On the International State-run Export Cartels

The status of the Organisation of Petroleum Exporting Countries (OPEC) as a cartel with the necessary market power to manipulate oil prices has been questioning since mid 80’s when Griffin (1985) proposed a set of alternative hypotheses regarding OPEC’s behavior. The main idea of my research is to offer a political economy argument by considering the fact that OPEC member-countries are effectively national governments that maximize social welfare, rather than firms that maximize profit. That is, they take into account gains and losses of citizens of their countries when selling extracted oil abroad. Also I suggest that democracies and autocracies differ in their rent-sharing mechanisms and their export decisions may differ and be subject to political constraints. So, my research hypothesis is that cooperation or deviation strategies within OPEC depend on the political institutions of its members.