The Paradox of Plenty 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. Meticulously documented and theoretically innovative, this book illuminates the manifold factors—economic, political, and social—that determine the nature of the oil state, from the coherence of public bureaucracies, to the degree of centralization, to patterns of policy-making.

Karl contends that oil countries, while seemingly disparate, are characterized by similar social classes and patterns of collective action. In these countries, dependence on petroleum leads to disproportionate fiscal reliance on petrodollars and public spending, at the expense of statecraft. Oil booms, which create the illusion of prosperity and development, actually destabilize regimes by reinforcing oil-based interests and further weakening state capacity.

Karl's incisive investigation unites structural and choice-based approaches by illuminating how decisions of policymakers are embedded in institutions interacting with domestic and international markets. This approach—which Karl dubs "structured contingency"—uses a state's leading sector as the starting point for identifying a range of decision-making choices, and ends by examining the dynamics of the state itself.

Terry Lynn Karl is Associate Professor of Political Science and Director of the Center for Latin American Studies at Stanford University.

“[Karl discusses] the way the oil boom of the 1970s effected five previously poor nations: Venezuela, Iran, Nigeria, Algeria, and Indonesia. . . . A wealth of natural resources, the author suggests, can enfeeble a nation's institutions and ultimately bring about economic decline. Conversely, some of today's newly industrialized nations, especially those in Asia, may have had success in part because they lacked natural resources. . . .[A] valuable book.”—Wilson Quarterly

“Finding inadequate the existing explanations [for the economic deterioration of oil exporting developing countries] that focus almost exclusively on economic disruption . . . [Karl] notes the deep social and political roots of the problems and adds these much-needed dimenstions to the discussion. . . . Though a Latin American specialist, Karl understands the Algerial and Iranian encounters with oil and has insights to offer all those who study Middle Eastern oil states—as well as those who lead them.”—Middle East Quarterly

“What the oil boom shows, and Karl clearly understands and explains, is that a period of very high prices can be just as damaging as a period of very low ones. Unless institutions can adapt quickly and constructively to rapidly changing economic realities, the opportunities which the latter present may produce more disappointments than achievements.”—Modern African Studies

“This is a stimulating and thought provoking book in which the author has tried to explain that single commodity-led economic growth induces similar development strategies in countries with different cultural backgrounds and political regimes.”—Latin American Studies

“This important book promises to redefine the debate on the rentier state and to draw wide attention in the field of comparative politics.”—Middle East Journal

“The Paradox of Plenty . . . deserves to be placed at the top of our reading lists and should become a staple in courses on political and economic development.”—MESA Bulletin

Honorable mention for the Bryce Wood Book Award, The Latin American Studies Association