ROUTLEDGE - The Political Economy of Extractivism

The Political Economy of Extractivism
For many countries, primarily in the Global South, extractivism – the exploiting
and exporting of natural resources – is big business. For those exporting countries,
natural resource rents create hope and promise for development which can be a
seductive force.
This book explores the depth of extractivism in economies around the world.
The contributions to this book investigate the connection between the political
economy of extractivism and its impact on the sociopolitical fabric of natural
resource exporting societies in Asia, Africa, Latin America, and Eastern Europe.
The book engages with a comparative perspective on the persistence of extrac-
tivism in these four different world regions. The book focuses on the formative
power of rents and argues that rents are seductive. The individual contributions
flesh out this seductive force of rents on different political scales and how this
seduction affects a variety of actors. The book investigates how these actors react
to the prevalence of rent, how they align or break with specific political and eco-
nomic strategies, and how myths of resource-driven development play out on the
ground. The book, therefore, underlines that rent theory bridges current debates
in different area communities and offers fresh insights into extractivist societies’
social, economic, and political dynamics.
This book will be of significant interest to readers in political economy, political
science, development studies, and area studies.
Hannes Warnecke-Berger is coordinator of the collaborative research project

www.extractivism.de and Senior Researcher at the Institute of Political Science at
the University of Kassel.
Jan Ickler is a PhD student at the University of Kassel.

Global Challenges in Political Economy
Taxation and Inequality in Latin America

New Perspectives on Political Economy and Tax Regimes
Edited by Philip Fehling and Hans-Jürgen Burchardt

Global Perspectives on the Seduction of Rent
Edited by Hannes Warnecke-Berger and Jan Ickler
For more information about this series, please visit: www.routledge.com/Global-

Challenges-in-Political-Economy/book-series/GCPE
The Political Economy
of Extractivism
Global Perspectives on the Seduction of
Rent
Edited by Hannes Warnecke-Berger

and Jan Ickler
First published 2024
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© 2024 selection and editorial matter, Hannes Warnecke-Berger and
Jan Ickler; individual chapters, the contributors
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-1-032-30058-0 (hbk)
ISBN: 978-1-032-30059-7 (pbk)
ISBN: 978-1-003-30326-8 (ebk)
DOI: 10.4324/9781003303268
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by SPi Technologies India Pvt Ltd (Straive)
Contents
List of Contributors vii
Introduction: The Political Economy of Extractivism 1

HANNES WARNECKE-BERGER AND JAN ICKLER
PART I
Global Configurations 15
1 Trade, Unequal Specialization, and the Persistence

of Extractivism 17
HANNES WARNECKE-BERGER
2 Rent, Profit, Mass Consumption, or the Political

Economy of Taming Rent 42
HARTMUT ELSENHANS
PART II
Actors, Strategies, and the Politics of Rent 65
3 Uganda’s State Class and the Politics of Oil 67

JULIAN FRIESINGER
4 Extractivism and the Resurgence of the Agrarian Elite:

The Case of Coal Mining in Cesar, Colombia 84
KRISTINA DIETZ
5 The Patronal Politics of Regional Development Projects:

Exploring Russia’s Far Eastern Rent Management 104
SEBASTIAN HOPPE
vi Contents
6 Patronage Networks and the Hope for a Better Future:
Coal Mining in Indonesia 123
KRISTINA GROßMANN
PART III
Rent and Societies: Legacies, Trajectories, and Inertias 137
7 Analyzing Rentier Societies: The Case of Venezuela 139

STEFAN PETERS
8 Wasn’t the AKP a Developmental Coalition? The Shifting

Political Settlement of the AKP 162
LUDWIG HEHL
9 Resource Boom and Social Policy in Authoritarian Regimes:

A Case Study of Russia 181
HEIKO PLEINES AND ANDREAS HEINRICH
10 Rents Hinder Capitalism: The Rentier Middle

Classes in the Middle East 199
RACHID OUAISSA
Conclusion: Extractivism and the Seduction of Rent 215

JAN ICKLER AND HANNES WARNECKE-BERGER
Index 223
Contributors
Kristina Dietz, Dr., Professor of International Development at the University of

Vienna
Hartmut Elsenhans, Dr., Emeritus Professor of International Relations at the
University of Leipzig
Julian Friesinger, PhD student at the University of Bremen.
Kristina Großmann, Dr., Professor for Anthropology of Southeast Asia at the
University of Bonn
Ludwig Hehl, PhD student at the University of Kassel
Andreas Heinrich, Dr., Senior Researcher at the Research Centre for East
European Studies at the University of Bremen.
Sebastian Hoppe, PhD student at the Free University of Berlin
Jan Ickler, PhD student at the University of Kassel.
Rachid Ouaissa, Dr., Professor of Politics of the Middle East at the Philipps-
University of Marburg
Stefan Peters, Dr., Professor of Peace Studies at the Justus-Liebig-University of
Gießen
Heiko Pleines, Dr., Professor of Comparative Politics at the University of Bremen
Hannes Warnecke-Berger, Dr., coordinator of the collaborative research pro-
ject www.extractivism.de and Senior Researcher at the Institute of Political
Science at the University of Kassel
Introduction
Hannes Warnecke-Berger and Jan Ickler
Extractivism is big business. The extraction and export of natural resources1 con-
tinue to shape the lives of a substantial share of the world population. Today, more
than 100 economies in the international division of labor have specialized in
exporting raw materials, minerals, fossil fuels, and agricultural products (United
Nations Commission on Trade and Development 2019). However, extractivism is
not only connected to the production and export of natural resources but also
linked to issues of distribution. Flows of raw materials reflect the North-South
divide: energy transitions in the Global North and efforts to industrialize and catch
up in economies like China or India lead to a rising global raw material demand.
This demand tends to amplify and deepen existing patterns of extractivism while
also opening spaces for new extractivist practices (Warnecke-Berger, Burchardt,
and Ouaissa 2022). Thus, extractivism is continuing its own history.
After 1945 and during decolonization, many political leaders have begun associ-
ating increasing revenues from raw material exports with enormous hopes for eco-
nomic and social development. Because natural resource exports promise windfall
gains, they have become synonymous with national progress. Thus, a development
myth based on natural resources has emerged, nourishing the drive toward national
self-determination over raw material deposits. This myth materialized in claims
initially discussed at the Havana and the Bandung Conferences in 1948 and 1955,
laying the ground for United Nations (UN) resolution 1803 in 1962 regarding the
permanent sovereignty over natural resources. The myth also led to intense discus-
sion over a New International Economic Order during the 1970s. Since then, this
myth has repeatedly been linked to the idea that the international transfer of money
from rich to poor countries would propel development.
Consequently, the call for better prices for natural resources on the world mar-
ket has become a central political claim.2 Better prices also regularly stir up expec-
tations to eventually overcome the dependence on natural resources by using
windfall gains for development policies. A diverse array of political couleurs from
left to right and authors ranging from Neoclassic over Neoliberalism to orthodox
Marxism have fallen prey to this myth of development. Nevertheless, extractivism
has turned out to be a very persistent phenomenon.
This persistence is surprising due to a number of reasons. First, extractivism is
risky. Prices for raw materials are highly volatile. Intense boom periods with
DOI: 10.4324/9781003303268-1
2 Hannes Warnecke-Berger and Jan Ickler
increasing world market prices and revenues from natural resource exports – as the
world experienced in the decade after 2003 – are followed by dramatic busts due
to decreasing export earnings and shrinking quantities sold when prices fall sharply
(Williamson 2012; van der Ploeg and Poelhekke 2009). International price volatil-
ities also translate into recurrent domestic crises, threatening to wipe out achieve-
ments of high-price periods. Second, extractivism is dirty. Natural resource
exploitation and processing deeply intervene in nature (Bardi 2014; Carter and
Wynn 2020; Dunlap and Jakobsen 2020). Deforestation, oil spills, and a remarka-
ble carbon footprint are the main concerns of a growing body of literature on the
topic. In addition to ecological threats, extractivism has serious social and health
effects on the local populace. This discussion has grown further and taken on more
importance as it links resource extraction to socio-ecologic conflicts and civil wars
(Conrad et al. 2019; Billon and Philippe 2001). Third, extractivism is contested.
Governments, often together with transnational corporations (TNCs), push for
deepening and expanding extraction (Kirsch 2014; Welker 2014). Social move-
ments, in contrast, are engaged in changing the course of extractivism. The result-
ing social conflicts over extractivism can disrupt entire societies and often threaten
to erupt into violence (Kröger 2021a; Menton and Le Billon 2021; Neville 2021;
Shapiro and McNeish 2021; Dietz and Engels 2017). These contrasting approaches
underline that extractivism is prone to crises, suggesting that it should collapse one
day because of its political and economic contradictions, environmental barriers,
or being overcome through intelligent policies.
Why has extractivism been such a persistent phenomenon despite these negative
consequences? The literature provides two different sets of answers to this ques-
tion. The first set focuses on the external conditions that force countries to adapt
to extractivism. As the demand for raw materials stems from only a few countries –
the Global North, China, and India, precisely where the mining companies have
their headquarters – many authors relate extractivism to imperialism (Veltmeyer
and Petras 2014; Brand and Wissen 2013). In resemblance to discussions of the
dependency theory, this view contends that global capitalism forces societies of the
Global South3 to provide raw materials for the centers of industrial production in
the Global North. Capitalism would create dependent social structures and class
configurations in resource-exporting countries (Dunlap and Jakobsen 2020; Amin
1973; Cardoso and Faletto 1979; Palestini and Madariaga 2021). This reasoning
also highlights the colonial legacies of raw material exports (Acosta 2013), stressing
global power hierarchies and linking natural resource exploitation to neocolonial
practices (Joseph 2019; Kröger 2021b). These approaches mostly point to exoge-
nous causes for the rise, the dynamics, and the persistence of extractivism in coun-
tries of the Global South. The second set of answers focuses more on the domestic
roots of extractivism. Neoclassical and institutionalist approaches highlight endog-
enous factors that led to the rise, demise, and/or overcoming of extractivism (Auty
and Furlonge 2019; Ross 2012; Auty 2001). This answer relates the persistence of
extractivism to weak institutions (Acemoglu and Robinson 2013), to the behavior
of elites (Pritchett, Sen and Werker 2018; Amsden, DiCaprio, and Robinson
2012), or to malfunctioning markets that allow rent-seeking in the first place (Kadt
and Simkins 2013). Whereas the first answer focuses primarily on international
Introduction 3
relations of power and exploitation and tends to ignore internal causation, the
second is precisely the opposite. Here, domestic structural features are seen as
general explanatory factors, but exogenous factors, i.e., external to the cases, are
ignored.
This book aims at rebalancing these opposing approaches. In doing so, it draws
a nuanced picture of the persistence of extractivism. It takes up the need for ana-
lyzing the interplay between international factors and domestic conditions in
countries of the Global South. In doing so, this book pursues three concrete
objectives that the remainder of this introduction will present:
• First, we bring together case studies from different world regions to offer a
genuinely global perspective on the topic. This perspective allows us to create
discussions among area specialists and contribute to a trans-regional and global
debate.
• Second, going beyond the regionalized literature, we want to create a common
ground for future discussions. We propose a political economy approach to
extractivism and discuss the concept of rent. Although the literature on
extractivism often mentions this concept (Vergara-Camus and Kay 2017;
Rosales 2016; Tetreault 2020; Gudynas 2020), the role of rents is still
underestimated.
• Third, this allows us to elaborate on a shared understanding and definition of
extractivism and to take a closer look at the internal working of extractivism
as a persistent development model in the current world economy, in which
the seductive power of rents is crucial.
In pursuing these three objectives, we lastly want to shed light on the following
dilemma that posits a challenge to many countries of the Global South: creating a
sustainable future necessarily means overcoming extractivism. Thus, at one point,
windfall earnings from resource exports have to be used to eradicate extractivism
and enable alternative development strategies (Addison and Roe 2018). However,
intensifying extractivism to make the necessary financial resources for this endeavor
available tends to reinforce existing structures. As extractivism and the underlying
economic rents remain seductive, intensifying extractivism might not lead to alter-
native development models. More often than not, and despite numerous efforts,
history shows that extractivism persists.
Regionalized Discussions on Extractivism

The first objective of this volume is to bring together regional accounts of extrac-
tivism to establish a global perspective. As of yet, the literature on extractivism is
highly regionalized, and cross-area research remains relatively scarce (e.g.,
Bebbington et al. 2018). While extractivism has provoked many studies within
particular world regions investigating the detailed working of raw material produc-
tion and export, cleavages between different research communities are visible.
Different disciplines, such as economics, social sciences, and history, have widely
debated natural resource-driven development, in which contrasting theoretical
approaches and methodological toolkits compete. However, these various fields of
inquiry remain disconnected and even depart from one another. As development
studies increasingly turn toward area studies, so does the conceptualization of their
observations. On the one hand, local, national, and regional particularities are
often subordinated to large-N statistical studies focusing on robust economic
growth correlations, institutional strength, or political regime types. However,
regional perspectives on extractivism have developed independently within area
studies, leading to exciting and often complementary conceptual approaches.
In Latin America, the concept of neo-extractivism has flourished since the com-
modity boom in the early 2000s (Burchardt and Dietz 2014; Burchardt, Dietz, and
Warnecke-Berger 2021; Gudynas 2016; Acosta 2013; Veltmeyer and Petras 2014;
North and Grinspun 2016; Deonandan and Dougherty, 2019). Neo-extractivism
refers to natural resource export strategies paralleled with increasing social spend-
ing, particularly for marginalized groups. Neo-extractivism is often associated with
left-wing “pink tide” governments and their reformist – sometimes revolutionary –
claims. However, rather than diversifying exports and dynamizing the domestic
economic structure, this “commodity consensus” (Svampa 2015) led to the re-
primarization of exports (Cypher 2009) and increasing dependence on raw mate-
rials coupled with higher levels of redistribution of natural resource revenues.
In the Middle East and North Africa, both state-class theory (Elsenhans 1996) and
the rentier state concept have been attracting attention for some time. Introduced
by Mahdavy (1970) and popularized by Beblawi and Luciani (1987), rentier state
theory focuses on political regimes in oil-exporting countries. It relates the strong
dependence on oil exports to barriers to economic development and shows that
this dependence shapes political regimes, including a certain tendency toward
authoritarianism. The state-class theory further expands its focus on state-society
relations and recently pointed to middle-class dynamics in shaping the outcomes
of the Arab Spring (Ouaissa 2014).
In the post-soviet region and Central Asia, and particularly in Russia and Kazakhstan,
where the exploitation of natural gas is paramount, the concepts of “patrimonial
capitalism” (Schlumberger 2008) and “rentier capitalism” (Sanghera and Satybaldieva
2021) have become prominent. They describe an inevitable fragmentation of cap-
italist practices and entanglements with clientelism, bribery, and other forms of
corruption. Here, and against the conceptualizations in Latin America and the
Middle East and North Africa, the analysis of the economic system, as well as
geopolitics, is at the forefront. The concepts delineate the long process of author-
itarian regimes rising to competition on the world market due to commodity
exports (Heinrich and Pleines 2015). As a result of this integration into the world
market, the economies of patrimonial states need to adapt to a changing environ-
ment in which “strong states” are empowered to redistribute the revenues from
commodity exports but need to accept a certain degree of competition on external
markets (N. Robinson 2011).
The discussion on sub-Saharan Africa seems to be much more focused on polit-
ical regimes than on their economic foundations (but see Saunders and Caramento
2018). Notably, the concept of neopatrimonialism (Erdmann and Engel 2007;
Mkandawire 2015) plays a pivotal role. At its center is the concentration of power,
Introduction 5
which often remains in the hands of a single president and focuses on channeling
state resources into political legitimacy. Many authors use the concept to explain
why sub-Saharan Africa has economically underperformed during the last several
decades, particularly emphasizing the low capacity of states to collect taxes or the
siphoning of surplus in order to fuel clientelism and patronage (van de Walle 2001).
In sum, while each of these approaches highlights essential factors in explaining
the depth of extractivism, they only rarely speak to each other. For instance, the
discussion on extractivism in Africa often leans on the experiences of “develop-
mental states” (Haggard 2018) in Southeast and East Asia, somewhat neglecting
Latin America. The discussion in Latin America, in turn, largely ignores African
as well as Central Asian contributions to the debate. These competing approaches
almost exclusively focus on a partial set of variables within specific regional back-
grounds, highlighting regional articulations of the state and political institutions,
culture, identity, and economic factors. A comparative view of different regional
experiences and a cross-area perspective on extractivism are still lacking.
These approaches indeed support the idea that extractivism is a persistent feature
despite the recurrent crisis tendencies. Self-enrichment of the few and defending
the political status quo seems to outperform long-term improvements for the
masses. Extractivism and its underlying logic turn out to be seductive. Thus, what
often starts as a development strategy that channels raw material money into devel-
opment usually becomes problematic. Rather than diversification and auto-centric
development with broad popular support, clientelism, elite power, non-democratic,
and even authoritarian rule prevail and grow stronger.
The Internal Dynamics of Extractivism: Rent

The second objective of this book is to learn from these different and highly
regionalized approaches and contribute to an ongoing discussion about the inter-
nal dynamics of extractivism. This, of course, depends foremost on definitions. For
instance, the UN Commission on Trade and Development (2021, v) defines
resource dependence and extractivism as an export share of natural resources on
total exports of at least 60 percent. Gudynas (2020, 6), advancing from this con-
cept, defines extractivism based on three criteria: high volumes of extraction, no
local processing, and the exportation of at least 50 percent of natural resources.
This definition focuses on intensity, quantities, and the process of extraction.
However, the view of the qualitative depth of extractivism is somewhat confused.
Such accounts merely take an epiphenomenon as the starting point, usually export
dependence.
In contrast, we contend that extractivism should be relinked to its specific qual-
ities, focusing on two dominant logics: (1) the enclave character of extractivist
economies and (2) modes of appropriation and redistribution of resource revenues.
Regarding the first logic, extractive sectors form small enclaves, isolated, often
remote, and disconnected from other economic activities. This enclave character
not only refers to the place of resource production itself but also considers the gen-
eral economic structure. While the extractive sector usually contributes significantly
to the gross domestic product and total exports, it adds little to employment (Ericsson
and Löf 2018). Many net-raw material exporting countries are trapped in a struc-
tural and stable un- and underemployed equilibrium in the domestic sphere.
Regarding the second logic, extraction is also linked to the multiple processes of
appropriation and redistribution of wealth emanating from natural resources (Ye
et al. 2020). This second logic potentially dominates extractivism in economic,
political, social, and cultural terms (Mezzadra and Neilson 2017). Both logics
highlight the relevance of economic structures and configurations of actors
involved in and benefiting from extractivism. Moreover, they point to the neces-
sity of a macro concept that can relink both logics.
We argue that the concept of rent achieves precisely linking both logics. Rents
are a particular form of economic surplus. In contrast to capitalist profit that
depends on net investment and market mechanisms, especially competition, rents
cannot be appropriated through market mechanisms (see also the contribution by
Hartmut Elsenhans in this volume). They can only be siphoned off through polit-
ical mechanisms.4 Rents, then, imply a natural or political monopoly that prevents
the production of the same good with the same means more efficiently at lower
prices. We, consequently, propose that actors in such societies appropriate rents
because of their control of market restrictions, monopolies, or political power
(Warnecke-Berger 2021).
The literature regularly tends to understate or even ignore the formative impact
and the social embeddedness of rents. Prevailing perspectives focus on the presence
and/or absence of natural resources, equaling rents with certain raw materials,
commodities, and natural resources (Warnecke-Berger 2022). Terms such as “oil
rent” or “copper rent” are showcases of these imprecisions. We, in contrast, empha-
size the relative distance between the production process, hence the extraction of
natural resources in the narrower sense, and the realization of rents in monetary
terms, which mostly happens on international markets. Therefore, the source of
rent and its multiple forms of appropriation need to be carefully distinguished.
While rents create autonomy from diverse economic, social, and political con-
straints, they encourage agency, at least for those who decide on the course of
extractivism. Rents tend to nourish the image of a positive-sum game for all play-
ers involved. Consequently, different actors and social groups engage in alli-
ance-building and social conflicts to organize access to rent. For their legitimization,
political actors may choose the redistribution of rents. Thus, the dominance of
rent influences actors’ strategies, institutional settings, and class configurations.
Societies in which rent is ubiquitous are characterized by centralized access to
surplus, often through and by the state. The control, appropriation, and redistri-
bution of rent are highly interwoven with political power and often even with
violence (Warnecke-Berger 2018). Political accountabilities tend to be rather ver-
ticalized, and elite rule becomes strengthened.

The third objective of this volume is to establish a common conceptual ground for
analyzing extractivism. Our theoretical focus on rent elaborated on earlier allows
us to define extractivism in qualitative terms. Accordingly, extractivism means that
Introduction 7
rents dominate society’s surplus structure. In this regard, rents influence and even
dominate the social reproduction of extractivist societies in all its facets.5 Following
this perspective, the qualitative significance of rent is the defining factor of extrac-
tivism. Rents also open windows of opportunity for development; they influence
economic structures and impact political processes, responsibilities, and (national)
identities.6 However, rents are seductive, and actors regularly choose to maintain
the rent flows and neglect to follow alternative strategies to abandon extractivism.
In its totality, we understand extractivism as a development model that shapes
entire societies rather than singular economic sectors. In our perspective, thus,
extractivism is defined by three interlinked phenomena: (i) export specialization
on raw materials, (ii) surplus structure dominated by rent and the appropriation of
rent, and (iii) the social reproduction being dependent on rent. This definition
provides several advantages: first, it introduces the concept to an interdisciplinary
field of research and formulates a veritable political economy perspective that
engages in discussion with economics, political science, sociology, and anthropol-
ogy.7 Second, the definition shifts the focus toward elaborating on the underlying
drivers of extractivism – hence on mechanisms and forces – rather than scrutiniz-
ing the surface appearances of extraction. Third, this perspective allows us to relink
the concrete sites where extraction happens on the ground with broader societal
dynamics that are not directly linked to extraction. Finally, this perspective permits
us to re-approach the continuities and changes of extractivism and illuminate why
extractivism proves so persistent.
Persistence of Extractivism and the Seduction of Rent: Cases

Presented in this Volume
Following our definition of extractivism, this book presents several case studies on
extractivism in different world regions. In reference to the literature, they show
that extractivism materializes in variegated political measures on different scales
(such as local, national, or regional development plans). Additionally, different
extractivist societies feature particular institutional settings (e.g., statehood, tax
regimes, currency exchange regimes, resource management and resource nation-
alism, property rights regimes). They portray various configurations, alliances, and
conflicts between actors (such as state actors, political parties, labor unions, interest
groups, national enterprises, TNCs, civil society movements, and nongovernmen-
tal organizations).
Furthermore, the cases presented in this volume delve into different factors,
conditions, and processes that render extractivism persistent. The contributions
employ different methodological and theoretical perspectives, focusing on rents
and their impact on societies, actors, policies, and institutions. In this regard, they
collectively contribute to uncovering the concrete ways in which the seductive
power of rents unfolds and how rents accruing from natural resources shape socie-
ties in the Global South at different times. The presentation of cases is structured
in three blocks. The first one is devoted to introducing global conditions for
extractivism from a rent-theoretical perspective. How are rents from exporting
natural resources linked with specialization patterns of economies in the Global
South? What are possible ways for extractivist societies to overcome the depend-
ence on rent? In his chapter, Hannes Warnecke-Berger analysis first the specializa-
tion on natural resource exports by using a neo-Keynesian and neo-Ricardian
framework. The chapter shows how historically, the emergence of rents in the
international economic structure pushes economies to specialize in raw material
exports. By covering the last 80 years, Warnecke-Berger shows the persistence of
extractivism and rents. Hartmut Elsenhans picks up this threat by discussing the
formative power of rents on resource-exporting countries of the Global South –
including the emergence of state classes. His chapter then portrays the internal and
external conditions under which development, in the sense of overcoming rent,
might be possible. In doing so, Elsenhans mixes a thorough theoretical considera-
tion of rent with illustrative examples from all over the world, arguing that cleverly
designed development policies that use natural resource rents to overcome them
might prove a solution for transitioning out of extractivism – although this path is
highly unlikely.
The book’s second section sheds light on domestic configurations in extractivist
countries. This includes an analysis of actors and their strategies that shape and are
shaped by extractivism. The individual contributions show how the seduction of
rent plays out at different scales and is affecting development coalitions, govern-
ments, workers, and class relations. As a rather atypical case in this selection, Julian
Friesinger focuses on Uganda, featuring a political configuration in which natural
resource rents have not become dominant yet. The chapter shows how the pro-
jected revenues from freshly found oil deposits begin to shape the expectations for
development and how the to-be-expected rents influence the relations between
different actors. In this way, the Ugandan case sheds light on the moment of a
lock-in on the natural resource-riven development model and how the conflicts
around future rent evolve even before natural resource exports are started. Kristina
Dietz engages with a similar topic: the relationship between different classes in
changing rent flows. The chapter deals with the strategic adaptation of traditional
land-based elites in Colombia in the face of new economic challenges. The chap-
ter demonstrates how elites might choose to change from one rent source to
another. In the study of Dietz, this is forgoing traditional lad-based-revenues for
acquiring new ones in the context of Colombia’s coal mining boom. The contri-
bution shows that even if economic activity changes, e.g., from agriculture to land
speculation, elites tend to stabilize extractivist patterns.
While the case of Colombia emphasizes the role of elites, Sebastian Hoppe, in
his chapter about rent management in Russia, directs the reader’s attention to
patronage client relationships and the state. His contribution analyzes the Russian
rent-led development strategy by focusing on newly planned and established ship-
yards. Hoppe investigates the dynamic between different strategic groups inside
the Russian developmental state and how natural resource rents are managed to
propel development. In doing so, this chapter unravels the distinct logic of patron-
age, as well as the aspect of foreign and military policy. In the last contribution of
block three, Kristina Großmann switches the scale of analysis by focusing on coal
workers and their families located in patronage networks in Indonesia. She links
the revenues generated by the countries booming coal industry to the everyday
Introduction 9
livelihoods of the people affected. Her contribution shows how parts of the pop-
ulation that, while directly affected by the negative consequences of extractivism,
can be co-opted by receiving parts of the rent. Thus, Großmann expands on the
dimension of seduction of rents by including the following.
The authors in the third bloc of the book demonstrate to what extent extractiv-
ist societies are reproduced by rent. This concept of the rent-based society provides
insights into the social, economic, and cultural mechanisms that tend to stabilize
extractivism. Stefan Peters chooses one of the posterchild of extractivism in Latin
America, Venezuela, to illustrate this hypothesis. In his chapter, Peters covers
Venezuelan extractivism from a historical perspective, demonstrating the long-
lasting impact oil exports and the accompanying rent had on Venezuelan society.
He identifies political, social, and cultural causes for the persistence of extractivism
and the mechanisms by which the population could be integrated into the devel-
opment paradigm. Heiko Pleines and Andreas Heinrich introduce a different facet
of the seduction of rent. Unlike Venezuela, they show with regard to Russia that
integration of the population through social policies in Russia is not as responsive
as assumed by existing theoretical and empirical approaches.
Thus, while the seduction of rent is still the case in Russia, the channels of this
seduction vary. In exemplifying their argument, Pleines and Heinrich also refer to
the role of political ideology as a means of integrating the population into a devel-
opment project. In Turkey, a developmental coalition that could push through rent
management patterns leading to industrialization failed. Ludwig Hehl analyzes this
case by highlighting the importance of sound and working alliances between
development coalitions and other social forces. In doing so, Hehl identifies the
seductive force of rents as a limiting factor to crafting such alliances. The chapter
demonstrates that, although a developmental coalition might be strong enough by
itself, the logic of rent can render development projects impossible due to missing
inter-class relations. Middle classes are often seen as essential for modernization,
democratization, and economic growth. In his contribution, Rachid Ouaissa, by
describing the role of the middle classes in Maghreb and Egypt, shows how these
societies have depended on the logic of rent. Rather than a modernizing factor,
natural resource-driven development gave direction to conservative, passive mid-
dle classes that allied with the rent-distributing elites.
The contributions of this volume show that the seduction of rent is manifold.
However, the mechanisms of this seduction and individual facets of certain actor
constellations, elite strategies, and state institutions are similar. We perceive the
logic of rent to be the connecting factor. The last chapter of this volume, apart
from working as a conclusion, develops this idea further.
Notes
1 There is no finally shared definition of natural resources, raw materials, and primary
commodities. The following definition, therefore, servers as a starting point: natural
resources are unprocessed materials that potentially serve living beings to manage their
existence and livelihood. Raw materials are part of natural resources that are further
processed to enter production and consumption eventually. Primary commodities, in
turn, are raw materials that are (internationally) traded and therefore commodified.
2 This line of argument, focusing on unfavorable price developments for primary com-
modities and declining terms of trade, was discussed relatively early (Singer 1950;
Prebisch 1962). A large body of empirical literature has since attempted not only to
research the evolution of the terms of trade but also to explain the causes for their
volatility, as well as their deterioration. Furthermore, these arguments played a crucial
role in development strategies such as import substitution (Ahmed 1989).
3 In this introduction, the meaning of “Global South“ is guided by the considerations of
Dados and Connell (2012).
4 At the same time, rents appear as a particular form of income following standard text-
book descriptions on the micro-level: those who control rents can freely use them. This
might lead to economic sectors and parts of the population being dependent on rent
transfers, often imprecisely described as market distortion.
5 The connection between rent and social reproduction links to the debates put into the
discussion by the feminist political economy (Bakker 2007).
6 However, we cannot deduce actual development strategies, relevant actor constella-
tions, and their choices from the existence of rents. As rents do not automatically
end up in the pockets of the powerful, actors need to appropriate rents to use them.
Thus, the mode of appropriation is crucial and can be specific to different
countries.
7 On the one hand, this discussion revolves around the surplus structure of entire socie-
ties. This includes the income of individuals but further points to the need for analyz-
ing the market process, including the market’s mechanisms to exploit, use, and reinvest
surplus. On the other hand, it has to focus on the non-market sphere and mechanisms
that allow for appropriating economic surplus by circumventing, uncoupling, block-
ing, or even abolishing the market (Warnecke-Berger 2022). The approach then opens
the debate for the detailed experiences that area studies have and still produce on the
topic.
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Introduction
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ROUTLEDGE - The Political Economy of Extractivism

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The Political Economy of Extractivism

Hannes Warnecke-Berger is coordinator of the collaborative research project

Jan Ickler is a PhD student at the University of Kassel.

Taxation and Inequality in Latin America

The Political Economy of Extractivism

For more information about this series, please visit: www.routledge.com/Global-

Edited by Hannes Warnecke-Berger

List of Contributors vii

Introduction: The Political Economy of Extractivism 1

1 Trade, Unequal Specialization, and the Persistence

2 Rent, Profit, Mass Consumption, or the Political

3 Uganda’s State Class and the Politics of Oil 67

4 Extractivism and the Resurgence of the Agrarian Elite:

5 The Patronal Politics of Regional Development Projects:

7 Analyzing Rentier Societies: The Case of Venezuela 139

8 Wasn’t the AKP a Developmental Coalition? The Shifting

9 Resource Boom and Social Policy in Authoritarian Regimes:

10 Rents Hinder Capitalism: The Rentier Middle

Conclusion: Extractivism and the Seduction of Rent 215

Kristina Dietz, Dr., Professor of International Development at the University of

Regionalized Discussions on Extractivism

The Internal Dynamics of Extractivism: Rent

The Political Economy of Extractivism

Persistence of Extractivism and the Seduction of Rent: Cases

Trade, Unequal Specialization, and the Persistence of Extractivism

Rent, Profit, Mass Consumption, or the Political Economy of Taming

Uganda's State Class and the Politics of Oil

Extractivism and the Resurgence of the Agrarian Elite

The Patronal Politics of Regional Development Projects

Patronage Networks and the Hope for a Better Future

Analyzing Rentier Societies

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