Beyond Oil Wealth: Resiliency of the Aliyev Administration in Azerbaijan

Abstract

In political science literature, many scholars highlight how natural resources, particularly oil, have often been more of a curse than a blessing for developing countries. The Dutch Disease phenomenon highlights that the rapid development of the natural resource sector leads to a decline in other sectors, primarily the manufacturing and agricultural industries. It also leads to currency appreciation, which makes a country's exports more expensive and less competitive in the global markets. Politically, developing countries with rich natural resources tend to be more authoritarian, and oil wealth contributes to the durability of authoritarian regimes. Many scholars have predicted that oil-dependent regimes would be vulnerable to oil price shocks and periods of declining production. However, examining the political trajectories of oil-dependent regimes during this period reveals that while some have experienced political instability and regime breakdown, others continue to remain in power. The literature on the politics of oil offers some insights into why certain regimes persist while others collapse during oil price shocks. However, the terminal decline in oil production is an emerging concept, and its political impact has received limited attention in the literature. In a case study of Azerbaijan, this dissertation aims to explain the durability of Ilham Aliyev's oil-dependent regime amid a terminal decline in oil production that started in 2010. Drawing on theories of how political institutions contribute to regime durability, this dissertation will highlight the role of the regime's ruling New Azerbaijan Party and its coercive institutions in maintaining power during this challenging time.