untry's population, crude oil output, and available infrastructure (Schliephake, 1977, p.5), productive investment of capital is only possible for some developing countries; for others, their absorptive capacity becomes overstrained (Schliephake, 1977, p.10).
Furthermore, in addition to its regional and national economic effects, oil activity is highly technical and can often be dangerous (Randall, 1989, p. 152). It is characterized by spectacular accidents that typically cost millions of dollars in damages and dozens of lives (Randall, 1989, p. 152).
These blowouts and oil spills wreak havoc on the regional ecosystems in which they occur (Dye, 1971). In countries such as Mexico and the Congo, lack of regulatory controls over the petroleum industry may even contribute to their occurrence. In 1976, future president of Mexico, Jose Lopez Portillo, was quoted as saying, "During my administration, I will not allow areas rich in petroleum to be exploited as if they were colonies in order to transfer the wealth to other parts of the country and leave the production zones beset by disease, despoliation, misery, isolation, and depleted wells," (Grayson, 1980, p. 80). In the ensuing years, people of the oil producing regions of Mexico often recalled the words with bitterness (Grayson, 1980, p. 80).
Economic development can occur in two distinct ways. The growth can be isolated (occur at poles) or balanced (Schliephake, 1977, p. 3). In developing countries, due to barriers such as regional subsistence economies and poor transportation, the polarizing effects of growth tend to predominate (Schliephake, 1977, p. 3). Therefore, in its early stages, economic development in such countries tends to widen regional disparities and standards of living (Schliephake, 1977, p. 3). Such trends cause unbalanced growth which can have deleterious consequences for a nation's population (Schliephake, 1977, p. 3).
Similar changes are often ass...