THE ROLE OF INSTITUTIONS IN THE DEVELOPMENT OF LATIN AMERICAN OIL INDUSTRIES: AN EVOLUTIONIST AND ECONOMIC HISTORIC APPROACH

Transcription

1 THE ROLE OF INSTITUTIONS IN THE DEVELOPMENT OF LATIN AMERICAN OIL INDUSTRIES: AN EVOLUTIONIST AND ECONOMIC HISTORIC APPROACH Francisc Ebeling Barrs IBP Brazilian Petrleum Institute / Energy Ecnmics Grup UFRJ francisc.ebeling@ibp.rg.br Felipe August Dias IBP - Brazilian Petrleum Institute Energy, Plicies and Technlgies fr Sustainable Ecnmies 7-10 September 2009

2 Outline 1. Cntext and Theme Justificatin 2. An Evlutinary Ecnmics Apprach 3. Chang s Ecnmic Histric Apprach 4. Applying Chang s Apprach 5. Results 6. Clsing remarks

3 Cntext and Theme Justificatin The Brazilian Cntext Brazil s il industry is in a turnpint, prfund changes are being brught in. What triggers this whle new scenari: huge discveries in the Pre-Salt Layer What the pre-salt is ding t Brazil s s il industry US$ 195 bi t be invested until 2013 Becming a net il exprter Pre-salt layer: billins barrels f reserves (Saudi Arabia -> 264 billins)

4 Cntext and Theme Justificatin The Brazilian Cntext This gigantic reserves bring alng the central prblem f hw managing them? State r cmpanies? Oil revenues, if Brazil becmes net exprter, are prmisingly huge and culd slve sme prblems Need t avid dutch disease Rle f rigid and efficient public plicies Brazilian gvernments prpsal: Mixed system in which the pre-salt will be treated differently Creatin f state cmpany Petrsal a la Petr Creatin f state fund In a greater cntext, Brazil s new il scenari can be als prtrayed as a discussin abut hw t manage ecnmic develpment

5 Cntext and Theme Justificatin The Latin American Cntext Latin american cuntries ecnmies typically primary exprters Cnsequences -> Pverty, unequal wealth distributin Hw t break that pattern: Prebisch and the idea f demand elasticities Mdel failed in the 80's, mainly due t freign indebtment In the 90's, neliberal mdel, which als failed New tendency: recgnizing that, in the ecnmic level, diverse slutins fr lcal prblems can be emplyed Oil industry, in this new cntext, is a very special case.. Hw t manage regulatry issues and hw t design an il industry recgnizing that multiple paths are pssible? In ther wrds, dismissing the lectins f neliberalism...

6 An Evlutinary Ecnmics Apprach In rder t persecute the gal f demnstrating that the design f rules fr il industries in Latin America need creativity and must cntemplate lcal needs and limitatins, we use and Evlutinary Ecnmics Apprach (Nelsn and Winter, 1982) It defies the rle f traditinal ecnmics, which gave supprt t the idea that cmmn rules shuld be applied -> the way f blind f liberalizatin, pening f markets, privatizatin Finds technical incnsistencies in the therizatin f traditinal rthdx ecnmics Firms, and ultimately cuntries ecnmies (Schumpeter) underg evlutinary prcesses The idea f the crprate DNA in rder t evlve frm perid t t perid t+1, and, in this sense, guarantee survival But in this cntext multiple paths pssibly lead t success, see RBV (Resurce Based View Analysis)

7 An Ecnmic Histric Apprach Based upn Ha Jn Chang s (Krean Develpment Ecnmics Authr) bk Kicking the Ladder In this bk he prpses that develped cuntries wuld sabtage less successful nes by suggesting r even impsing institutinal practices that they themselves didn t practice while climbing the ladder Nt always n purpse, much mre due t ignring the cnsequences f the strategies they are selling Chang evaluated, in a histric perspective, hw develpment patterns actually tk place and hw cuntries designed their institutins twards that gal Fr instance the myth f free trade, which in early stages was an exceptin (see List)

8 Applying Chang s ideas Abstractin exercise in which we prtray il industries the same way we wuld prtray cuntries Thse cuntries wuld have institutins that, in an evlutinist cntext, wuld be the base f their develpment Like in the Evlutinary Ecnmics Apprach, multiple pssibilities f institutinal patterns wuld lead t success Of the institutins analyzed by Chang, 3 were chsen fr the here prpsed exercise Free trade -> is the il industry pen twards freign cmpetitin r nt? Demcracy -> What is the plitical system f the cuntry and hw des that influence the lcal il industry Prperty rights -> Cncessins r state mnply? Imprtant t ntice that the results here presented are an experiment

9 Results Argentina Brazil Mexic Venezuela Oil reserves Small, declining Recent huge discveries Used t be big, declining dramatically Gigantic Type f industrial rganizatin Free market Free market, Petrbras with strng market cncentratin Clsed Industry Clsed industry, but sme special cntracts Free trade Free trade did nt bring gd results Clsed industry imprtant, free market as well Clsure imprtant in a cntext f natinal develpment, nw precuppying Partial clsure f industry with psitive effects Demcracy Bth plitical regimes pernicius Bth plitical regimes had their cntributin Nt evaluated Nt evaluated Prperty rights Free access brings seldm psitive effects Bth had its psitive rle Centralizatin had its psitive rle, nw sme change culd be brught in Centralizatin has its psitive rle Our cnclusin Partially a tragedy Case f success Lngs fr refrms gelgical luck

10 Cnclusins N best mdel, but better practices d exist Fcus n lcal limitatins and pssibilities Pssibility, in further wrks, f including new cuntries t the analysis Inclusin f a benchmark Use f DEA (Data Develpment Analysis)

11 Ich bedanke mich für Ihre Aufmerskamkeit! Thank yu fr yur attentin! Obrigad pela sua atençã! Visit IAEE s s Ri 2010 Internatinal Cnference Website francisc.ebeling@ibp.rg.br