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DOI:
10.1080/03056244.2015.1049520
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Citation for published version (APA):
Phillips, J., Hailwood, E., & Brooks, A. R. (2016). Sovereignty, the ‘resource curse’ and the limits of good
governance: a political economy of oil in Ghana. Review of African Political Economy, 43(147), 26-42.
https://doi.org/10.1080/03056244.2015.1049520
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Sovereignty, the ‘resource curse’ and the limits of good governance: a political economy
of oil in Ghana
Jon Phillips, King’s College London, jonathan.phillips@kcl.ac.uk
Elena Hailwood, King’s College London
Andrew Brooks, King’s College London
Post-print version. For published version see DOI:10.1080/03056244.2015.1049520
Abstract
The idea of a resource curse has influenced policy makers and led to calls for good governance
to avoid the pitfalls of oil sector development. Through discussion of Ghana’s recent insertion
into the global political economy of oil, this paper describes the limits of the resource curse
framing and associated liberal institutional management approaches to the inherently political
nature of oil exploration and production. The paper describes ways in which sovereignty has
been exercised both in opposition to and in support of foreign capital, and the role of discourses
of ‘good governance’ in structuring the material politics of resource access.
Key words
Ghana; Good Governance; Oil; Political Economy; Resource Curse; Sovereignty
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Introduction
Within African Studies oil has come to be described as perhaps the most captivating and
fetishised commodity. An extensive body of work has been devoted to analysing the ways in
which the particular properties of oil engender ‘failed states’ (Karl 1997). Observations of
persistent underdevelopment and gross inequality in oil-rich states have evoked accounts in
which the very presence of oil is seen as a ‘resource curse’ leading to the corruption of state
institutions and individuals, macro-economic crises, and local and national conflicts (Ross
1999). The curse may manifest differently in varied contexts, but the literature has converged
around a similar set of political or economic issues, including: the appreciation of exchange
rates that accompanies growth in exports and undermines non-resource sectors such as
agriculture and manufacturing (the so-called ‘Dutch disease’); the perverse effects of windfall
rents and the development of unaccountable, rentier institutions of the state; and assessments
of correlations between economic growth and resource dependency (Sachs and Warner 1999).
If the resource curse can be broken, it is suggested, oil production may provide vital capital to
propel economic development. Much scholarly and policy attention has laboured over the ways
in which oil production may be disciplined via rational and appropriate governance. The
objective of this later work is to delineate strategies for managing oil such that often poor,
nascent producers may benefit. Metaphors of ‘curses’ and ‘blessings’ have been translated into
the technocratic language of economics and policy. In these accounts, politics is primarily a
technical factor in the management of resources and revenues. Associated policy prescriptions
couched in the discourse of ‘good governance’ focus attention on state institution building,
transparency and accountability of revenue management, involvement of civil society, and
prudent economic policies (World Bank 1997; 2013).
Oil is so closely associated with corruption and inequality in countries such as Nigeria, Angola
and Equatorial Guinea, that the idea of the resource curse has become a powerful narrative in a
number of new oil producing states in Africa, including Ghana. Through associated policy
prescriptions and interventions, the resource curse thesis has power not only as a set of
management norms, but as an ‘economic device’ that shapes how resource development is
constructed (Weszkalnys 2011). Oil discoveries bring an influx of not only major oil companies,
but also innumerable advisory bodies, donors, consultants and NGOs versed in the international
best practice of oil sector management. Through these actors, the resource curse thesis and its
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underlying economic theory are not simply applied un-problematically in new oil states, but are
adapted into existing political, economic, and socio-cultural environments.
The political currency of the resource curse mobilises a normative institutionalist discourse and
spreads liberal norms of economic and environmental governance, whereby the right institutions
and structures of management can create the conditions for transparent and accountable
resource management (see Williams 2010). Good governance comes to imply a limited role for
the state (World Bank 1997; Weiss 2000). Although good governance is understood in various
ways by different institutions, a fundamental problem lies in the narrow view of politics and
government. Little or no attention is paid to political interests and competition – within or outside
the state – which shape who wins and who loses from oil extraction. This managerial approach
is exemplified by voluntary good governance initiatives such as the Extractive Industries
Transparency Initiative (EITI). Herein lies an analytical problem of the resource curse thesis and
its political mobilisation to date: the tendency to address the spectre of resource determinism
through a form of techno-managerial solutions and principles of ‘good governance’.
In contrast, analyses of the context-specific political economies of oil have highlighted the
complex nature of oil governance in Africa in which local political dynamics, existing class
relations, and ‘resource violence’ are re-worked through the transnational business of oil
production (e.g. Le Billon 2008; Watts 2007). The more technocratic resource curse thesis has
remained focused on a national frame of analysis, and typically failed to offer nuanced analysis
of the complex political processes, structural relations of state, capital and class, and the
agency through which policies are designed, mediated and implemented (see Rosser 2006).
Consequently, what is often missing in policy debates over oil-led development is an
appreciation of the politics of production and resource control, which extends beyond territorial
borders of the nation-state or centralised governmental bureaucracies to include the global
political economy of oil (Bridge 2008). Given the status that Ghana holds as a haven of good
governance in Africa, its nascent oil economy provides a particularly relevant context in which to
explore forms of consensual ‘post-politics’ (cf. Swyngedouw 2011). That is to say, the formation
of a technocratic, managerial and consensus-seeking form of politics, with the foreclosure of
politics proper, understood as the opening-up of issues to conflicting views and alternative
social relations.
The failure of the World Bank in Chad to lever oil for development through targeted liberal policy
interventions is perhaps the most prominent example of an inability to grasp and transform the
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inherently political formations of oil (Massey and May 2005). Despite extensive mechanisms to
ensure government transparency and direct impositions of state sovereignty with respect to
revenue management, the World Bank’s interventions in Chad ended with negative social and
environmental impacts, conflict, and economic mismanagement that were shaped by pre-
existing power relations within and beyond the Chadian government (Carmody, 2009).
However, where Chad’s postcolonial history is marked by factionalism, instability and violent
conflict, and where the intractable oil politics of the Niger delta have rendered the space
‘ungovernable’ (Watts, 2004), the challenges facing Ghana are typically considered to be
different in ways that render oil inherently more manageable.
Based largely on partial accounts of structural adjustment programmes, Ghana has become a
poster child of the International Finance Institutions (World Bank 1993) despite continued
concerns over budget management. Advocates for the good governance of oil find cause for
optimism in Ghana on the basis of its democratic credentials. The suggestion is that Ghana can
succeed where others have failed, because unlike Chad, the Ghanaian polity is closer to a
Weberian rational-legal ideal, presiding over a formally liberal market economy marked by
respect for the rule of law; a history of democratic transitions of power; a stable parliamentary
democracy; and a ‘functioning’ civil society (e.g. Kopiński et al. 2013). The experiences of
adopting good governance reforms in the mining industry do not give rise to the same
confidence, having had a limited effect on the power held by transnational companies, or the
poverty experienced by mining communities (Bush 2008). If political economy is acknowledged
to influence the prospects of mishandling Ghanaian oil, it is through creating incentives for state
mismanagement of oil licensing and revenue collection, weak state capacity to develop and
enforce legal frameworks, limited parliamentary oversight, reckless spending, opportunities for
corruption and neo-patrimonialism, and a general lack of transparency (STAR-Ghana 2012).
In contrast to this liberal institutional framing, in the following account we build on a body of
literature that applies global political economy analysis to resource politics (Obi 2010; Watts
2004; 2007). All too commonly oil politics are reduced to determinant relationships between
resources and negative outcomes, and for which state-centric, national scale analysis has
proven inadequate in explaining the distribution of the costs and benefits of African oil. Oil
discoveries do not trigger the rupture in economic and social affairs that it is commonly
attributed to the resource. Rather, oil is typically merely an ‘idiom for doing politics...inserted into
an already existing political landscape of forces, identities, and forms of power’ (Watts 2004:
76).