Russia, the Rent-Seeking Revisionist

Chapter 5 focuses on how Russia, the most land-oriented Arctic littoral state, responded to the shock. This chapter analyzes how Russia’s political economy has influenced its foreign policy preferences. Specifically, this chapter illuminates how Russia’s economy and ruling elites came to depend on income from natural resources. This dependence drove Russia’s rulers to have a stronger interest in securing control over resource-rich territory, which, in turn, explains why they dramatically increased their Arctic military presence following the shock. The chapter chronicles Russia’s dual-track policy of simultaneously pursuing its claims through international institutions and gunboat diplomacy. These findings reveal that Russia invested more in increasing its Arctic military activity and force structure than any other Arctic state. This chapter affirms the book’s core theoretical prediction: the more economically dependent states are on natural resources, the stronger their interest in securing control over additional resources.

Descriptive Statistics and Cross-National Comparisons of Arctic Power Projection

Chapter 4 employs data from three new data sets, the Arctic Military Activity Events Data Set, the Arctic Bases Data Set, and the Icebreaker and Ice-Hardened Warships Data Set. These new data enable a systematic comparison of each state’s Arctic military forces and deployments before and after the 2007 climate shock. The data offer a corrective to both sensationalist media accounts that suggest that all states are scrambling to fight over Arctic resources and those who downplay real changes in states’ Arctic military capabilities and presence. Confirming Rent-Addition’s Theory’s predictions, the descriptive statistical comparisons reveal that the states that were most economically dependent on resource rents, Norway and Russia, were the most willing to back their claims by projecting military force to disputed areas and investing in Arctic bases, ice-hardened warships, and icebreakers.

Conclusion

Chapter 9 concludes with a discussion of the core findings and implications for the future of resource competition and territorial conflict. It demonstrates Rent-Addiction Theory’s generalizability by applying it broadly to explain the decline in territorial conflict worldwide and the prospects for resource competition in regions beyond the Arctic, such as the Middle East and Africa. The core findings support the book’s thesis that what states make influences what they want to take. The theory suggests that, contrary to existing findings on the link between economic development and conflict, resource-driven development may make states more, rather than less, conflict-prone. This insight is critical for policymakers seeking to anticipate states’ responses to climate change and technological innovation, which are rapidly revealing seabed resources. Finally, the theory provides a novel explanation for why, despite a general decline in conquest, some states still have a strong interest in seeking profits from territorial expansion.

A Tale of Two Nordic Powers

Chapter 8 explores Denmark and Norway’s divergent responses to the revelation of Arctic resources in 2007. This chapter employs a natural experiment that exploits the discovery of North Sea oil in the 1960s. The two Nordic nations are extremely similar, but Norway discovered oil, while Denmark did not. Norway embarked on a resource-driven development path, while Denmark, with no oil reserves to exploit, invested heavily in its citizens’ productivity and human capital. As a result, Norway’s economic structure became land-oriented and Denmark’s production-oriented. This provides an opportunity to observe the effect that variation in each state’s economic structure had on its preference for territory and willingness to compete over its control. The findings reveal that Norway’s economic dependence on income from natural resources drove Oslo to invest much more than Copenhagen in projecting power to secure Arctic claims. This finding strongly confirms Rent-Addiction Theory’s predictions.

Research Design—The Arctic as a Natural Laboratory

Chapter 3 lays out the research design and explains why an unprecedented drop-off in polar ice in 2007 makes the Arctic an ideal natural laboratory to test Rent-Addiction Theory against competing explanations. All five of the Arctic littoral states experienced this exogenous shock at the same time and have potential offshore resources at stake. Observing how strongly each state responded to the shock by investing in projecting power to back its resource claims allows one to infer the underlying preferences and interests of these states. Comparing states’ behavior directly before and after the shock controls for slower-moving and potentially confounding factors, such as nationalism, status-seeking, and relative power. This chapter also describes how key variables of interest such as economic structure, domestic political institutions, and exclusionary foreign policy are operationalized.

Introduction

Chapter 1 introduces the book’s core research question: why do some states have a stronger preference than others to project power to secure control over territory and resources as a source of rents and wealth? The book’s core argument is that what states make influences what they want to take. States that rely primarily on income from making goods and services have less interest in taking territory. In contrast, states that rely primarily on income from extracting natural resources have a stronger interest in taking territory. This argument is derived from Rent-Addiction Theory, which is briefly summarized in this chapter along with its contribution to the fields of international relations and existing research on territorial conflict. The chapter concludes with an overview of the layout of the book with brief descriptions of the subsequent chapters.

Canada

Chapter 7 assesses how Canada, the production-oriented state most reliant on resource rents, responded to newly accessible stocks of Arctic resources. This chapter demonstrates that Canadian officials responded to the shock with assertive statements promising billions to build ice-hardened patrol ships, new bases, and Arctic training facilities. However, despite the prominent role the Arctic has played in speeches by Canadian leaders, Ottawa has been reluctant to follow through on promises to upgrade its Arctic force structure and military presence. Whereas Russia has backed its rhetoric and commitments by investing in its Arctic force structure and military capabilities, Canada has not. Talk is cheap, but ships and bases are expensive; and, as this chapter shows, Canada was unwilling to back its commitments with costly investments. If the United States is the dog that does not bark, then Canada is the dog that barks but does not bite.

The United States’ Arctic Foreign Policy

Chapter 6 examines how the United States, the most powerful production-oriented Arctic state, responded to the revelation of Arctic resources. If capabilities drive intentions, then the United States should project the most power to the region. However, if economic structure influences states’ preferences, as this book argues, then Washington should be more interested in securing access to markets and less concerned with seeking control over Arctic resources. This chapter provides a detailed account of the impact the United States’ production-based economy and broad governing coalition had on its Arctic foreign policy. Compared with the other Arctic states, the United States invested far less in bolstering its existing Arctic bases and icebreakers. In line with the book’s core predictions, the United States’ domestic political economy best explains Washington’s reluctance to make greater Arctic commitments and a concomitant lack of substantial investment in increasing the United States’ Arctic military presence throughout multiple administrations.

A Theory of State Preferences and Resource Competition

Chapter 2 develops a theory of states’ foreign policy preferences. A state’s preference for territory depends on its economic structure and domestic political institutions. Economic structure determines the state’s source of income. Production-oriented states whose economies are structured to generate income from producing goods will be less interested in resources and territory. In contrast, land-oriented states that are economically dependent on resource rents will have a stronger preference to seek control over resource-rich territory. This effect holds in both autocracies and democracies. However, autocracies should place a greater value on the political benefits associated with land rents because they are a source of wealth that is easier to control and extract. In sum, the more autocratic and land-oriented the state, the stronger its preference for resource rents and the more the state should invest in projecting military force to secure resources.