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Abstract

Since 2001, hundreds of academic studies have examined the "political resource curse," meaning the claim that natural resource wealth tends to adversely affect a country's governance. There is now robust evidence that one type of mineral wealth, petroleum, has at least three harmful effects: It tends to make authoritarian regimes more durable, to increase certain types of corruption, and to help trigger violent conflict in low- and middle-income countries. Scholars have also made progress toward understanding the mechanisms that lead to these outcomes and the conditions that make them more likely. This essay reviews the evidence behind these claims, the debates over their validity, and some of the unresolved puzzles for future research.

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... This type of sovereign wealth fund is particularly useful for resource-rich developing economies, as they usually do not have well-developed financial markets, frequently suffer from capital scarcity, and face severe problems borrowing from abroad due to high premiums (Van der Ploeg, 2013). Ross (2015) identified three harmful effects of natural resource wealth on the political outcome of resource-rich developing countries: 1) it strengthens authoritarian regimes, thereby hindering democracy and significantly delaying democratization process in resource-rich developing economies, 2) it increases corruption and lowers the quality of government institutions, and 3) it significantly increases the incidence of violent conflicts (civil wars). The author also emphasizes that the impact of natural resource wealth on economic and political outcomes might differ significantly depending on the type of natural resources. ...
... In contrast, resource wealth, measured by resource abundance (a stock measure of natural resources), effectively contributes to fostering economic growth and enhancing institutional quality. Ross (2015) emphasized the importance of distinction between different types of natural resources, such as oil and various minerals, when examining the resource curse hypothesis. The author highlighted different effects of petroleum wealth compared to mineral wealth. ...
... The empirical findings of heterogenous effects of different types of critical minerals on green economic growth in this study are consistent with the observations made by Ross (2015). The author argues that the effects and consequences of minerals on economies vary significantly depending on the specific type of mineral. ...
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In the context of global low-carbon energy transition for addressing the climate crisis and global warming, soaring demand for critical minerals—essential inputs for most clean energy technologies—is expected in the coming decades. However, extracting critical minerals from the mine might have significant negative impacts on environmental sustainability and the socioeconomic well-being of the citizens where such activities take place. The paramount importance of critical minerals for global net-zero goals and their controversy on sustainable development goals motivated us to investigate the effects of critical minerals on green growth in 10 mineral-rich Latin American countries from 2000 to 2020. Firstly, the effect of critical minerals on green growth is analyzed in both disaggregated and aggregated terms. Subsequently, the moderation effect of institutional quality is examined on the nexus between critical minerals and green growth. After which, the non-linear effect of critical minerals on green growth is analyzed, conditioned on the values of five threshold variables using panel fixed-effect threshold regression. Lastly, the primary channels by which critical minerals affect green growth are identified using panel mediation analysis. The findings of this study are highlighted as follows: In aggregate terms, critical mineral contributes to increasing green growth, but its effect depends largely on the type of each critical mineral. When combined with critical minerals, the moderation effect of institutions on green economic growth is ambiguous. The effect of critical minerals varies significantly and shows non-linearity depending on the values of each threshold variable. Critical minerals influence green growth through five channels: exchange rate, renewable energy share in electricity capacity, fossil fuel dependency, government debt, and economic complexity.
... Ancak doğal kaynakların ekonomi üzerinde olumlu etkileri olduğu gibi bazı durumlarda zengin doğal kaynağa sahip olmak ülkeler açısından dezavantajlar oluşturabilmektedir. Zengin doğal kaynağa sahip ülkelerde sermaye birikiminin diğer sektörlere kanalize edilememesi toplumun sosyo-ekonomik açıdan gerilemesine neden olabilmektedir (Ross, 2015;Kartal, 2022). Bu durum literatürde "doğal kaynak laneti" kavramı ile açıklanmaktadır (Şahin, 2021). ...
... Kaynak laneti terimi ilk kez ekonomik coğrafyacı Richard Auty (1993) tarafından kullanılmıştır. İlgili kavram kaynak zengini ülkelerde özellikle Afrika, Orta Doğu, Latin Amerika ve Eski Sovyetler Birliği'nde gözlemlenen sorunları açıklamak için kullanılmıştır (Ross, 2015). Doğal Kaynak Laneti Auty'de (2001) "yeni bulgular gösteriyor ki doğal kaynak zengini ülkeler bu nimetten faydalanma konusunda başarısız olmak bir yana, aslında kaynak bahşedilmemiş ülkelerden daha kötü performans sergileyebiliyorlar" şeklinde ifade edilmiştir (aktaran Şahin, 2021). ...
Article
Günümüzde dijitalleşmenin yaşam kalitesini artırarak toplumların refahını yükselttiği kabul edilmektedir. Ancak dijitalleşme ve kalkınma ilişkisinin tüm ülkeler için benzer olup olmadığı tartışılmaktadır. Özellikle doğal kaynak bakımından zengin olan ülkeler açısından doğal kaynak lanetinin geçerli olup olmadığı, dijitalleşme ve kalkınma kapsamında, önemini korumaktadır. Çalışmada ülkeler ikiye ayrılarak incelenmiştir. Grup 1 ülkeleri Katar, Suudi Arabistan, Kuveyt, Bahreyn ve Birleşik Arap Emirlikleri’nden oluşmaktadır. Bu ülkeler petrol açısından göreceli zengin ülkelerdir. Grup 2 ülkeleri arasında ise yüksek kalkınma oranlarına sahip Norveç, Güney Kore, Japonya, İsviçre, Amerika Birleşik Devletleri ve Almanya yer almaktadır. Çalışmada ilgili ülkelerin 2000-2021 dönemi için dijitalleşme ve kalkınma ilişkisi Konya (2006) nedensellik testi kullanılarak analiz edilmiştir. Çalışma sonucunda dijitalleşme ve kalkınma arasında tespit edilen nedensellik ilişkisinin Grup 1 ülkelerinde Grup 2 ülkelerine göre göreceli olarak düşük düzeyde olduğu sonucuna ulaşılmıştır. Doğal kaynak bakımından zengin olan Grup 1 ülkelerinde doğal kaynak laneti yaklaşımı geçerli iken dijitalleşme sürecinden kalkınmış ülkelerin daha çok olumlu etkilendiği tespit edilmiştir.
... This concept embodies the adverse effects of a nation's rich natural resource reserves on its, social, economic or political well-being. (Ross, 2015). While Resource Curse or Oil Curse offering a broader explanation of the issue, a more economics-focused analysis highlights the concept of Dutch Disease. ...
... On the other hand, energy exporting nations may also face challenges stemming from an excessive reliance on revenue derived from energy exports, a phenomenon commonly referred to as the "Resource Curse." This term encapsulates the detrimental consequences of a country's abundant natural resource wealth on its economic, social, or political welfare, and has been extensively employed by scholars and policymakers over the past decade to elucidate various afflictions observed in resource-rich nations, particularly across regions such as Africa, the Middle East, Latin America, and the former Soviet Union (Ross, 2015). Numerous factors delineated in the literature contribute to the resource curse phenomenon, including problematic economic mechanisms, irrational actions by political figures or self-interested political actors, state-centric political dynamics, perspectives rooted in social capital, socio-economic structures, and the influence of foreign actors and global power structures (Rosser, 2006). ...
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Energy dependency, whether as an energy importer or exporter, presents notable challenges, as highlighted by recent events such as energy price fluctuations during the Covid-19 pandemic and the RussiaUkraine conflict. The negative consequences of these two types of dependencies are not solely attributable to fluctuations in energy prices, but there may be several channels through which inflation and energy dependency may be linked. However, existing literature has mainly focused on the impact of energy price shocks on inflation. This study aims to address this gap by investigating, as far as its known for the first time in the literature, the causal relationship between energy dependency ratios and inflation. Data from 79 countries, which both export and import energy, spanning a 43-year period, are utilized. This dataset includes variables such as the CPI, energy import dependency ratio and energy export dependency ratio. Panel causality tests, based on the methodology outlined by Dumitrescu and Hurlin (2012), are conducted to address cross-sectional dependency and heterogeneity across the entire panel as well as for each specific country. The findings from the entire panel tests indicate a bidirectional causality between energy imports and inflation for importing countries, with significance level at 1%. For energy exporting countries, a unidirectional causality is observed at the entire panel at a significance level of 1%, suggesting that inflation affects energy exports and dependency. Furthermore, at the country level, various findings are observed in the causality tests. The outcomes derived from this study have the potential to offer novel insights to the current body of literature. Within the discourse known as the pass-through effect, it is frequently posited that reliance on energy imports, in conjunction with variations in energy prices, typically results in inflation. Nevertheless, this study's findings indicate that this association may manifest in a contrary manner for both energy importing and energy exporting nations. Put differently, the results imply that fluctuations in inflation could affect energy dependency. The results emphasize the necessity for energy exporting economies to diversify their growth capacity beyond the energy sector. Additionally, for energy importing countries, investing in local energy sources such as renewable energy is crucial to mitigate the risks linked with high energy import dependency. Finally, according to findings, addressing inflation is crucial to bolster initiatives for energy independence, as it can significantly affect energy dependency.
... Extractivism implies more than the exploitation of natural resources: It is associated with the so-called "resource curse" -the "adverse effects of a country's natural resource wealth on its economic, social, or political well-being" (Ross 2015, cited in Bebbington et al. 2018. A key feature of the resource curse is the way it shapes the underlying pact of domination. ...
... Esto corrobora el planteamiento de Ross (2015) al señalar que la riqueza de recursos petroleros en un territorio tiende a producir una maldición que impacta de manera negativa a la vida política, implementando un sistema administrativo autoritario que va mermando la calidad de los líderes y se ve reflejada en su bajo nivel educativo (p. 240). ...
... It is understandable that some would be willing to gamble with the climate in a desperate situation of poverty, hunger and unemployment, and unwillingness to risk seems to be driven by fear of exacerbating already terrible climate-related drought. Furthermore, countries exploiting fossil fuels can suffer from the oil curse or resource curse, in which the country ends up poorer, more authoritarian, more corrupt, more conflict prone, more unequal and more environmentally damaged, as powerful international actors form alliances with domestic elite factions for profit at the expense of the society (Ross, 2015). If this had been pointed out, the interviewees may have been even less enthusiastic about exploiting oil resources. ...
... In the case of oil royalties (oil_royalties), as a natural resource, it affects the viability of rebellion in various conflicts around the world, and in Colombia, this natural resource represents an opportunity for financing and looting for NSAA. Ross (2006Ross ( , 2015 and Collier et al. (2003) pointing out countries with oil reserves and dependence on or the presence of abundant natural resources (as in this case also with gold and coal) are more likely to break out and prolong civil war. According to Gonz� alez (2003), in the territories under the control of insurgent groups, local orders emerge that regulate economic activities, the participation of income and income generated, and influence the allocation of budgets and distribution of royalties. ...
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Purpose The aim is to analyze the armed conflict persistence in Colombia from 2008 to 2018 based on the financial viability hypothesis (rebellion occurs when war net revenue is nonnegative). Design/methodology/approach The methodology is quantitative. Firstly, a nonparametric Kaplan–Meier functions and survival risk functions are developed as initial approximation. Subsequently, a Probit model with panel data is implemented and the covariates are grouped into three dimensions: opportunity, grievance and institutional-political. Findings The viability hypothesis boosts the continuity of the armed conflict, which is enhanced and perpetuated by the viability and financial incentives from public revenues and natural resources, while the grievance, political fragmentation and institutional dimensions contribute to the opportunity structure in Collier that makes the conflict militarily and economically viable. Research limitations/implications Lack of information for some states in Colombia prevents a much more holistic analysis. Practical implications Postulate what is required by the Colombian State to cut off the sources of financing of armed groups and thus, one of the determinants of the continuity of the conflict. Social implications The political fragmentation contributes to rebellion, and that variables representing the dimensions of grievance and institutional presence contribute to the opportunity structure that makes the conflict in Colombia militarily and economically viable. Originality/value This research proposes as a novelty to incorporate the viability hypothesis with some factors related to the grievance that explain the persistence of the armed conflict as a consequence of decreasing recruitment costs for the insurgent groups, a situation that contributes to the opportunity structure and financial viability of the conflict.
... The literature on natural resources and economic development often focuses on the "resource curse" hypothesis, which suggests that countries rich in natural resources might experience slower economic growth and governance challenges like corruption and rent-seeking behavior (Ross, 2015). However, researchers have also found that with effective governance and resource management, countries can avoid the negative consequences of resource abundance and leverage their natural resources for economic development. ...
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The paper assesses the role of environmental policy, technological innovations, digitalisation, and natural resources management across 29 Sub-Sahara Africa (SSA) countries from 1999 to 2022. The findings are contingent on various econometric approaches that account for cross-sectional dependencies, notably: PVAR-GMM, Granger causality and Quantile Regressions. The findings show that stringent environmental policies in resource-rich countries positively influence natural resource management practices. However, in resource-poor countries, the impact of such policies is less significant. Moreover, the results show that technological innovations, particularly in digital infrastructure, can strengthen resource management practices across both resource-rich and resource-poor countries in SSA. In resource-rich nations, fostering the development of digitalisation, marked by increased fixed broadband subscriptions and digital infrastructure, correlates with more effective resource management. Conversely, the impact of digital advancement on resource management practices in resource-poor countries appears to be less pronounced, indicating potential challenges in leveraging digital technologies for resource management in these contexts. These findings underline the importance of sustainable resource management in promoting long-term economic growth, social equity, and environmental sustainability across SSA. Policy implications are discussed.
... Este fenómeno es referido en la literatura como la "maldición de los recursos" (Ross, 2015). Asimismo, los proyectos de inversión que implican intervenciones en territorios específicos han generado diversas repercusiones, dando lugar a conflictos socioambientales, los cuales han ido en aumento durante los últimos años en Chile (Delamaza et al., 2017). ...
Article
En Chile, el proceso para dictaminar un proyecto o actividad que provoque un impacto ambiental se realiza a través de una evaluación ambiental, herramienta que incluye procesos de participación ciudadana. A través de un enfoque cuantitativo y cualitativo, se examina las estrategias del Servicio de Evaluación Ambiental en la implementación de estos mecanismos de participación ciudadana. Como resultados se presentan un aumento en el número de PAC apuntando a la efectividad de estas iniciativas, y además se muestra que estos procesos carecen de impacto cualitativo en la toma de decisiones finales, como se evidencia en el proyecto energético WTE Araucanía.
... This can lead to social unrest, population displacement, and violent conflicts, which can have severe economic repercussions, including the devastation of infrastructure, disruption of economic activities, and loss of investment (Fox & Beall, 2012;Patel & Burkle, 2012Ware, 2005. In certain instances, resource depletion can also exacerbate political instability and governance challenges, as governments endeavor to address the grievances of marginalized communities and manage competing demands for limited resources (Alao & Olonisakin, 2000;Ross, 2014). ...
Article
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Understanding that environmental resources are crucial to economic prosperity, nature economics studies the complex interrelationships between the natural world and economic systems. Nature economics aims to promote a peaceful coexistence between human activity and the environment by incorporating sustainability, resource management, and ecosystem valuation ideas into conventional economic models. Examining the function of natural resources in economic systems, the effects of environmental externalities, and the necessity of sustainable development, and we will explore the core ideas of nature economics.
... Song et al. (2019) pointed out that the current research on environmental accounting mainly emphasizes micro-level enterprises, while the NRBS focuses on the macro-level government. A lack of adequate supervision of the government and officials tends to entrench authoritarian regimes, to increase certain types of corruption and to trigger violent conflict in low-and middle-income countries (Ross, 2015). However, existing studies on the NRBS have ignored the liabilities in government supervision, which are associated with property rights regimes for natural resources. ...
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To achieve sustainable development, there is widespread of the need to protect natural resource and improve government oversight in achieving China's economic security and ecological civilization. Compilation of natural resources balance sheet (NRBS) and enhancement of resources management are becoming an important topic in China. How to compile NRBS to affix the responsibility for government and officials for inadequate supervision is still not resolved satisfactorily. This paper proposes the NRBS to enable governments to identify the importance of natural resource restoration and to hold leading cadres accountable for a lack of adequate supervision. The NRBS consist of three accounts: natural resource assets, natural resource liabilities, and net worth. Important components of the NRBS for the liabilities account with a property rights regime are developed to measure and assign responsibility. The compilation of an NRBS is applied to the Chinese province of Shaanxi as an illustration to demonstrate that the accounting framework and the compilation steps are tractable using financial methods and available data. The accounting results of natural resource assets and liabilities unveil the threat to resource management and the policy implications to government and officials. Finally, the advantages and limitations of NRBS are discussed.
... In Governance problems in Kyrgyzstan political economy, the term "rent" means "the surplus that is earned after all production costs and 'normal profit' have been accounted for" (Moore 2004a). Exporting natural resources like petroleum, gas, and diamonds has been regarded as a rent source for many Middle Eastern, African, Latin American, and other states (Ross 2015). This rent contributes to the revenue acquired by the government and gives it greater opportunities to spend its earnings on strengthening its authority and stability, though this is not attainable in all cases. ...
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This chapter examines labor protests in the oil sector of Western Kazakhstan, seeking to understand why workers, despite numerous protests, have been unable to form a cohesive social movement. Drawing on Eli Friedman's concept of "appropriated representation," it explores the role of trade unions, arguing that the absence of independent trade unions in Kazakhstan significantly hampers workers' ability to organize effectively. This limitation is closely tied to the prevailing form of neoliberalism in the country, referred to here as "authoritarian neoliberalism." This system relies on a range of disciplinary measures to suppress workers' efforts to build collective power and mobilize into a unified social movement.
... There is no consensus about the universal existence and ineluctability of a resource trap (Smith & Waldner, 2021). Because scholars believe it affects certain countries in certain situations, current scholarship is instead focused on why some resource-rich countries have high levels of poverty while others do not (Venables, 2016;Ross, 2015;Torvik, 2009). ...
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Much of the systems community’s explicit justice work has focused on the ecological crisis of climate, but not as much has been shared about the learnings from other intersectional social justice movements such as racial, gender, disability, LGBTQIA+, indigenous, and economic justice. This is partly because this systems practice work is being done outside of the “expert” systemic design communities. In this paper, I explore an updated understanding of adverse system entanglements, or traps, contextualized to the lived experience and global struggle for Black liberation in conversation with other inextricably entangled struggles (feminist, queer, womanist, mujerista, queer womanist, Latin American liberation, disability, and more). Classical system traps still apply, but they are insufficient to capture our full, lived experience of entanglements. In other words, you can avoid the traditional system traps and still become ensnared in other traps. For there are further, deeper, more insidious traps that work against our justice movements and flows. These shapeshifting traps require that we also are shapeshifting. I highlight learnings we already have, embody, carry, and through which we tell stories to the systemic design community to facilitate inter-ontological and inter-epistemic conversation. This is the second in a short series of papers to explore updated Black Liberation adverse system entanglements (or traps), movements (or interventions), and praxeology (instead of methodology).
... It amounts to a form of green neocolonialism that exacerbates intranational inequalities [101]. Furthermore, it perpetuates the Resource Curse [102], which describes the inability of regions to retain mineral wealth and thereby foster development: the exportation regionally or internationally of low-cost, largely unprocessed, raw materials fails to improve the livelihoods and well-being of producer communities since the value is added to the raw materials further downstream in the value chain. The UNRMS (figure 7) provides a mechanism by which to try and counter some of these challenges, grounded in the context of regional knowledge and understanding of environment, micropolitical and cultural context. ...
Article
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A transition to a more sustainable human–nature system is inextricably linked to raw materials production, if economic growth is to be maintained or increased by the emergence of new, energy- and metal-hungry technology innovation clusters. The dependence on mined raw materials is a wicked problem for societies vulnerable to negative ecological impacts and for global power bases wanting to secure access to an increasing array of feedstocks. We interrogate the issue of what constitutes a sustainable metal from a triple perspective: (i) the characteristics of ore deposits and the primary extractive operations that supply critical raw materials; (ii) the impediments for complex and interacting supply chains to maintain critical (and other) metals in use; and (iii) the lack of transparency in supply chains that makes it challenging for customers to avoid resources that have been produced by unsustainable and poor practices. We examine existing and emerging structures for resource management to explain the limits to the circular economy and what constitutes a meaningful systemic structure for primary production by responsible mining. We call for the inclusion of a standardized statement of the ‘natural capital’ embodied in R&D for technological materials as a means to create transparency about what constitutes a sustainable metal. This article is part of the discussion meeting issue ‘Sustainable metals: science and systems’.
... The DRC is experiencing the phenomenon of the resource curse (Hilson 2009;Rapanyane 2021), particularly blocking economic growth. This phenomenon describes countries with high and abundant mineral resource potential but facing economic, social, and political obstacles that prevent them from fully benefiting from these resources (Ross 2015). Several factors contribute to the resource curse in the DRC, including political instability marked by political unrest and armed conflicts (Mlambo 2022); corruption, which hinders the potential benefit of its resources, causing the population not to fully benefit from its resources remaining in an unstable socio-economic context (Titeca and Edmond 2019); and bad governance, which manifests itself in the inadequate management of mining resources, the lack of transparency in the mining sector, this being the basis of the accentuation of socio-economic problems, including inequality (McFerson 2009; Autesserre 2010). ...
Article
Despite its numerous mineral resources, the Democratic Republic of Congo (DR Congo) finds itself ranked among the poorest nations in the world, which fuels the paradox of 'richer but poorer'. This work aims to highlight the relationship between the evolution of the mining sector and the economic growth of the country in order to respond to this paradox while formulating some recommendations for the sustainable development of the country. To do this, we acquired data from the annual reports of the mining cadastre and the Extractive Industries Transparency Initiative which we used to evaluate the evolution of the mining sector. Fraud, corruption, and mining smuggling are at the root of the shortfalls experienced by the Congolese government, but also the lack of appropriate tools and technologies for the local processing of natural resources in order to give them added value. To achieve concrete results for the sustainable development of DR Congo, the ministry of mines will have to act through its technical services for the control of the mining sector in order to resolve all the problems. It will also be important to implement a circular economy policy to maximize revenue.
... Resource curse encapsulates a broad spectrum of socio-economic and geopolitical maladies suffered by a state due to its abundance of a particular natural resource (De Soysa and Neumayer, 2015). The resources in question may range from hydrocarbons (oil and gas) and mineral resources (alluvial diamonds and gold) to agricultural products (such as timber) (Ross, 2015). supplies to power their domestic industries. ...
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The economies of the Gulf States have been reliant on abundant petroleum resources for over a century. The region has experienced substantial economic success in recent decades, attributed to its competitive advantage as the world's oil empire. This success is especially noteworthy given that oil is a major economic resource in the area. However, a new debate has emerged, focusing on the concept of the resource curse resulting from the overdependence of Gulf economies on the petrol dollar. This reliance jeopardizes the long-term and future economic sustainability of the Gulf Cooperation Council (GCC) states. This piece employs a narrative literature review to illustrate how petroleum has shaped the economic landscape, and also the oil market volatility on the economic landscape of the region. The review emphasizes on the necessity for the region to shift its economic and institutional over-dependence away from the petrol dollar to other sustainable alternative economic domains. The review proposes strategic economic directions to guide the region towards a diversified and sustainable economic portfolio, reflecting significant potential for the economy of the region and its states. Sustainable economic development portfolios such as sustainable agriculture, renewable energy, smart cities, real estate development, sports, banking, tourism, and travel were analyzed.
... These consequences can include real exchange rate appreciation and reduced competitiveness in non-oil and tradable sectors. Other specific challenges of oil-dependent countries have been developed in the analytical framework of resource curse (Atkison and Hamilton, 2003;Auty, 2007;Ross, 2015), including revenue volatility, weak institutions and governance, and limited transferability of skills. Although this literature has not reached a consensus, oil-dependent countries are expected to face new challenges related to climate change and the global energy transition. ...
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In oil-dependent countries, the energy transition process is ongoing and it appeals substantial and necessary adjustments in terms of diversification. We attempt to provide a systematic analysis of the connectedness between energy transition, oil revenue and economic diversification using novel econometric approach, wavelet decomposition and panel data estimation. Our attention will be focused on the dynamics and causal relationships between energy transition process and economic diversification by checking the role of oil revenue. We use second generation unit roots, and a particular attention is given to cross-sectional dependence of the series. Results show that correlations between wavelet components are absent in the short term, weak in the medium term, and moderate in the long-run. Causality tests support a bidirectional causality between economic diversification and energy transition and between economic diversification and net oil revenue, in the medium and long-run scale levels. Our results would have several prominent implications for policy makers, in oil-dependent countries, when designing energy transitions and economic diversifications strategies, and gives and insightful look about the future of these countries.
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This article explores the phenomenon of the "resource curse" in oil-rich countries, focusing on its effects on economic growth, political stability, and social welfare. Despite the potential for significant wealth generation, resource-rich nations, particularly in developing regions, often face adverse outcomes such as economic stagnation, governance challenges, and environmental degradation. Using Uganda as a case study, the article examines how oil wealth can exacerbate social inequalities, foster corruption, and undermine sustainable development. It also assesses Uganda's legal and policy frameworks, identifying gaps in governance that may contribute to the resource curse. The article highlights the importance of strengthening legal and institutional frameworks, enhancing transparency, and ensuring that oil revenues contribute to sustainable economic development. Comparative analysis with countries like Norway and Botswana, which have successfully managed their resource wealth, provides insights into best practices for mitigating the resource curse. Ultimately, the article calls for collective action from the government, civil society, and international stakeholders to foster a balanced approach to oil governance that aligns with sustainable development goals, ensuring that oil wealth benefits both current and future generations)
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The claim that oil wealth tends to block democratic transitions has recently been challenged by Haber and Menaldo (2011), who use historical data going back to 1800 and conclude there is no ‘resource curse.’ We revisit their data and models, and show they might be correct for the period before the 1970s, but since about 1980 there has been a pronounced resource curse. We argue that oil wealth only became a hindrance to democratic transitions after the transformative events of the 1970s, which enabled developing country governments to capture the oil rents that were previously siphoned off by foreign-owned firms. We also explain why the Haber-Menaldo study failed to identify this: partly because the authors draw invalid inferences from their data; and partly because they assume that the relationship between oil wealth and democracy has not changed for the last 200 years.
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A new and extensive panel of outward non-resource and resource FDI is used to obtain panel error-correction and estimates with spatial lags of the determinants of non-resource and resource FDI. Our main findings are as follows. First, for those countries which were not a resource producer before, a resource discovery causes non-resource FDI to fall by 16% in the short run and by 68% in the long run. Second, for those countries which wre already a resource producer, a doubling of resource rents induces a 12.4% fall in non-resource FDI. Third, on average, teh contractin in non-reosurce FDI outweighs the boom in resource FDI. Aggregate FDI falls by 4% if the resource bonanza is doubled. Finally, these negative effects on non-resource FDI are amplified through the positive spatial lags in non-resource FDI. We also find that resource FDI is vertical wheras non-resource FDI is of the export-fragmentation variety. Our main findings are robust to different measures of resource reserves and the oil price and to allowing for sample selection bias..
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Paul Collier's The Bottom Billion was greeted as groundbreaking when it appeared in 2007, winning the Estoril Distinguished Book Prize, the Arthur Ross Book Award, and the Lionel Gelber Prize. Now, in The Plundered Planet, Collier builds upon his renowned work on developing countries and the world's poorest populations to confront the global mismanagement of natural resources. Proper stewardship of natural assets and liabilities is a matter of planetary urgency: natural resources have the potential either to transform the poorest countries or to tear them apart, while the carbon emissions and agricultural follies of the developed world could further impoverish them. The Plundered Planet charts a course between unchecked profiteering on the one hand and environmental romanticism on the other to offer realistic and sustainable solutions to dauntingly complex issues. Grounded in a belief in the power of informed citizens, Collier proposes a series of international standards that would help poor countries rich in natural assets better manage those resources, policy changes that would raise world food supply, and a clear-headed approach to climate change that acknowledges the benefits of industrialization while addressing the need for alternatives to carbon trading. Revealing how all of these forces interconnect, The Plundered Planet charts a way forward to avoid the mismanagement of the natural world that threatens our future.
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This book was first published in 2001. Scholars have long studied how institutions emerge and become stable. But why do institutions sometimes break down? In this book, Michael L. Ross explores the breakdown of the institutions that govern natural resource exports in developing states. He shows that these institutions often break down when states receive positive trade shocks - unanticipated windfalls. Drawing on the theory of rent-seeking, he suggests that these institutions succumb to a problem he calls 'rent-seizing' - the predatory behavior of politicians who seek to supply rent to others, and who purposefully dismantle institutions that restrain them. Using case studies of timber booms in Indonesia, Malaysia and the Philippines, he shows how windfalls tend to trigger rent-seizing activities that may have disastrous consequences for state institutions, and for the government of natural resources. More generally, he shows how institutions can collapse when they have become endogenous to any rent-seeking process.
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A large body of cross-country econometric research has investigated the possibility of a political resource curse, by which access to extensive natural resources reduces the extent of democracy and accountability. However, this literature has been plagued by problematic data and correspondingly inappropriate model specification. Dominant theories of the political resource curse focus on the political consequences of differences in the composition of government revenue, with greater reliance on non-tax revenue undermining democracy. However, most studies do not actually test this relationship: owing to the poor quality of government revenue data, they have focused instead on the impact of total resource income on democracy – a reasonable, but imperfect, approximation of the actual theory. Meanwhile, the robustness of those few studies that have focused on government revenue specifically is undermined by poor data quality. We overcome this problem by drawing on the newly created ICTD Government Revenue Dataset, which dramatically improves the quality of existing data and allows us to test directly the connection between the composition of government revenue and democracy. Employing this new data we re-test the most compelling econometric approaches from the existing literature, finding support for the existence of a political resource curse.
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Examines why social and economic upheavals in Kuwait and Qatar were accompanied by a degree of political continuity and monarchical stability not seen in many other states in the region. This apparent anomaly is investigated by examining the impact of oil on the formation and destruction of political coalitions and state institutions. The analysis is based on the theory of the rentier state, in a situation where rulers were suddenly freed from their historical need to depend on internally extracted revenues and local elites by the discovery of oil. The book also provides a comparative historical political analysis of Kuwait and Qatar and highlights the ways in which states and rulers structure the relationship between those with money and those with power. Several prominent points are emphasised: the withdrawal of Gulf merchants from political life, the emergence of new (and large) bureaucratic structures and the growth of "distributive' states. There is a select bibliography containing c200 references. -after Author
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This book challenges the conventional wisdom that natural resource wealth promotes autocracy. Oil and other forms of mineral wealth can promote both authoritarianism and democracy, the book argues, but they do so through different mechanisms; an understanding of these different mechanisms can help elucidate when either the authoritarian or democratic effects of resource wealth will be relatively strong. Exploiting game-theoretic tools and statistical modeling as well as detailed country case studies and drawing on fieldwork in Latin America and Africa, this book builds and tests a theory that explains political variation across resource-rich states. It will be read by scholars studying the political effects of natural resource wealth in many regions, as well as by those interested in the emergence and persistence of democratic regimes.
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Oil is the world's single most important commodity and its political effects are pervasive. Jeff Colgan extends the idea of the resource curse into the realm of international relations, exploring how countries form their foreign policy preferences and intentions. Why are some but not all oil-exporting 'petrostates' aggressive? To answer this question, a theory of aggressive foreign policy preferences is developed and then tested, using both quantitative and qualitative methods. Petro-Aggression shows that oil creates incentives that increase a petrostate's aggression, but also incentives for the opposite. The net effect depends critically on its domestic politics, especially the preferences of its leader. Revolutionary leaders are especially significant. Using case studies including Iraq, Iran, Libya, Saudi Arabia and Venezuela, this book offers new insight into why oil politics has a central role in global peace and conflict.
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This book makes two central claims: first, that mineral-rich states are cursed not by their wealth but, rather, by the ownership structure they chose to manage their mineral wealth and second, that weak institutions are not inevitable in mineral-rich states. Each represents a significant departure from the conventional resource curse literature, which has treated ownership structure as a constant across time and space and has presumed that mineral-rich countries are incapable of either building or sustaining strong institutions – particularly fiscal regimes. The experience of the five petroleum-rich Soviet successor states (Azerbaijan, Kazakhstan, the Russian Federation, Turkmenistan, and Uzbekistan) provides a clear challenge to both of these assumptions. Their respective developmental trajectories since independence demonstrate not only that ownership structure can vary even across countries that share the same institutional legacy but also that this variation helps to explain the divergence in their subsequent fiscal regimes.
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Although Russia experienced dramatic political breakthroughs in the late 1980s and early 1990s after shedding the shackles of Soviet rule, it subsequently failed to continue progressing toward democracy. M. Steven Fish offers an explanation for the direction of regime change in post-Soviet Russia, relying on cross-national comparative analysis as well as on in-depth field research in Russia. Fish demonstrates that Russia's failure to democratize has three causes: too much economic reliance on oil, too little economic liberalization, and too weak a national legislature.
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This paper uses data from the AidData project to analyze the association between foreign aid and the likelihood of democratization in aid recipients. Previous studies have argued that aid can entrench dictatorships, making a transition less likely. I find evidence that the relationship between aid and democratization depends on characteristics of the aid donor. During the period from 1992 to 2007, aid from democratic donors is often found to be associated with an increase in the likelihood of a democratic transition. This is consistent with a scenario in which aid promotes democratization and/or a situation in which democratic donors reward countries that take steps in a democratic direction. In either case, it suggests that democratic donors use scarce aid resources to encourage democracy. During the same period, aid from authoritarian donors exhibits a negative relationship with democratization. This suggests that the source of funding matters, with donor preferences regarding democracy helping to determine the link between aid and democratization.
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What is it about oil? Whereas one might think that countries that produce the world's energy have it good, much scholarship has come to the conclusion that countries that produce oil have it bad: they are worse off economically and politically than they would otherwise be. This counter-intuitive idea has become so widespread that the 'resource curse' is often discussed in popular outlets, from Thomas Friedman to Stephen Colbert. And yet scholarship is increasingly questioning whether this curse actually exists. After several decades of research on the topic, we still do not have a clear idea what it is about oilif anythingthat causes problems.
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Using cross-country regressions, we examine the relationship between “point-source” resource abundance and economic growth, quality of institutions, investment in human and physical capital, and social welfare (life expectancy and infant mortality). Contrary to most literature, we find little evidence of natural resource curse outside of the economies in transition. In the economies in transition, there is some evidence that natural resource wealth is associated with higher infant mortality. This negative effect, however, exists only relative to other resource rich countries. Compared to other economies in transition, natural resource abundant transitional economies are not worse off with respect to our indicators.
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This article uncovers a new mechanism linking oil wealth to autocratic regime survival: the investigation tests whether increases in oil wealth improve the survival of autocracies by lowering the chances of democratization, reducing the risk of transition to subsequent dictatorship, or both. Using a new measure of autocratic durability shows that, once models allow for unit effects, oil wealth promotes autocratic survival by lowering the risk of ouster by rival autocratic groups. Evidence also indicates that oil income increases military spending in dictatorships, which suggests that increasing oil wealth may deter coups that could have caused a regime collapse.
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While some believe that economic development prompts democratization, others contend that both result from distant historical causes. Using the most comprehensive estimates of national income available, I show that development is associated with more democratic government—but mostly in the medium run (10 to 20 years). This is because higher income tends to induce breakthroughs to more democratic politics only after an incumbent dictator leaves office. And in the short run, faster economic growth increases the ruler's survival odds. Leader turnover appears to matter because of selection: In authoritarian states, reformist leaders tend to either democratize or lose power relatively quickly, so long-serving leaders are rarely reformers. Autocrats also become less activist after their first year in office. This logic helps explain why dictators, concerned only to prolong their rule, often inadvertently prepare their countries for jumps to democracy after they leave the scene.
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It is widely thought that oil and democracy do not mix. Rentier states need not tax their citizens, thus breaking a crucial link between citizens and their governments and dimming the prospects for democracy. The link between rentierism and democracy is examined using a cross-regional dataset. Particular attention is paid to the possibility that there are both positive and negative effects of rentierism on democracy. Consistent support is not found for the notion that there is a net negative effect of rentierism on the prospects that a country will be democratic. Instead, democracy scores in the surrounding region are strongly correlated with a country's own democracy score.
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The past two decades have witnessed growing concerns in policy circles about the role of natural resources in conflicts in the Global South. New frameworks of intervention have been designed with the aim of cutting the assumed links between armed groups and resources, and promoting transparent models of resource governance. This article argues that these interventions are often based on unwarranted assumptions about the relationship between resources, conflict and governance. It presents a critical analysis of a broad set of peer-reviewed publications and influential research reports about the different ways resource governance affects people in fragile and conflict-affected areas. The authors identify a number of gaps and weaknesses in the literature, pay particular attention to the quality of the empirical evidence base for certain theoretical claims, and suggest avenues for future research.
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Employing analytical tools borrowed from game theory, Carles Boix offers a complete theory of political transitions. It is one in which political regimes ultimately depend on the nature of economic assets, their distribution among individuals, and the balance of power among different social groups. Backed by detailed historical research and extensive statistical analysis from the mid-nineteenth century, the study reveals why democracy emerged in classical Athens. It also covers the early triumph of democracy in nineteenth-century agrarian Norway, Switzerland and northeastern America as well as its failure in countries with a powerful landowning class.
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Scholars have argued that oil resources lead to poor quality institutions and governance, which causes slower economic growth, an increased propensity for civil war, and other maladies. Such conclusions, however, rest on strong modernization assumptions that oil resources are unrelated or detrimental to the level of economic development. Utilizing a unique multilevel version of extreme bounds analysis (EBA), we find that oil's deleterious effects on governance are not well established. Instead, when we relax strong assumptions about the exogeneity of economic development and utilize more objective indicators of institutional quality, oil has a net positive impact on governance. Moreover, when accounting for endogeneity, there is little to suggest either an intervening or independent effect of poor governance on civil conflict in petro-states.
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It is widely believed that rents from windfall revenue undermine accountability. An enduring explanation is that windfalls free leaders from the need to tax, producing a quiescent population. Yet, there is little direct evidence of how windfalls and taxes affect citizen political action. I use novel revenue and information experiments to examine whether and why windfalls (compared to taxes) affect how citizens participate in politics. The experiments were embedded in a public awareness campaign conducted with 1,863 citizens in Indonesia. The results—from an original survey and postcard campaign—indicate that the tax treatment increased monitoring and anti-incumbent political action. Yet, when given spending information, citizens in the windfall treatment cared just as much about misused revenue as those in the tax treatment. The findings have important implications for understanding not only how revenue affects citizen political behavior but also how people acquire and process information on government spending.
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Political economy theories on the “natural resource curse” predict that natural resource wealth is a determining factor for the length of time political leaderships remain in office. Whether resource wealth leads to longer or shorter durations in political office depends on the political incentives created by the natural resources, which in turn depend on the types of institutions and natural resource. Exploiting a sample of more than 600 political leadership durations in up to 152 countries, we find that both institutions and resource types matter for the effect that natural resource wealth has on political survival: (i) wealth derived from natural resources affects political survival in intermediate and autocratic, but not in democratic, polities; and (ii) while oil and non-lootable diamonds are associated with positive effects on the duration in political office, minerals are associated with negative duration effects.
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Why do African and Middle Eastern countries seem cursed by an abundance of natural resources yet USA, Australia and Norway seem blessed? A growing literature has argued that the benevolence or malignance of natural resources depends upon the quality of institutions. This paper offers a new explanation based on associational freedom and its interaction with the political system. The model predicts that natural resources have an adverse impact on economic performance and transition to democracy in authoritarian regimes but not in democracies. It also predicts that repression of associational freedom will be increasing in natural resources in authoritarian regimes. I test the model's predictions using fixed-effects regressions on an international panel from 1975 to 2000 and find support.
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This paper introduces quality of government rather than regime type as dependent variable in studies of political effects of natural resources. It consists of two parts. First, it argues for an effect of fiscal dependency of oil and gas rents on quality of government. Second, it finds significant, negative effects of oil and gas rent dependency on three empirical indicators of quality of government—low corruption, bureaucratic quality and legal impartiality—in a sample of 139 states in the period 1984–2006. The results hold for inclusion of control variables such as regime type, income, region and religion.
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This article offers a unified approach for studying political violence whether it emerges as repression or civil war. We formulate a model where an incumbent or opposition can use violence to maintain or acquire power to study which political and economic factors drive one-sided or two-sided violence (repression or civil war). The model predicts a hierarchy of violence states from peace via repression to civil war; and suggests a natural empirical approach. Exploiting only within-country variation in the data, we show that violence is associated with shocks that can affect wages and aid. As in the theory, these effects are only present where political institutions are noncohesive.
Article
Why do many resource-rich countries maintain autocratic political regimes? The authors’ proposed answer focuses on the causal effect of labor imports, or immigration. Using the logic offered by Acemoglu and Robinson’s democratization model, the authors posit that immigration makes democratization less likely because it facilitates redistributive concessions to appease the population within an autocratic regime. This immigration argument applies directly to the political resource curse since many resource-rich countries tend to also be labor scarce, leading them to import foreign laborers. Consistent with this understanding, the authors find a statistically significant negative relationship between net immigration per capita and democratization in future periods. Their results also show that when controlling for this immigration effect, the standard resource curse variables lose significance in a democratization model. This latter result suggests that much of the so-called resource curse stems not from resource endowments per se but rather from the labor imports related to resource production.
Article
It is often underlined that African oil-producing countries are politically unstable as a result of the role that this resource can play in political incentives. Based on data documenting the duration in office of heads of state of 26 African countries (North Africa and sub-Saharan Africa), this study reveals a surprising twist on the conventional wisdom: The purported instability of African oil-producing countries does not appear to extend to the executive branch of the state. Conversely, using survival analysis, this research suggests a positive link between oil rents and the duration in office of African leaders. Findings also reveal that other mineral rents do not exhibit the same stabilizing effect. The author's interpretation of these results is grounded in an analysis of the practicalities of oil investment and the strategic aspect of oil.
Article
How do income shocks affect armed conflict? Theory suggests two opposite effects. If labour is used to appropriate resources violently, higher wages may lower conflict by reducing labour supplied to appropriation. This is the opportunity cost effect. Alternatively, a rise in contestable income may increase violence by raising gains from appropriation. This is the rapacity effect. Our article exploits exogenous price shocks in international commodity markets and a rich dataset on civil war in Colombia to assess how different income shocks affect conflict. We examine changes in the price of agricultural goods (which are labour intensive) as well as natural resources (which are not). We focus on Colombia's two largest exports, coffee and oil. We find that a sharp fall in coffee prices during the 1990s lowered wages and increased violence differentially in municipalities cultivating more coffee. This is consistent with the coffee shock inducing an opportunity cost effect. In contrast, a rise in oil prices increased both municipal revenue and violence differentially in the oil region. This is consistent with the oil shock inducing a rapacity effect. We also show that this pattern holds in six other agricultural and natural resource sectors, providing evidence that price shocks affect conflict in different directions depending on the type of the commodity.
Article
Are natural resources a source of conflict or stability? Empirical studies demonstrate that rents from natural resources, and in particular oil, are an important source of civil war. Allegedly, resource rents attract rent-seekers, which destabilize society. However, there is a large literature on how so-called rentier states manage to pacify opposition groups by handing out special favors. The present paper attempts to bridge the gap between the rent-seeking view of resource rents as a source of conflict and the rentier state view which emphasizes the role of resource rents in promoting peace and stability. The mechanism that we highlight relies on the notion that higher rents may activate more interest groups in a power struggle. We demonstrate that the associated increased cost of conflict may in fact promote regime stability. The peaceful solution is upheld by a self reinforcing transfer program, in the form of patronage employment. The chance of conflict and rent dissipation in our model is highest for intermediate levels of resource rents, where the government cannot make credible commitments to the opposition groups.
Article
The interpretation of the resource-conflict link that has become most publicized—the rebel greed hypothesis—depends on just one of many plausible mechanisms that could underlie a relationship between resource dependence and violence. The author catalogues a large range of rival possible mechanisms, highlights a set of techniques that may be used to identify these mechanisms, and begins to employ these techniques to distinguish between rival accounts of the resource-conflict linkages. The author uses finer natural resource data than has been used in the past, gathering and presenting new data on oil and diamonds production and on oil stocks. The author finds evidence that (1) conflict onset is more responsive to the impacts of past natural resource production than to the potential for future production, supporting a weak states mechanism rather than a rebel greed mechanism; (2) the impact of natural resources on conflict cannot easily be attributed entirely to the weak states mechanism, and in particular, the impact of natural resources is independent of state strength; (3) the link between primary commodities and conflict is driven in part by agricultural dependence rather than by natural resources more narrowly defined, a finding consistent with a “sparse networks” mechanism; (4) natural resources are associated with shorter wars, and natural resource wars are more likely to end with military victory for one side than other wars. This is consistent with evidence that external actors have incentives to work to bring wars to a close when natural resource supplies are threatened. The author finds no evidence that resources are associated with particular difficulties in negotiating ends to conflicts, contrary to arguments that loot-seeking rebels aim to prolong wars.