Integrating the Oil

Abstract

Venezuela began to export oil in 1917. Almost immediately, as the owner of the natural resource it began to claim its right to receive fair remuneration. This objective was achieved through a historical process that lasted six decades and culminated in nationalization (Mommer, 1988a). It is possible to distinguish two stages in this process; their respective characteristics will be outlined in the first part of this article. The second part will present an econometric analysis demonstrating that the developmental potential of the oil industry (and the consequences for policymaking) can be fully grasped only when proceeds are divided into those derived from remuneration for the natural resource (ground rent) and those derived from productive activity (profits).

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