📈 Political Systems and the Unequal Burden of Natural Resource Dependence

Mapping Political Regimes and Resource Dependence

This analysis explores the intricate relationship between political systems, natural resource dependence, and global trade in fuels and mining products. Using a data-driven approach, we classify economies based on the EIU’s Democracy Index and integrate economic and trade data from the World Bank, WTO, IMF, and UNCTAD to identify key patterns.

Our findings highlight:

1. Authoritarian regimes rely more heavily on natural resource rents, particularly oil, shaping their economic structures and export profiles.

2. Democracies, aside from resource-rich exceptions, dominate global trade but face challenges due to their dependence on imported fuels and minerals, exposing them to trade deficits and price volatility.

3. Rising global energy and mineral prices disproportionately benefit authoritarian regimes, strengthening their financial leverage and potentially deepening internal governance issues like corruption and repression.

4. The transition to

renewable energy offers democracies a pathway to greater economic resilience and strategic independence by reducing reliance on resources controlled by authoritarian states.

Political Systems’ Share of the Global Economy and Resource Rents (2021–23)

Democratic nations (full and flawed) account for 70% of global GDP, while authoritarian and hybrid regimes collectively contribute 30%. However, economic power is unevenly distributed across political systems:

• Full democracies represent only 8% of the global population but generate 27% of world GDP (21% based on GDP at purchasing power parity, PPP).

• Flawed democracies, home to 38% of the global population, contribute the largest share—43% of GDP (39% based on GDP PPP).

• Authoritarian regimes, despite encompassing 39% of the world’s population, account for just 24% of GDP (31% based on GDP PPP).

In advanced economies (AEs), democracy dominates:

• Nearly all AE residents live in democratic nations.

• 57% of AE populations reside in full democracies, contributing 47% of AE GDP.

• The rest (excluding Hong Kong) live in flawed democracies.

In contrast, emerging markets and developing economies (EMDEs) are largely governed by non-democratic regimes:

• 63% of EMDE populations live under authoritarian or hybrid regimes.

• 45% live in authoritarian states, which generate 58% of EMDE GDP.

• 18% live in hybrid regimes, contributing 13% of GDP.

• 37% live in flawed democracies, accounting for 29% of GDP.

• Only three small nations, comprising 0.15% of EMDEs' population, qualify as full democracies.

Resource Rents and Political Systems (2021–23)

Natural Resource Rents and Political Systems

Authoritarian regimes rely far more heavily on natural resource rents—revenues from oil, natural gas, coal, and forests—than democracies.

According to World Bank data, natural resource rents accounted for 2.8% of global GDP in 2021, with notable variations across political systems:

• Full democracies: 1.4% of GDP

• Flawed democracies: 1.8% of GDP

• Hybrid regimes: 3.4% of GDP

• Authoritarian regimes: 6.7% of GDP

Excluding resource-rich democracies like Australia, Canada, and Norway, the natural resource rent share in full democracies drops to just 0.2% of GDP. In contrast, authoritarian economies excluding China derived a staggering 18.2% of GDP from natural resource rents.

Among authoritarian regimes, dependence on resource rents is widespread:

• 38 nations, representing 64% of the population and 83% of GDP of authoritarian states (excluding China), had resource rents contributing between 5% and 60% of GDP in 2021.

• Across these nations, resource rents averaged 21.3% of GDP.

Oil Rents: The Backbone of Petro-Authoritarian States

Oil rents are a critical revenue source for roughly one-third of authoritarian regimes, which collectively account for two-thirds of global oil rents. Nearly all major petro-rentier states (where oil rents exceed 5% of GDP) are authoritarian, with the exception of Norway.

In 2021, oil rents contributed:

• 11.9% of GDP in authoritarian regimes (excluding China).

• Less than 0.5% of GDP in democracies (both full and flawed).

These findings highlight the stark contrast between political systems in terms of economic dependence on natural resources, reinforcing how authoritarian regimes disproportionately rely on resource rents to sustain their economies.

Trade Implications of Natural Resources in Political Systems

Fuels and Mining Products Trade

Democracies—both full and flawed—excluding four resource-rich nations (Australia, Canada, Norway, and the United States) accounted for about 40% of global GDP and population while making up more than half of world trade.

In 2022, these economies’ share of global fuels and mining product trade was:

• 37% of exports (mainly processed fossil fuels and minerals).

• 61% of imports, reflecting a significant reliance on external energy sources.