The Domestic Political Conditions for International Economic Expansion

Abstract

The internationalization of emerging country national oil companies (NOCs) is one of the most surprising manifestations of state capitalism’s resurgence at the end of the 20th century. Existing research argues that structural changes at the international level and economic advantages at the domestic level created a uniform capacity across NOCs to internationalize in the 2000s. Yet, there is significant variation in the degree to which NOCs have expanded abroad. We argue that this cross-national variation is a product of two domestic political conditions: (a) whether the NOC emerged through a consensual or conflictual nationalization process and (b) whether NOC managers’ and the government’s interests regarding internationalization converged. We demonstrate our argument’s plausibility with three in-depth case studies—Brazil’s Petrobras, Mexico’s Pemex, and Venezuela’s PdVSA—and use three shadow cases—Columbia’s Ecopetrol, Malaysia’s Petronas, and Indonesia’s Pertamina—to explore its broader applicability.