Explaining hydrocarbon nationalization in Latin America: Economics and political ideology

Recent hydrocarbon nationalizations in Bolivia, Venezuela, and Ecuador have renewed debates about the dangers of radicals, populists, or leftists. But, while some of these presidents have acted aggressively towards multinational owners, as a group their policies have not differed greatly from non-leftists facing similar circumstances. To test our hypothesis, we provide a detailed three-variable coding of every Mexican and South American president (for all countries with oil resources), as well as a coding of their policies towards the hydrocarbons industry. The historical review shows that political leaders from all sides of the ideological spectrum have advocated, pursued, or sustained nationalizations, and thus there is no clear relation between these political labels and nationalization policies. An examination of two alternative hypotheses – timing and starting point – finds that while nationalizations and privatizations do come in bunches, the hydrocarbon policy and economic circumstances that presidents inherit are more likely to determine the policy that they pursue.