The Political Challenges of an Oil Boom: the Resource Curse and Political Stability in Russia 1

This article discusses the political challenges arising from the Russian oil boom. It focuses on the regula - tion of foreign direct investment, the role of state-controlled companies and the management of resource revenues. It argues that inefficient governance allows the exploitation of resource revenues within politi - cal patronage networks, while, on the other hand, the insulation of the management of resource revenues from the patronage networks guarantees the future availability of rents. At the same time, the distribution of smaller parts of the rents to the larger population is meant to ensure that no serious political challenge to the patronage system will occur.