International political economy and global politics at large are increasingly driven by struggles over control of energy resources. The energy reserves of the Central Asia-Caspian region are fast becoming a focal point for these struggles. The exploration and development of oil and gas deposits can be realized in a variety of ways, some of which promote security and sustainability, while others open the gates for potential intrastate and interstate conflicts. Productivity growth and sustainable development can only be achieved on the basis of international cooperation that requires everyone to follow certain mutually agreeable "rules of the game." These rules, and the institutions that support them, should ideally form the backbone of an international governance structure that will promote not only peace and development, but also technological progress and social stability. This study demonstrates a connection between international politicaleconomic cooperation, on the one hand, and technological growth and social advancement of the region, on the other hand. It offers an analysis of the potential consequences of a cooperative regime for technological progress in the energy sector of the Central Asia-Caspian region. It shows that establishment of a cooperative energy regime in the region will lead to a technological breakthrough, as manifested by significant productivity growth, decreased unit cost of energy, and technological advancements in the energy sector itself and across the economy.