Pathways to instability: How decreasing oil prices impact political stability in petrostates – Lessons from the 1980s oil glut

Abstract

Existing research has shown a correlation between lower oil prices and political instability in oil-rich countries. This paper examines the conditions under which declining oil revenues can contribute to political instability in such countries, with a focus on the impact of the 1980s oil glut on 29 oil-rich countries. Employing Qualitative Comparative Analysis (QCA), the study identifies three distinct pathways to political instability during this period. Each instance of political instability corresponded to a distinct causal configuration bringing together low oil abundance and high oil dependence with one specific political condition: either high clientelism, relatively high public service provision, or significant political freedom. The findings illustrate the complex interplay of factors that influence the relationship between declining oil revenues and political stability. While rooted in a historical context, the results offer insights for the future, as the global transition to renewable energy may similarly affect oil revenues, posing potential risks to political stability in oil-rich countries.