The limits of OPEC in the global oil market
Abstract (© Jeff Colgan) :
Scholars have long debated the causal impact of international institutions such as the WTO or the IMF. This paper investigates OPEC, an organization that purports to have significant influence over the market for the world’s most important commodity, petroleum.
This paper conducts four empirical tests, and finds that OPEC has little or no impact on its members’ production levels. These findings prompt the interesting question of why so many people, including scholars, believe in OPEC’s influence over world oil supply. I argue that the idea of OPEC as a cartel is a “rational myth” that supports the organization’s true principal function, which is to generate political benefits for its members. One benefit it generates is international prestige. I test this idea using data on diplomatic representation, and find that OPEC membership is indeed associated with increased international recognition by other states. Overall, these findings help us better understand international regimes and the process of ideational change in world politics.
–> About this paper :
Is OPEC a Paper Tiger? A New Study Says Yes / Michael Levi, Energy, security, and climate, 23/05/2013 http://blogs.cfr.org/levi/2013/05/23/is-opec-a-paper-tiger-a-new-study-says-yes
We all know that OPEC colludes to keep oil off the market and prices high. Or do we? There is actually remarkably little agreement on whether OPEC is any good at what it aspires to do. Does membership in OPEC really make countries more likely to constrain their oil output? It’s a question with wide-ranging consequences for everything from the economy to security to climate change…