Institutional Assets for Negotiating the Terms of Development: Indigenous Collective Action and Oil in Ecuador and Alaska

Case studies of two oil fields with superficial similarities--same company, same time period, similar anticipated scale of production, similar remote field design, similarly situated in indigenous territory--show radically different benefits for the adjacent indigenous communities. This analysis finds that the major differences driving these results are institutional: primarily differences in property rights regimes and secondarily in local institutional development. In the Alaska context, the community was able to negotiate a direct share of the royalties, while the Ecuadorian community was entitled only to an indirect revenue share from the national government. Both communities also negotiated for various community assistance projects from the company. The Ecuadorian communities likely would have succeeded in instituting their sustainable development proposal if they had stronger local organization. Comparative analysis of the factors for local institutional development fit well in the conceptual framework of the existing literature (Cornell and Kalt, E. Ostrom, Feeny). Good intentions on the part of the corporate player to foster sustainable local development are clearly valuable and laudable, but they are neither sufficient nor strictly necessary to a good outcome for the community.