The globally embedded limited access order: foreign capital, transnational law, and mining rents in Mongolia

Summary

Mongolia is often cited as a post-communist democratic success, yet its mineral wealth has not produced broad-based development. This article explains the paradox through the limited-access order framework of North, Wallis, and Weingast, arguing that a formally open polity coexists with an economy in which rents remain captured by a dominant coalition. Tracing the extractive sector across three stages – privatization (1990–1997), resource-nationalist contestation (1998–2012), and investor-protection rebalancing (2013–present) – it shows how three external mechanisms operating in sequence – international financial institutions, foreign direct investment, and transnational legal ordering – successively reshaped the rent structure and the coalition. Following the capacity of non-elite actors to contest rent distribution, substantive openness peaked in the 2000s and then narrowed sharply as economic policy was insulated from democratic pressure. Mongolia thus shows how mineral rents and external actors entrench limited-access logic rather than dissolving it.