Regarding my recent post on distributing oil profit to the people of Alaska, William Easterly talks about the same thing in his book "The White Man's Burden." He is comparing levels of democracy in rich and poor societies and comparing and contasting when it tends to work and when it tends to fail, noting that it tends to fail in unequal agrarian societies because:

...it alternates between populist demagogues attempting redistribution and the rich striking back with military coups.

Hence, he notes:

"The big successful Communist revolutions occurred in poor agrarian societies, - Russia in 1917 and China in 1949 - not in industrialized countries, as Marx had predicted."

However, he goes on:

A natural resource oligarchy is particularly inimical to democracy. Oil is infamous for undermining or preventing democracy.

Why, you ask:

Oil revenues are very easy to redistribute, so wealthy and well-connected insiders who benefit from oil controlled by a dictatorship have a lot to lose from a democracy that would surely result in redistribution. Hence we get oil societies desperate to prevent democracy, ranging from the oil-rich Middle East to Africa.

He then quotes NYU politics professor Leonard Wantchekon who...

...documented systematically the association of resource wealth with autocracy in Africa...he shows that new democracies have succeeded in Africa mainly in resource-poor places such as Benin, Madagascar, adn Mali, while oil-rich states such as Algeria, Cameroon, Gabon, and Libya still have dictators. Worldwide, oil producers were on average in the worse fourth of the world's countries in democracy in 2004...

I'm not that smart of a man, but it makes sense to me. Probably another reason why force-feeding democracy into the Middle East (i.e. Iraq) will not work.

So, to answer my own question from the post, yes, it could work, but it won't. It would mean that dictator's would have to give up government control of the resources, thus "sharing" or "redistributing" it to the people and thus weakening their power structure. Not going to happen.