Public Policy and Resource Use: The Case of Offshore Oil

Abstract

This paper addresses the role of the government as a producer of regimes to govern natural resource use. The regime for hydrocarbon exploration and exploitation in the Outer Continental Shelf of the United States serves as an empirical illustration. The efficiency of this regime is evaluated applying criteria derived from economic theory (natural resource and property rights theory). The claims put forward by powerful political groups are contrasted with empirical evidence on the performance of the oil and gas industry. The fact that these claims were able to substantially influence the making of the regime in spite of their actual irrelevance is analysed from a public choice perspective.