Prices, Politics, Institutions: Oil Exporters in the International Economy

Kiren Chaudhry

Business and Politics, 1999, vol. 1, issue 3, 317-342

Abstract: This essay tests the hypotheses and claims of models of internationalization that draw on neo-classical trade theory. Using the influential Frieden-Rogowski model, it examines the responses of Iraq and Algeria to the oil price shocks of the 1980s and 1990s. The cases demonstrate that even the most basic assumptions and predictions of this economistic model are flawed. The Frieden-Rogowski model misrepresents the mechanisms through which price shocks are translated into policy, makes inaccurate predictions about how terms of trade affect policy or sectoral performance, fails to explain the duration of lags between price changes and policy changes, and neglects important differences in a variety of major outcomes. I argue that even in the very similar cases of Algeria and Iraq, policy changed not in response to domestic pressures generated from changes in relative prices, but as a result of a severe fiscal crisis that stripped both governments of their ability to protect domestic constituents from world prices.

Date: 1999
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:buspol:v:1:y:1999:i:03:p:317-342_00

Access Statistics for this article

More articles in Business and Politics from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().