Why did Muammar Qaddafi and Hugo Chavez nationalize the oil industries in Libya and Venezuela? Machiavelli urged princes to attend to both acquiring and sustaining power. In Power Grab: Political Survival through Extractive Resource Mobilization
(Cambridge University Press, 2020), Paasha Mahdavi
argues that modern leaders nationalize extractive resources (such as petroleum, metals, and minerals) to extend the duration of their power. By taking control of the means of production and establishing state-owned enterprises, leaders capture revenues that might otherwise flow to private firms. Successful leader then use the increased capital to secure political support within their states.
Mahdavi’s fascinating book demonstrates how leaders (both weak and strong) weigh the risks. In this political gamble, nationalizing and reaping immediate gains (at the risk of future prosperity) must be weighed against maintaining private operations and passing on short-term revenue windfalls – to secure long-term fiscal streams. Strong and weak leaders often weigh this risks differently. Mahdavi uses a combination of case studies and cross-national statistical analysis to interrogate this crucial political wager.
Susan Liebell is associate professor of political science at Saint Joseph’s University in Philadelphia. She is the author of
Democracy, Intelligent Design, and Evolution: Science for Citizenship (Routledge, 2013).