Public–Private Partnering in Natural Resource Extraction

In the neoliberal era, the ability of business to shape public governance has been increased by both sector-specific regulatory regimes managed by firms and business associations and public–private partnerships (PPPs). In these processes, private (and often for-profit) entities voluntarily assume some degree of responsibility for the development, production, or delivery of public goods. PPPs oriented towards mitigating the social effects of global economic disparities first emerged in the context of public health, in the form of capital funds subsidizing costly high-risk pharmaceutical research undertaken by industry but intended to benefit the world’s poorest people.¹ The paradox of such public–private collaboration was that public dollars were being used to overcome market failures ostensibly created by states ceding responsibility for the development of essential technologies employed in public health protection to business, which saw no incentive to cater to populations with limited purchasing power. Nevertheless, in the last two decades PPPs have proliferated across the development spectrum, to the point that business is now widely seen as integral to the resolution of complex social problems.

Proponents of PPPs argue that such partnerships should not be construed as vehicles enabling the private sector to replace the public sector, but instead, as mechanisms that allow gaps created by a lack of will, material or technological capacity by public authorities to be filled by industry.² From this perspective, Northern states have embraced PPPs in international development for the same reasons they have sanctioned sector-specific regulatory regimes managed by firms in their own backyards: to bring private resources and expertise to bear on problems that public authorities—whether Northern aid donors, Southern aid recipients, or the specialized UN agencies whose mandate is to coordinate international policy responses—have been unable to address autonomously.

Despite governments’ widening embrace of the PPP paradigm for the purposes of social and economic development, concerns persist that because these arrangements give equal weight to the public good and the interests of unaccountable corporate capital, they erode the public–private distinction, and with it public sector legitimacy.³ For critics, the proliferation of PPPs leads to the question of whether the blurring between the public and private spheres is undermining the authority of states and public international organizations to act in the public interest, in both domestic and international policy arenas.⁴

The three books reviewed here clearly demonstrate that, from its inception, resource extraction as an economic enterprise has been an exercise in public–private cooperation for the linked goals of increasing state power and corporate profits. Such cooperation has served in some cases to augment the capacity of governments to provide public goods to their citizenry. Yet there are many more examples of public–private cooperation in resource extraction that works against the public good in countries where such activities occur. Resource extraction is increasingly being framed as a vehicle for improving the lives of historically marginalized populations, despite considerable empirical evidence from both developed and developing countries that the benefits of such partnerships are disproportionately experienced by business at the expense of the legitimacy of public sector institutions.

In Crude Reality, environmental historian Brian Black attributes society’s contemporary oil addiction to the global diffusion of an American business model for resource extraction that originated in the mid-nineteenth century, when the United States began to organize its burgeoning economy around its ample reserves of anthracite coal. The country’s embrace of “rule of capture” laws stipulated that petroleum ownership was to be determined, not by sub-surface rights associated with land title, but by first-mover status.

The development of new petroleum-based products such as kerosene, and later new applications for crude itself...