Paper short abstract:

The paper discusses the centrality of foreign firms to the crafting of a viable economic and political order in Angola since 2002, highlighting case-specific qualities of this involvement as well as the need for greater attention to foreign firms in political economy analyses more generally.

Paper long abstract:

Since the end of Angola's civil war in 2002, its ruling elites have been able to craft a political settlement that has thus far proven remarkably effective at sustaining a cohesive ruling coalition, co-opting putative challengers, and building support among critical constituencies. As this paper demonstrates, the activities of foreign firms have been indispensable to this process in several respects. Besides the well-known role of multinational oil firms in generating the fiscal basis of the Angolan state in the form of petroleum revenues, foreign corporations have served as an instrument for the implementation of the government's reconstruction agenda, while carefully managed local linkages in various sectors have evolved into a significant patronage resource. Taken together, the presence of these firms has thus enabled the emergence of a private sector that is capable in some critical areas, but that remains politically dependent and is unlikely to provide material backing for any kind of alternative political project. Whilst calling for greater attention to the impact of foreign business activities on any political settlement, the paper argues that the configuration observed in the Angolan case rests upon a particular combination of conditions that is unlikely to be replicated elsewhere. These comprise a very high degree of centralisation of power at the end of violent conflict, as well as a resource-based economy that offers highly attractive opportunities to foreign firms despite weak performance on conventional indicators of the investment environment.