3. DOES OIL PREVENT DEMOCRACY? UCLA Professor Michael Ross wrote an article 2001 based on the question: does oil prevent democracy? He argues that most rich countries are democracies and there are very few rich countries that are not democracies (Singapur, interesting anomaly). High income countries are democracies but rich oil countries are not democracies so, what is the relation between oil and democracy? Is it just Arab oil? Because other rich oil countries like Mexico and Norway are democracies. Is the problem that they only relay in one source of income? (oil, diamonds…) // Why have rich oil countries not developed democracy? Ross gives 3 possible answers // RENTIER EFFECT: “Vivir de las rentas” is a country whose main income comes from selling a product abroad and the money is controlled by the Government. The product can be infrastructures like Suez Canal or sources like oil that is a very rich and stable source. But there are also what we call emigrant remittances, countries that get money from their emigrants that send the money back to their country (Ecuador —> Spain). What happens with oil is that the Government uses and controls it as it pleases. Rich oil countries don’t need taxes because oil gives enough money to build infrastructures. Rentier effect has 3 arguments:// 1.Taxation effect: it’s like a contract with the people. Government: “I don’t expect money from you but this means I don’t control what I do with the money, it’s “oil argument” (no accountability). The absence of taxation is related to the absence of accountability. 2.Patronage: when the Government provides basic needs (food and energy) for the poor but it’s not enough, what about education, health, culture. It patronages culture for the middle class because they already have the basic needs. It can reduce the demands for democracy (Arab Spring).3Group formation effect: the ability of oil countries to avoid problems by giving money to institutions (police, ONGs, universities) to make it look like a civil society but its a fake civil society because they don’t have autonomy which is one of the main characteristics of a civil society. It’s actually a false dictatorship. We could put Venezuela as an example..