Chile kept the state it built. Venezuela lost the one oil had given it.<\/p>\n<\/div>\n
We have run this experiment before, and we know how it can go.<\/p>\n
Start with Venezuela \u2014 the cautionary tale, though not for the reason most people know about. Oil wealth did not curse the state; in fact, hydrocarbons brought political modernization to the caudillo state. The anthropologist Fernando Coronil called it the magical state<\/a><\/em>: a government that seemed to conjure modernity straight out of the ground, paying for highways and universities and, above all, underwriting a pacted democracy in which two parties managed the terms of politics for four decades. For a long stretch it worked \u2014 oil built real state capacity, financed expensive infrastructure and grand industrial ambitions, and that same capacity underwrote a functioning, if tightly controlled, democracy. What broke it was not the oil but the weakened political will to undertake difficult reforms when there was plenty of time and resources. When the model was liberalised through the 1980s and 1990s and the state\u2019s role dismantled, the old pact lost its legitimacy and unravelled into the crisis. The societal rejection to party politics was underpinned by caracazo protests, whereby people went to the streets to reject narrow democratic practices. Ironically, this was the origins of a movement that produced Chavismo \u2014 and, eventually, the patrimonial hollowing that finished the job. The moral runs opposite to the folk version of the resource curse: Venezuela\u2019s tragedy is not that oil made a strong state impossible, but that a state oil had made strong was taken apart.<\/p>\n Now set Chile beside it. Chile mines more copper than anyone on earth \u2014 I\u2019ve followed its copper politics since my first fieldwork in 2009 \u2014 and it has spent fifty years keeping the state in the game, most visibly through Codelco, the state copper company that even the Pinochet dictatorship left in public hands. As lithium becomes the mineral everyone wants, Chile has done something quietly revealing. Rather than nationalising by decree, or auctioning the deposits to the highest bidder, it has used a simple fact \u2014 that the state owns the subsoil \u2014 to turn the expiry of mining leases into leverage, and struck a lithium partnership in which the state stays a player, not a spectator.<\/p>\n That sounds technical. It is the whole point. Chile\u2019s resource nationalism<\/a> runs through contract administration, not expropriation \u2014 a form of power available only to a state with the capacity to write, monitor and enforce complex deals across decades. It is no fairy tale. The fights in the Atacama over water and consent are real and unresolved. But it is a different trajectory from Venezuela\u2019s, and the difference is not the mineral. It is the state. Chile kept the state it built. Venezuela lost the one oil had given it.<\/p>\n This is the argument at the centre of the chapter I\u2019ve just finished with my collaborator Jos\u00e9 Carlos Orihuela, for the SAGE Handbook of Democratization. We give the thing worth aiming for a name \u2014 resource democracy<\/strong> \u2014 a way of governing extraction in which the decisions that matter (who digs, who benefits, who is left with the poisoned water) are genuinely accountable, rather than handed down by an executive or a boardroom. In truth it is an old idea for me. More than a decade ago, in my first book, Jean Grugel and I argued that resource booms are at heart a question of citizenship<\/a> \u2014 who counts as a stakeholder, who is owed a say, who carries the costs. Resource democracy is where that thread leads once the energy transition makes it urgent again.<\/p>\n If you want to know what kind of state you are actually dealing with, look at how it taxes. Not just how much, but who pays and how: whether the fiscal burden falls on a state enterprise or on foreign capital, whether royalties are transparent or negotiated behind closed doors, whether citizens are taxed and represented or simply handed a share of the rent to keep them quiet. Taxation is where the social contract is written. And that is why resource democracy is not something you bolt on after the fact \u2014 a little consultation here, a community fund there. It is constitutive<\/em> of how resources are governed in the first place. The ownership model, the fiscal rules, and the terms of consent are not the packaging around resource governance. They are the thing itself.<\/p>\n Resources are neither a blessing nor a curse. They are a test of the state.<\/p>\n<\/div>\n The history is humbling on this. You do not get resource democracy from owning the right resources, or from flying the right ideological flag. Left governments have hollowed out states as thoroughly as right ones. Bolivia and Ecuador wrote radical, participatory constitutions recognizing the so-called right of nature in the 2000s. And then, their governments found them inconvenient the moment the budget depended on drilling. Resources, in the end, are neither a blessing nor a curse. They are a test of the state.<\/p>\n![\"\"](\"https:\/\/substackcdn.com\/image\/fetch\/$s_!MFYz!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F38005cbc-256a-4a85-ab1f-1e9227cc18ea_960x478.jpeg)
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