scholarly journals Is There a Fiscal Resource Curse? Resource Rents, Fiscal Capacity and Political Institutions

2018 ◽  
Author(s):  
Tania Masi ◽  
Antonio Savoia ◽  
Kunal Sen
Keyword(s):  
Political Institutions ◽  
Resource Curse ◽  
Fiscal Capacity ◽  
Resource Rents ◽  
Fiscal Resource

scholarly journals The Political Economy of the Resource Curse: A Development Perspective

2021 ◽  
Vol 13 (1) ◽  
Author(s):  
Antonio Savoia ◽  
Kunal Sen
Keyword(s):  
Natural Resource ◽  
Political Institutions ◽  
Resource Curse ◽  
Annual Review ◽  
Publication Date ◽  
Developmental Effects ◽  
Resource Rents ◽  
Development Goals ◽  
Development Outcomes ◽  
Resource Sector

This article reviews the recent literature on the developmental effects of resource abundance, assessing likely effects and channels with respect to key development outcomes. To date, this area has received less analysis, although it is relevant to the United Nations’ Sustainable Development Goals agenda, as a significant number of the world's poor live in African resource-rich economies. We argue that the presence of a natural resource sector per se does not necessarily translate into worse development outcomes. The natural resource experience varies to a significant extent. Countries with similar levels of resource rents can end up with significantly different achievements in terms of income inequality, poverty, education, and health. The challenge is to explain the different natural resource experiences. A pivotal mechanism behind the developmental effects of the natural resources sector is the type of states and political institutions that resource-abundant economies develop. Expected final online publication date for the Annual Review of Resource Economics, Volume 13 is October 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

Oil to cash in Somaliland: a debate whose time has come

2018 ◽  
Vol 56 (4) ◽  
pp. 619-643
Author(s):  
Scott Pegg
Keyword(s):  
Political Institutions ◽  
Resource Curse ◽  
Significant Risk ◽  
The Political ◽  
Political Elites ◽  
Annual Budget ◽  
Political Resource ◽  
Democratic Election ◽  
Oil Revenues ◽  
Direct Distribution

AbstractSomaliland might start producing oil in 2019. Yet, it has done little to prepare for the arrival of oil revenues which could exceed its current annual budget. Although Somaliland has been largely peaceful for two decades and recently inaugurated its fifth president after holding a democratic election, it remains entirely unrecognised. Oil revenues could positively transform Somaliland's fragile political economy, but they also place it at significant risk for a political resource curse that could threaten its democracy, peace and political institutions. Oil to cash or the direct distribution of oil revenues to citizens has been posited as a solution to the political resource curse. Somaliland has many of the elements necessary to make oil to cash work in place. Several factors combine to make Somaliland both potentially receptive to oil to cash and uniquely positioned to benefit from it. Interviews with political elites demonstrate receptiveness to the idea. Sample revenue calculations from other African oil producers highlight just how such a system could work to benefit Somaliland.

Oil, Islam, and Women

2008 ◽  
Vol 102 (1) ◽  
pp. 107-123 ◽  
Author(s):  
MICHAEL L. ROSS
Keyword(s):  
Middle East ◽  
Gender Equality ◽  
Political Institutions ◽  
Political Representation ◽  
Resource Curse ◽  
Oil Production ◽  
Political Influence ◽  
Islamic Culture ◽  
Work Patterns ◽  
Global Data

Women have made less progress toward gender equality in the Middle East than in any other region. Many observers claim this is due to the region's Islamic traditions. I suggest that oil, not Islam, is at fault; and that oil production also explains why women lag behind in many other countries. Oil production reduces the number of women in the labor force, which in turn reduces their political influence. As a result, oil-producing states are left with atypically strong patriarchal norms, laws, and political institutions. I support this argument with global data on oil production, female work patterns, and female political representation, and by comparing oil-rich Algeria to oil-poor Morocco and Tunisia. This argument has implications for the study of the Middle East, Islamic culture, and the resource curse.

Fiscal Capacity

2011 ◽  
Author(s):  
Timothy Besley ◽  
Torsten Persson
Keyword(s):  
Public Finance ◽  
Political Institutions ◽  
State Building ◽  
Political Factors ◽  
Role Of Government ◽  
Fiscal Capacity ◽  
Common Interests ◽  
To Come ◽  
Microeconomic Foundations

This chapter explores the forces that shape investments in fiscal capacity. It sets out a core model that shows how this aspect of state building is influenced by economic and political factors, such as common interests and political institutions. A key feature of the model has been to delineate the types of states that can emerge in equilibrium. It also shows that the model can be given microeconomic foundations and demonstrates how it can be extended in a number of directions that lead to more realism. The main focus of the chapter has been on the extractive role of government and on some of the issues raised in traditional public-finance models. This has laid the groundwork for the analyses to come.

scholarly journals The Long-Run Effects of Oil Wealth on Development: Evidence from Petroleum Geology

2019 ◽  
Vol 129 (623) ◽  
pp. 2745-2778 ◽  
Author(s):  
Traviss Cassidy
Keyword(s):  
Political Institutions ◽  
Armed Conflict ◽  
Oil Production ◽  
Sedimentary Basins ◽  
Capacity Development ◽  
Fiscal Capacity ◽  
Internal Armed Conflict ◽  
Long Run ◽  
Per Capita ◽  
Oil Wealth

Abstract We estimate the long-run effects of oil wealth on development by exploiting spatial variation in sedimentary basins—areas where petroleum can potentially form. Instrumental variables estimates indicate that oil production impedes democracy and fiscal capacity development, increases corruption, and raises GDP per capita without significantly harming the non-resource sectors of the economy. We find no evidence that oil production increases internal armed conflict, coup attempts, or political purges. In several specifications failure to account for endogeneity leads to substantial underestimation of the adverse effects of oil, suggesting that countries with higher-quality political institutions and greater fiscal capacity disproportionately select into oil production.

scholarly journals How do political institutions affect fiscal capacity? Explaining taxation in developing economies

2018 ◽  
Vol 15 (2) ◽  
pp. 351-380 ◽  
Author(s):  
ROBERTO RICCIUTI ◽  
ANTONIO SAVOIA ◽  
KUNAL SEN
Keyword(s):  
Political Institutions ◽  
Developing Economies ◽  
Institutional Development ◽  
Checks And Balances ◽  
Fiscal Institutions ◽  
Fiscal Capacity ◽  
Long Run ◽  
Sector Performance ◽  
Tax Systems ◽  
Robust Evidence

AbstractA central aspect of institutional development in developing economies is building tax systems capable of raising revenues from broad tax bases, i.e. fiscal capacity. While it is recognised that fiscal capacity is pivotal for state building and economic development, it is less clear what its origins are and what explains its cross-country differences. We focus on political institutions, seen as stronger systems of checks and balances on the executive. Exploiting a recent database on public sector performance in developing economies and an IV strategy, we estimate their long-run impact, distinguishing between the accountability and transparency of fiscal institutions (impartiality) and their effectiveness in extracting revenues. We find that stronger constraints on the executive foster the impartiality of tax systems. However, there is no robust evidence that they also improve its effectiveness. Our findings also suggest that the overall impact on both total tax revenues and income tax is economically relevant.

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