Recently, Bolivia's president announced that the country's oil fields would be nationalized and taken out of the hands of private operators. This forceful move from private to public management seems to go against the grain of the modern-day rhetoric of privatization - a language that is being vociferously promoted by multilateral banks and other agencies.

However, such actions are not without precedent. One of the greatest risks that infrastructure projects have faced in the past is that of expropriation by the host government. So are we looking at another such case? A recent article takes a look at this.

Bolivia's president Morales claims that nationalization will help him use his country's resources for the benefit of his people. However, the developed world is sceptical and has already branded this move as going against Bolivia's development goals.

Another case of expropriation that the article discusses is the case of a recently laid oil-pipeline in Chad, where the local government attempted to excercise strong-arm tactics and go against certain pre-written agreements. However, according to this article, the hue and cry raised against Chad was not quite as loud as that against Bolivia? Why did two similar actions bring about different responses? The article attempts to answer this question by looking at the interests of powerful players such as oil-companies, and investigating how they differed across both cases.

At the very least, the author does an excellent job of highlighting how international opinion is shaped by institutions and political interests, which in turn drive public policy and intevention strategies.

Posted by ashwin at May 16, 2006 10:28 PM