Risk propensity in Mozambique's energy diplomacy : a quest for energy security or regime security?

Abstract

This study is concerned with Mozambique’s energy diplomacy. Its objectives are twofold: to advance and apply relevant theoretical concepts, while providing empirical insights into the drivers of risk propensity in energy diplomacy. Despite the increasing relevance of Africa as an alternative source of energy, and mounting empirical evidence of local strategies of regime security based on energy resources, scholarship on the interplay between energy and foreign policy as a strategy for regime security of energy-producing states in Africa remains scarce. Prospect theory postulates that decision makers engage in risky diplomatic behaviour when facing losses but, will be risk-averse when facing gains. The case of Mozambique is intriguing, however, as risk propensity in the energy sector sometimes appears to follow a logic contrary to prospect theory’s predictions, and to respond to objectives beyond the energy sector itself. The emerging question is: What determines risk propensity in Mozambique’s energy diplomacy? To answer this question, this thesis focuses on the case of hydroelectricity, specifically the 1984 Cape Town Tripartite Agreement on the Cahora Bassa hydroelectric dam and the 2007 Cahora Bassa reversion to Mozambique. I apply a qualitative research methodology and expand prospect theory by adding regime security as a condition variable, which allows for the examination of how situations and context relative to regime security affect Mozambique’s risk propensity in energy diplomacy. The main argument is that, although actual risk propensity emerges from within the energy sector, risk propensity in Mozambique’s energy diplomacy is driven by aversion to perceived losses relating to regime security. The study concludes that it is the quest for regime security, and the concomitant economic benefits for elites, that drives risk propensity in the energy sector, rather than the prospects of losses and/or gains relative to energy security.