Comment.

The author examines an article by Osmel Manzano and Francisco Monaldi on the political economy of oil production in Latin America. The author claims that Manzano and Monaldi have successfully map out the main issues relevant to the problems with taxation of oil production but they are less successful in tying their analytical framework to actual experiences. He summarizes some of the problems about oil production contracts, such as there are rents associated with the production of oil and gas and there is also a time-inconsistency problem because the government cannot commit not to change taxes later on. He also argues that the paper does not provide a synthesis of how the complexities are linked to analyzing the optimal system for each country.