Search citation statements
Paper Sections
Citation Types
Year Published
Publication Types
Relationship
Authors
Journals
MotivationThe need to diversify their economies is an enduring challenge for fossil fuel‐dependent countries, one which will become ever more important as the world seeks to decarbonize. But the conditions under which major oil‐producing countries (petrostates) seek to diversify their exports—and those under which their attempts succeed—are poorly understood.PurposeThis article tests competing explanations for the successes and failures of petrostates' export diversification.Methods and approachWe employ a comparative case study approach using qualitative evidence from two comparatively successful diversification cases—Egypt and Malaysia—and one less successful case—Kazakhstan—selected using a Theil index of export concentration.FindingsThe evidence indicates that Egypt and Malaysia's more successful outcomes stemmed more from necessity and policy design than from differences in domestic institutions and interests. All three countries were motivated to diversify by price volatility and declining revenues at various points from the 1980s to the 2000s and beyond, but reserve depletion was a greater threat in Egypt and Malaysia. As such, they adopted a more balanced approached to diversification, one that combined liberalization with state intervention.Policy implicationsThese cases suggest that petrostates may be willing and able to diversify as the global shift toward renewables raises the prospect of unburnable oil reserves. Petrostates can diversify efficiently by using a basket of policies that includes a mix of economic liberalization and government intervention to create investment and incentives in non‐oil tradeable sectors and nurture infant industries. Opposition to reforms in petrostates can be addressed by selectively compensating vested interests.
MotivationThe need to diversify their economies is an enduring challenge for fossil fuel‐dependent countries, one which will become ever more important as the world seeks to decarbonize. But the conditions under which major oil‐producing countries (petrostates) seek to diversify their exports—and those under which their attempts succeed—are poorly understood.PurposeThis article tests competing explanations for the successes and failures of petrostates' export diversification.Methods and approachWe employ a comparative case study approach using qualitative evidence from two comparatively successful diversification cases—Egypt and Malaysia—and one less successful case—Kazakhstan—selected using a Theil index of export concentration.FindingsThe evidence indicates that Egypt and Malaysia's more successful outcomes stemmed more from necessity and policy design than from differences in domestic institutions and interests. All three countries were motivated to diversify by price volatility and declining revenues at various points from the 1980s to the 2000s and beyond, but reserve depletion was a greater threat in Egypt and Malaysia. As such, they adopted a more balanced approached to diversification, one that combined liberalization with state intervention.Policy implicationsThese cases suggest that petrostates may be willing and able to diversify as the global shift toward renewables raises the prospect of unburnable oil reserves. Petrostates can diversify efficiently by using a basket of policies that includes a mix of economic liberalization and government intervention to create investment and incentives in non‐oil tradeable sectors and nurture infant industries. Opposition to reforms in petrostates can be addressed by selectively compensating vested interests.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2025 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.