopped(e.g. Bolivia 2006).

Investment capital is a second concern. Countries may not be able tocount on accessing international financial markets; private investors wouldlikely be wary about putting their money in an industry where there is thepotential for further nationalization.18

Third, how will the United States or other countries respond to thenationalization? In some cases, the United States has not responded withmore than offers to negotiate settlements, but in other cases the responseshave included military intervention, economic sanctions, rhetorical threats,and the suspension of aid (Blasier, 1976).

A fourth consideration is how well the state enterprise can compete withprivate firms. Efficiency, investment, costs, and U.S. responses will be in-volved in this decision. When countries lack sufficient investment funds todevelop a full industry or are unwilling to make risky investments in par-ticular areas, a potential strategy is to allow private investment by formingjoint ventures. Regarding the oil industry, this might imply allowing pri-vate firms to become involved in explorations, refining, or the distributionbut not the extraction of the resource. By allowing public–private partner-ships, such a scheme can facilitate technology transfers and the marketingend of the business.

These concerns explain why some presidents who may be predisposedto nationalization do not move far in that direction. An additional hy-pothesis, then, is that the leftists and/or non-institutionalists nationalizeindustries only when the international environment is more supportiveof statist policies. There was a wave of nationalizations in the 1960s and1970s, followed by some retrogression in the 1980s, and then a return ofnationalizations in the last few years. These waves, however, have notswept in all countries. Table 8 tests whether the relation between ideologyand institutionalism with nationalization is time bound.

The figures in the table divide the presidents by their left/right ideologyand whether they were institutionalists or not. For example, there were sixinstitutionalist and five non-institutional presidents from the center andright who left their industries private in the 1990s and 2000s, but 14 wholeft them nationalized.

17



Tab

le8

Tim

ing

and

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onal

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priv

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licie

s∗

Lef

tC

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r-le

ftC

ente

ran

dR

ight

1960

–70s

1980

s19

90–2

000s

1960

–70s

1980

s19

90–2

000s

1960

–70s

1980

s19

90–2

000s

Star

ting

wit

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ivat

ized

Ind

ustr

yM

onop

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Nat

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No

Com

pens

atio

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10/

1

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atio

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ith

Com

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atio

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0

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are

Nat

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No

Com

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atio

nM

ajor

ity

Shar

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atio

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ith

Com

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12/

0

Ext

end

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ernm

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ontr

ols

(or

Taxe

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1

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4/0

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3/1

7/4

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ting

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atio

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01/

04/

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113

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0

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01/

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37/

012

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1513

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22/

6

∗ The

firs

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equ

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inst

itut

iona

lists

and

the

seco

ndis

the

num

ber

ofno

n-in

stit

utio

nalis

ts.

18



While the table does reflect the waves, the most common policy is thestatus quo in all periods; regardless of the ideological position of theirpresidents, countries with privatized industries leave them privatized,and those with nationalized industries leave them nationalized,. Since the1990s, Latin Americans have elected three leftists, 15 from the center-left,and 28 presidents from the center or the right. Of these 46 presidents, 15inherited a private industry and did little to move towards nationalization.Another 23 inherited a nationalized industry and stood pat with the extantpolicy. Only eight tried to change the extant policy; two moved towardssome nationalization and six moved towards privatization. These patternsare not dissimilar from those in the 1960s–70s.

What does seem to separate the non-institutional left from other presi-dents is the process by which they have moved against foreign companies.The two institutional centrist presidents that moved their countries to na-tionalize their industries – Carlos Andres Perez in Venezuela (1976) andEduardo Frei in Chile (in regards to copper in 1968) – used less contentiousmethods than have recent presidents in Venezuela and Bolivia. Sigmund,for example, describes the Venezuelan nationalization of 1976 as “peacefuland relatively free of conflict” (p. 226) and the Chilean policy under Freiwas termed “negotiated nationalization” (Girvan, 1972). There is also thecase of a center-right non-institutionalist, Velasco Ibarra, who moved socautiously towards nationalizing the Ecuadoran industry in 1972 that themilitary overthrew him in part to speed the process (Martz, 1987). Thisis eerily similar to the case of Belaunde in Peru, who was deposed in amilitary coup by Velasco Alvarado in order to nationalize the U.S.-ownedInternational Petroleum Company.

While nationalization was a theme of the 1960s and 1970s, the 1980sbrought privatization to the Americas. After the so-called “lost decade,”however, many countries have reevaluated the role of the state in theeconomy, and three countries have made sharp moves to re-nationalize oilindustries: Bolivia, Venezuela, and Ecuador. It may be no coincidence thattwo of the countries have been led by non-institutionalists with agendasfocused on the poor. But, there have been other non-institutionalists in thisperiod, and they have either privatized industry or maintained a priva-tized status quo. Further, one institutionalist–Palacios in Ecuador–furthernationalized his country’s industry. None of the remaining institution-alist presidents have nationalized their industries, though two of themhave maintained their previously nationalized industries under state con-trol. Argentina is a partial exception, in that their president Nestor Kirch-ner created a new national corporation, ENARSA, but this was a vehicleto control off-shore concessions rather than already established opera-tions. YPF, which was sold off under Carlos Menem beginning in 1991,is now a subsidiary of the Spanish firm Repsol and one of the largest en-ergy companies in the world. Further, though Kirchner is a member of

19



the long-running Justicialista (Peronist) party, that party has broken intofractions.

Given that neither presidential types nor time periods provides a thor-ough answer to why some presidents move toward nationalization andothers do not, what might better explain this phenomenon? One possibleexplanation, which we cannot fully test here, regards the “starting point.”Both Chavez and Lula entered office overseeing state oil companies thattheir predecessors had partly privatized. These two leaders perhaps re-acted differently from one another because they faced very different typesof situations. In 1983, PDVSA executives feared that politicians might usecompany profits to subsidize government expenditures, and they thus“internationalized” the company by off-shoring profits through transferpricing with their American affiliates. Then, in 1989, company executiveswon further concessions, which lowered taxes and royalties on the profitsthat could not be internationalized. PDVSA also shifted types of produc-tion from high yield to low yield fields (allowing private investors withguaranteed lower tax rates to work the higher yield fields) to further limitthe federal government’s ability to tax. The result was that the federalgovernment’s take on rents, royalties, and taxes fell from 71 cents on thedollar in 1981 to 39 cents on the dollar in 2000 (Mommer, 2003; Parker,2007).

By contrast, when Lula entered office in 2003 he enjoyed high rates of re-turn from PETROBRAS. The 1997 “privatization” left the government with55.7 per cent of the company (including voting rights), and the companyretained a near monopoly of production (Brandao, 1998). The governmentalso charges a 10 per cent tax on royalties and received about $2 billionfrom a special tax on exploitation of large oil fields. The government, how-ever, has considered substantially raising these rates (Alexander’s Gas andOil Connections, 2008).

In sum, economics rather than ideology seem to explain these presidents’reactions. Brazil’s president Lula has done little to change their policybecause his revenue stream has been very good. Chavez, by contrast,faced a situation where he was not receiving significant benefits fromthe oil industry, and thus changed the law in the government’s favor. Inaddition to the nationalizations we have discussed, he pushed a changein 2001 that required the PDVSA to own at least a 60 per cent share ofany joint venture. This is a similar percentage to that stipulated in theBrazilian constitution with regards to PETROBRAS and slightly less thanthe percentage that the Venezuelan government had captured prior to the1983 internationalization. The 2001 policy thus moves Venezuela’s revenueand control functions close to that enjoyed by Lula. Chavez’s problem,however, was that he needed to confront the oil companies to gain thatmore advantageous position, while Lula was able to enjoy the fruits ofearlier battles.

20



CONCLUSION: TWO LEFTS?

Exploitation – of oil resources and by foreign firms – has been a continuousconcern of the Latin American governments. Our concern here has beenwhether the conflict with private and generally foreign investors has beenconditioned on presidential type; in short, are what others have called“leftist populists” predisposed to expropriate hydrocarbon resources? Ourmost basic finding has been negative; we have shown that neither ideologynor ties to existing institutions does a good job of explaining the type orextent of the nationalization a country may carry out.

While we have focused this study on petroleum policies, an importantgoal has been to reflect on the debates that divide current leftists into“good” and “bad” camps. Our analysis would suggest that this debateshould focus less on ideology and rhetoric and more on the policy andeconomic situation that has driven presidential decisions. That is, whilewe cannot directly test the suggested counterfactual, it seems plausiblethat more “moderate” leaders such as Brazil’s Lula and Chile’s MichelleBachelet would have moved hydrocarbons or mineral policies in wayssimilar to those implemented by Venezuela’s Chavez or Bolivia’s Moralesif all had faced similar situations. The “good left” regimes in Brazil andChile came to power following privatization trends in their countries, butneither Pinochet in Chile nor Cardoso in Brazil fully privatized their keynatural resource industries. The result has been large revenues for thecountries’ coffers; Codelco, for example, earned over $9 billion for Chile in2006.19 In turn, neither Lula nor Bachelet had any reason to re-nationalizetheir industries, earning them the “good left” label.

At one level, Bolivia and Venezuela are very different, in that their“radical-populist” leaders carried out highly publicized and perhapsdestabilizing nationalization campaigns. These presidents, however, faceddifferent circumstances and the resulting policies have brought these coun-tries into situations that are now comparable to those of Chile and Brazil.The leaders of Bolivia and Venezuela claimed that their states were receiv-ing very little benefit from their country’s resources. Chavez built supportby arguing about the disconnect between the country’s oil wealth andhigh levels of poverty. Bolivians attacked the very low tax rates paid bythe multinational gas companies (just 18 per cent royalties). These issuesled to Morales’s successful campaign that was largely focused on the issueof nationalization. Although Morales failed to nationalize the majority offoreign hydrocarbon companies, the increase in taxes and royalties haveresulted in an almost ten-fold increase in government revenues, from just$170 million in 2002 to 1.5 billion in 2007.20

In Venezuela, Chavez’s strident anti-Americanism has not been fully re-flected in his petroleum policies either. He made three important changes.First, as noted earlier he fought striking workers to gain control over

21



PDVSA. Second he increased taxes (royalties increased from just 1 per centto 16.6 per cent in 2004 and then, in 2006, to 33 per cent for most firms,but from 34 to 50 per cent for production of some types of crude), andthird he forced the major private corporations to sell the state a majorityshare of their stock and convert their “operating service agreements” tojoint ventures.21 Two of the private companies refused to accept the terms,and thus, pending arbitration, Chavez has taken control of them. Still,Chavez has successfully wooed foreign investors, new deals have beensigned, and oil and other goods continue to flow. In these two countries,then, the rhetoric has been strong and the policy changes have been sig-nificant, but they have not been as radical as campaigns or critics wouldsuggest.

In sum, the two types of leftists do not divide clearly in terms of thepreferred role of the state, but rather the starting point from which theleaders have had to evaluate their industries. Nationalization is not asignificant (or attractive) possibility for Brazil and Chile because their ex-tractive industries are already partially controlled by the government andprovide significant funds to the government. The governments of Bolivia,Venezuela, and Ecuador, by contrast, had limited control of their indus-tries and had seen few benefits from them. Recognition of this situationhas given rise to fiery rhetoric, but economic realities have led these lead-ers to choose policies not too distinct from those already in place wheretheir “good left” colleagues govern. This is not to say that politics are fullysubsumed by economics. Economic conditions, however, do condition po-litical responses.

NOTES

1 Bolivia did take control, with compensation, of two small oil refineries ownedby Petrobras in addition to renegotiating operating contracts with some foreigninvestors. See Business Latin America (2007: 5).

2 Others have also adopted the “two lefts” argument. See, for example, Shifter(2006) and Mohr (2007: 17–19).

3 See Kobrin (1980, 1984) for an analysis of all types of nationalizations.4 See Grosse (1989) for a complete list of nationalized industries across Latin

America.5 Kobrin (1984) for example focuses on “expropriation,” which he defines as

forced takeover of a single firm or the entire industry. Even this more specificfocus, however, is problematic since it fails to account for the difference be-tween taking of a single firm versus a full industry, whether the country tookmajority control or 100 per cent of a firm or industry, and whether there was amutually agreeable compensation agreement or not.

6 Taxes on profits imply different symbolic control from royalties on resources,and they can change incentive systems, too. In this paper, however, we treatthese changes together, since they still leave management control in privatehands.

22



7 We have also placed Uruguay in this box, but ANCAP (Administracion Na-cional de Combustibles, Alcohol y Portland) was given a monopoly on impor-tation, production, and distribution of gas and oil (but not extraction); it lackedthe refining capacity to meet this mandate until 1937.

8 The 1930 reform went further, giving the state full control of the industry.Parts of that reform were repealed by the military that ousted Yrigoyen in1930.

9 The 2006 “nationalization” of Occidental was in actuality a court ordered can-cellation of a single agreement for exploration coupled with a newly establishedwindfall tax on oil and gas profits. (Business Latin America, 2009, 1).

10 Though Chile’s 1968 copper nationalization process would fit here, it wouldbetter fit in the monopoly box after 1970.

11 There is some dispute about compensation for the nationalization of US firmsin Peru. In 1974 Peru and the US government agreed to an overall compen-sation of $76 million, but some sources indicate that some of the money ($23million) likely went to the oil company. See Sigmund (1980) and SchwalbLopez-Aldama (1979).

12 Even under Allende, however, a constitutional amendment was passed toprovide some compensation for nationalized firms. See Sigumnd (1980).

13 For an exception, see Kobrin (1984) who states that ideology “af-fect[s] the circumstances of the takeover – such as timing, negotiat-ing, and negotiating posture – [rather] than . . . whether the expropri-ation takes place or not” (p. 337). The goal of his paper, however,was more to document waves of nationalization rather than test thishypothesis.

14 See Schamis (2006) for a review of populism, leftism, and policy stances inLatin America.

15 Roberts also notes that personalistic leaders who subordinate themselves to thewill of autonomous social movements, such as Evo Morales, are not populists.Our operationalization of populism, however, focuses specifically on politicalparties.

16 A term is defined as a continuous term in office. Reelection does not add anotherterm, but in a few cases when a president has either changed his ideologybetween elections or converted himself between institutional types, we haveincluded more than one observation for that president. Those with more thanone observation are: Alessandri (Chile 2), Banzer (Bolivia 2), Barrientos Ortuno(Bolivia 2), Belaunde (Peru 2), Betancourt (Venezuela 2), Caldera (Venezuela2), Fujimori (Peru 2), Lleras Camargo (Colombia 2), Paz Estenssoro (Bolivia 2),Peron (Argentina 2), Perez (Venezuela 2), Siles Suazo (Bolivia 2), Sanchez deLosada (Bolivia 2), Velasco Ibarra (Ecuador 4). The Argentine generals from1966–73 and 1976–83 are entered once each.

17 International loans are not usually forthcoming to support nationalizations,but Mexico, for example, did receive credit guarantees in the amount of itspayouts to the US companies (Sigmund, 1980).

18 In some cases (e.g. Peru, Ecuador, and Chile) the state has successfully main-tained investment flows by encouraging private firms to work in particularsectors of an industry.

19 Statistics from Bloomberg.com “Chile Copper Windfall Makes Bachelet Un-able to Placate Laborers,” <http://www.bloomberg.com/apps/news?pid=20601086&sid=aKuaKcxM9gHc&refer=news> (accessed on 21 July 2010).

20 Cited at http://www.petroleumworld.com/SF07112501.htm, but similar fig-ures given elsewhere (accessed on 21 July 2010).

23



21 Information about the tax increase comes from two BBC reports, “Venezuelaraises oil drilling tax,” by Iain Bruce, October, 11, 2004, http://news.bbc.co.uk/2/hi/americas/3732224.stm, and “Chavez doubles tax for oil firms,” May 8,2006, http://news.bbc.co.uk/1/hi/world/americas/4750473.stm. The latterarticle also reports that Chavez raised the tax on production of heavy crudefrom 34 to 50 percent (both accessed on 21 July 2010).

NOTES ON CONTRIBUTORS

Ruben Berrıos is assistant professor of economics at Lock Haven University. He isthe author of Contracting for Development (Praeger, 2000) and has published morethan two dozen articles in refereed journals and chapters in books. His main interestis in international development and comparative economic systems. His currentresearch focuses on distinguishing between extractive economies and productiveones.

Andrae Marak is the interim director of the honors program and an associateprofessor in the Department of History and Political Science at California Uni-versity of PA, and is an associate of the Center for Latin American Studies atthe University of Pittsburgh. He has published articles in Paedagogica Historica,the New Mexico Historical Review, the Journal of the West, and the Journal of the South-west on the centralization of education and the creation of the corporatist state inpost-revolutionary Mexico, borderlands schooling, the gendering of public schoolteachers, the Tohono O’odham, and education in the Sierra Tarahumara, and haspresented on Mexican electoral politics and the impact of NAFTA on U.S. elections.His book, From Many One: Indians, Peasants, Borders, and Education in Callista Mex-ico, 1924–1935 was published in 2009 by the University of Calgary Press. He hastwo books currently under contract with the University of Arizona Press, one ontransnational contraband, crime, and vice and the other on the Tohono O’odhamIndians.

Scott Morgenstern is an associate professor of political science at the Universityof Pittsburgh. Among Morgenstern’s publications are Patterns of Legislative Politics:Roll Call Voting in the United States and Latin America’s Southern Cone (CambridgeUniversity Press, 2004), Legislative Politics in Latin America, (coeditor and contribu-tor; Cambridge University Press, 2002), and Pathways to Power (coeditor and con-tributor, Pennsylvania State University Press, 2008). His articles and book chaptershave appeared in the Journal of Politics, Comparative Political Studies; ComparativePolitics, Party Politics, Electoral Studies, and other journals.

REFERENCES

Alexander’s Gas and Oil Connections (2008) ‘Oil Finds prompt Brazil to ConsiderChanging Rules’, Company News, May 5, 13(9).

Blasier, C. (1976) The Hovering Giant: U.S. Responses to Revolutionary Change in LatinAmerica, Pittsburgh, PA: University of Pittsburgh Press.

Brandao, F. (1998) ‘The Petrobras Monopoly and the Regulation of Oil Prices inBrazil’, Oxford Institute for Energy Studies.

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