The second layer of the model investigates the most puzzling cases of a high level of state intervention in oil supply against the background of thriving international oil trade and increasingly liberalising domestic oil sector governance. Apart from the “extreme” case stated earlier, the vulnerability-interaction model proposes two causal pathways or combinations of specific levels of the four explanatory factors that would result in the
34 adoption of a high level of strategic oil measures. These two hypotheses are generated with the help of typologising techniques.73 Each of the hypotheses below corresponds to the pathway of the same number in figure 2.3 earlier.
H3: A net oil importing economy that has adopted a high level of strategic oil supply measures would have a high capability, high OV, high-strength private capital, and a medium level of trust in oil markets (three-high case).
H4: A net oil importing economy that has adopted a high level of strategic oil supply measures would have a high capability, a noticeable OV, and must NOT have high trust in oil markets, nor high-strength private capital (non-three-high case). 4.2.1 Typologising Adoption of High Level of Strategic Oil Supply Measures
Typologising is used to help the generation of hypotheses pertaining to pathways leading to the adoption of a high level of strategic oil supply measures, which resulted in H3 and H4 stated above.74 While the validity of H3 and H4 will be examined with cases in this thesis, their applicability is also open to the possibility of being generalised to other net oil importing economies. Typologising is an appropriate tool to achieve both goals as typological theories are designed to identify “both actual and potential conjunctions of variables, or sequences of events and linkages between causes and effects that may recur” [emphases added].75
The vulnerability-interaction model posits two a priori necessary but not sufficient conditions for a net oil importing economy to adopt a high level of strategic oil supply measures: (1) a high capability to implement strategic oil measures by the state or polity under review; and (2) decision-makers of the state or polity not having a high level of trust in oil markets. Therefore, there are only three variables that need to be taken into consideration: OV, strength of private capital versus that of the state, and trust in oil markets. Figure 2.4 below shows all 18 mathematically possible configurations or pathways leading to a high level of DV with the capability being fixed at a high level:
73 Pathways to low DV in absolute terms cannot be meaningfully generated at this time because I
cannot specify at least one a priori necessary condition (a specific level of one of the four factors) for a low DV. Therefore, there are too many mathematically possible pathways even in trichotomous (34=81) configurations to make testing them practical. For an explanation of how this number comes
about and the process of how to construct an explanatory typology in general, versus more descriptive typologies, see Elman “Explanatory Typologies in Qualitative Studies of International Politics,” 293- 326.
74 Typologies do not handle well variables without fixed boundaries, like the relative logic used in
H1 and H2. This is because the “property space” or visual presentation of any explanatory typology is made of rows and columns, each representing a certain value of a discreet ordinal IV or ITV of the theory. Ibid, 296.
35
Figure 2.4 Pathways to High Level of Strategic Oil Supply Measures With High Capability
Explaining any phenomenon with eighteen different causal pathways is neither satisfactory nor practical even in a relatively large-N study.76 The typological technique of “logical compression” is therefore used to cut down the number of pathways leading to a high level of DV. This technique can be used when “there may be a connection between two or more of the typology’s dimensions such that some combinations are logically impossible or highly improbable.”77 I submit that it is highly improbable that an economy in which private capital has a high strength versus state capital in the overall economy would have a low level of trust in oil markets at the same time. Therefore, those three combinations or cells can be logically eliminated (cell group 1). Following the deductive reasoning underpinning the vulnerability-interaction model, I also argue that it is highly improbable that an economy in which private capital has high strength overall, has a medium level of trust in oil markets AND low or medium OV would adopt a high level of strategic oil supply measures, even with high capability. Therefore, the two cells representing these combinations can be logically eliminated (cell group 2) as illustrated in Figure 2.5 below:
Figure 2.5 Pathways to High Level of Strategic Oil Supply Measures With High Capability and Logical Compression
76 In statistical studies, this causes the degrees of freedom problem. In case studies, this causes the
problem of “indeterminacy.” For a discussion of these two issues, see George and Bennett, 26-30.
36 Five pathways or cells are deleted and 13 pathways leading to a high level of DV remains after applying this compression technique. All these pathways are detailed in Appendix A. The technique of “pragmatic compression,” which means collapsing “contiguous cells if their division serves no useful theoretical purpose,”78 is applied next. After all the compression is done, two pathways remain: the conditions stipulated as H3 and H4 earlier.79 Each explanatory variable at its specified level is a necessary condition for each pathway or INUS cause. These pathways are also the “types” of conditions that the vulnerability-interaction model hypothesises that would lead to the adoption of a high level of strategic oil supply measures by net oil importing economies. They are labeled the Three- High type (H3) and the Non-Three-High type (H4).
This concludes the reasoning underlying the vulnerability-interaction model developed in this study. The following section reviews what this author contends to be the most germane literature explaining oil importing states’ intervention in their economies’ oil supply and how this study relates to the literature.