Oil Booms and Business Busts: Why Resource Wealth Hurts Entrepreneurs in the Developing World by Nimah Mazaheri

If a book can be timely in its subject matter, offer a new conceptual or theoretical approach, or be both an enjoyable and informative read, its author can rightfully claim an achievement. In Oil Booms and Business Busts, Nimah Mazaheri has ambitiously set out to deliver on all three of these: the conclusion one reaches is that it delivers on all of these in a very satisfying manner.

The book focuses on how small- and medium-sized entrepreneurs in the developing world are impacted by their respective country’s business environment, which has been shaped by having a dominant oil-/natural resource–producing and exporting character. From this, Mazaheri argues that important conclusions can be drawn about the effects of oil windfalls, in terms of a country’s economic prospects, innovation, and the prospects for sustainable diversification.

The book comprises seven chapters, including three case studies. After the introduction, chapters two and three, respectively, survey the impact of oil windfalls on development, and present the author’s theory on oil, policy-makers, and the business environment. Chapter two provides a multinational longitudinal statistical analysis, which illuminates key linkages between oil income and the overall business environment for small and medium-sized enterprises (SMEs) and indications on national economic development.

In the book’s three case studies, Mazaheri seeks to test his theory. The first case study deals with Iran, and does well in navigating the political transitions and decision-making system the country has experienced from a historical perspective, dating back prior to the 1953 nationalization of the oil sector. Interestingly, Mazaheri underscores the commonality between decision-making in pre- and post-1979 Iran.