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Abstract: The recent resource curse literature suggests that oil promotes authoritarian regime stability. Yet the causal linkages underpinning the political resource curse remain less well understood. Using a case study of Azerbaijan, this article first examines how oil revenues benefited the existing regime that has been in power for nearly 20 years. Second, it looks more closely at how the regime managed to survive the adversity of oil effects. Some support is found for three of the conventional causal links derived from existing theories of resource politics: patronage spending, repression, and economic diversification aversion. Historical-institutionalist theories are shown to be less adequate. Finally, to provide a more complete explanation for durable authoritarianism in Azerbaijan, the author proposes one additional factor: policy learning. The Azerbaijani regime's ability to navigate fiscal revenue volatility was predicated upon the decision to adopt a state fund for oil revenue management early on, before the onset of the oil boom. This policy innovation was drawn from foreign models and promoted by international financial organizations. Therefore, leaders' policy choices and their capability to draw lessons and to borrow policies from abroad may be crucial variables mediating oil's influence on regime stability in resource-reliant states, and thus deserve more scholarly attention.
In 1993, the former communist first secretary Heydar Aliyev returned to power in Azerbaijan, aborting the Perestroika-inspired process of political liberalization and ushering in a new era of post-Soviet authoritarianism. 1 Ten years later, in 2003, when oil windfalls were beginning to flood into the Azerbaijani economy, his son Ilham succeeded him as president. Nearly two decades under Aliyev rule, Azerbaijan has developed into a relatively stable autocratic political system.2 How to account for the persistence of the authoritarian regime in Azerbaijan?3 While answers will certainly vary depending on one's perspective, this article takes a political economy approach and focuses on the effects of oil on regime survival.4
A substantial literature argues that oil promotes authoritarian regime stability, which is one of its anti-democratic effects.5 Two properties of oil rents, their size and their volatility, generate two principal ways in which oil can influence authoritarian regime survival. First, large windfall profits accruing to the state's coffers make "more things possible" enhancing the ruler's choice set.6 With more resources at his disposal,...