The Chad‐Cameroon pipeline project: A failed attempt to beat the resource curse

Anna Villumsen

Student thesis: Master thesis

Abstract

The thesis is a single case study of the World Bank’s oil extraction project in Chad called the Chad Cameroon Pipeline Project (CCPP). The Project was launched for Chad to export their oil. However, according to the Resource Curse theory, natural resource abundance such as oil often leads to negative development outcomes. The theory presents a number of economic- and political- mechanisms that link oil abundance to negative development outcomes. These are, inappropriate management of government finances; corruption; anti-democratic structures; and increased military pending. Therefore, the CCPP also had an objective to avoid these Mechanisms from materializing in Chad. It did so by trying to change the government policy in Chad so that the oil revenues would be directed in a developmental direction. However, the policies designed to avoid the Resource Curse did not work in Chad and the World Bank withdrew from the project. The objective of the thesis is to analyze why the project failed to avoid these mechanisms of the Resource Curse from materializing in Chad by addressing the research question, Why did the CCPP fail as a medium for avoiding the Resource Curse in Chad? To answer this question the thesis turns to African State Development theory that can inform the Resource Curse theory and explain the institutional reasons for why the CCPP failed to avoid it. In the analysis it is assessed how the Resource Curse policy recommendations were followed. Next it is analyzed to what extent the efforts to avoid each of the mechanisms of the Resource Curse failed. Last, the failure to avoid each of the mechanisms is analyzed from an African State Development theory point of view. This will give institutional explanations for why the mechanisms were not avoided. The findings thereby give institutional reasons for why the CCPP failed and at the same time they also inform the Resource Curse of why its policy recommendations were not suitable for the Chadian context. The conclusions of the thesis show how African State Development theory has informed the Resource Curse theory and its practitioners of why the policy recommendations were not successfully implemented in the Chadian context. It is found that specific Chadian institutional characteristics counteracted the effectiveness of the CCPP to avoid the mechanisms of the Resource Curse. For each of the mechanisms it is thus found that Chadian institutions worked against the policy recommendations suggested to avoid them. First, the economic mechanisms were not avoided by the policy recommendations of keeping oil revenues abroad in various savings funds. This proved to be impossible since the government depends on access to all state revenues and thus did all it could to gain leverage over the oil revenues. The African State Development theory characteristics privatization of power and the shadow state, which explains that power and influence must be bought, explains this. Second, the corruption mechanisms was not avoided due to the fact that the political elite of Chad depends on corruption as a means through which they conduct politics when trading in influence. This is also explained by the institutional characteristics of privatization of power and the shadow state. Third, the anti-democracy mechanism was not avoided because colonial and post-colonial legacies such as the use of violence as means to exercise power by the government has characterized Chadian rule since colonization. Furthermore, the democratic link of accountability between the government and the population, which oil is believed to weaken, has never been strong in Chad. This is also explained by institutional characteristics deriving from the history of Chadian state building such as lacking de facto structures like national feeling. Furthermore, politics in Chad have always been of an elite character where taxes for instance are used to oppress the population rather than creating accountability links between the government and the people. This made efforts to strengthen this link in order to avoid the anti-democracy mechanisms meaningless since the political elite has no interest in the development of such a link. Last, with regards to the military spending mechanism this was not avoided due to the regional character of the ongoing conflict between Chad and its neighbouring countries. This conflict calls for a constant military dependence, which will not disappear before the root causes of the conflict are addressed. According to African State Development theory the root causes for the conflict is to be found in the colonial legacy of weak borders that are difficult to control and the lack of de facto structures such as national feeling. These characteristics create inviting structures for rebel groups as they can get support from other countries and easily attract fighters with no cultural affiliation to their own government. The policy recommendations did thus not work as expected in the Chadian context because they were counteracted by institutional characteristics as suggested by African State Development theory. Therefore, Resource Curse was fulfilled and the oil is now playing a role of exacerbating the already existing development impeding structures that prevailed in Chad long before the introduction of the CCPP.

EducationsMSc in Business, Language and Culture, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2010
Number of pages80