Working Paper 49
Ghana’s recent status as an oil producer focuses attention on the relationship between domestic politics and transnational actors. While the political settlements literature is useful for focusing on how elite coalitions shape the governance of natural resources, it is not explicit about the role of transnational factors in shaping and enabling these coalitions. As such there is a tendency to downplay the significance of transnational-national interactions and national-local dynamics. This paper analyses the changing nature of the political settlement in Ghana pre- and post-oil and the role that transnational actors play in reshaping the coalitions which underpin and reproduce the overall settlement. We find that the discovery of oil has not radically altered the nature of Ghana’s political settlement, which remains of a competitive clientelist form within which institutional functioning and policy actors are heavily influenced by the need of political elites to secure success in increasingly tightly-fought elections. These tendencies and the ongoing structural inequalities between transnational capital and the sovereign state have resulted in oil licences being negotiated on terms favouring external actors. Through primary data collected from key informant interviews and case studies we show that power lies with the external actors albeit through the elite brokerage of contracts. Within these bargaining processes we see parts of the Ghanaian state acting strongly and effectively to serve both the interests of domestic elites and transnational capital. The combined effect of competitive clientelism and new sources of foreign capital is that structural issues and longer term planning decisions are largely deprioritised in favour of shorter-term gains.