William Partlett

Enforcing Oil and Gas Contracts Without Courts: Reputational Constraints on Resource Nationalism in Russia and Azerbaijan

Amidst the recent record-breaking spike in oil prices, many resource-rich countries have moved aggressively to increase national control over large, internationally-financed hydrocarbon projects. Commentators have sensationalized these breaches as politically-motivated moves toward resource nationalism and a reflection of a weak rule of law. This commentary, however, oversimplifies a complex phenomenon. Many countries accused of resource nationalism have selectively renegotiated contracts and have stopped far short of full-scale nationalization. Furthermore, other resource-rich countries — often with weaker systems of legal enforcement and similar political incentives to renegotiate — have reacted to the oil boom by respecting long-term contracts and encouraging additional foreign investment. Russia and Azerbaijan can help us understand the forces driving these recent developments in the hydrocarbon industry: while Russia has renegotiated long-term contracts and partially re-nationalized its hydrocarbon industry, Azerbaijan has done the opposite. Comparing these two countries, this article will propose that these differing responses are strategic reactions to the oil boom. Both countries still require access to the technology, capital, and political connections of international oil companies to pursue their interests; thus, the ex post reputational costs of contractual breach have helped insulate long-term contracts from expropriation in the absence of a strong rule of law. Thus, like in other business communities that do not have access to impartial court systems to enforce contracts, maintaining a good reputation has emerged as a key factor in ensuring the stability of existing long-term hydrocarbon contracts.

Restoration Constitution-Making

Abstract This Article will examine an important - but largely ignored - approach to constitution- making: The use of restored constitutional orders as the basis for the creation of a new constitutional order. Looking at this ‘restoration constitution-making’ in post-communist constitutional transition, it will describe how restoration held both advantages and disadvantages. On one hand, restoration improved the politics of constitution-making by helping to avoid the elite manipulation of extraordinary institutions during constitutional drafting. On the other hand, the restoration of decades-old constitutions also led to restored laws that privileged past generations and undermined broad popular participation. Finally, restoration was an important part of gaining international recognition for independence. This international component suggests that constitution-making is about more than just domestic politics. These findings are an important first step in understanding the potential of restoration to ensure a successful constitutional transition.

The Legality of Liberal Revolution

Since the fall of communism, liberals have sought to reclaim the mantle of revolution. This new age of liberal revolution, they argue, culminates in a transformative ‘moment’ when the people unite to throw off their shackles and establish a democratic constitution. These founding moments are therefore extraordinary periods of unconstrained politics, where the sovereign people transcend the formal borders of institutionalized politics and legality to draft the constitutional boundaries of their new liberal order. Russian President Boris El’tsin placed his violent and illegal dissolution of the Russian Parliament and period of authoritarian dictatorship within this tradition of liberal revolution. Throughout 1993, El’tsin justified his decision to disband Parliament as the necessary action of an agent of the people in a period of extraordinary (and extralegal) politics. Western commentators have generally placed Russia’s constitutional foundation within this revolutionary paradigm of extraordinary politics. In Russia, however, both El’tsin’s methods and this revolutionary tradition are increasingly viewed with suspicion. This viewpoint is best expressed in the writing of the Chairman of the Russian Constitutional Court, Valerii Zor’kin. Steeped in the anti-revolutionary ideology of the late tsarist Russian constitutionalists, Chairman Zor’kin argues that El’tsin’s actions at the Russian founding helped spawn a culture of lawlessness that has undermined Russian democracy. Although Zor’kin’s approach is flawed, it is an important reminder for liberal constitutional thinkers to reexamine the concrete effects of a desire for a democratically pure founding moment.