LAUSR

Abstract This paper causally links petroleum dependence to political instability in developing countries through the three core characteristics of the rentier state—weak institutional capacity, a distributive political economy, and elite capture and predation. Traditional rentier state theory, centered primarily on the experiences of authoritarian, middle-income countries, holds that oil-rich regimes use their rents to secure political stability. By contrast, this paper argues that rentier practices can fuel rather than inhibit civil unrest in institutionally weaker developing countries. The causal pathway is demonstrated with field research-based process tracing of the case of Timor-Leste. There, the apparently benevolent distribution of petroleum rents has secured some dimensions of peace but has also activated new vectors of political instability. Moreover, the predatory capture by political–economic elites of an expanding rent share provokes societal grievance and potential instability on another front. Weak institutional capacity makes the state less able to deal with these elements of domestic unrest. A major implication of this research is that even where the other factors known to interact with oil wealth in fueling conflict are scarce, petroleum dependence itself could contribute to political instability as a result of the rentier effects it puts in motion.