Oil and regime type in Latin America: Reversing the line of causality

In its first generation, the literature on the resource curse typically posited that resource dependence shapes a country's economy and politics. More recent work posits that the effects are mediated by institutions. We take this newer approach further by arguing that economic and political institutions not just mediate but actually shape resource dependence. Our focus is on performance across national oil companies (NOCs) in Latin America. We explain performance variation by invoking variations in regime and market features. NOCs that operate in contexts of greater independence from the Executive Branch (stronger checks and balances within and outside the sector) and greater market forces—though not necessarily private actor dominance—exhibit better performance. Institutions thus influence sector conditions, rather than the other way around. We advance this argument using original data from Colombia and Venezuela, and supplementary data from Mexico, Brazil, and Argentina. Our study focuses on the oil boom-bust cycle of 2003–2016.