Why some countries are immune from the resource curse: The role of economic norms

Aytaç, S. Erdem; Mousseau, Michael; Örsün, Ömer Faruk

doi:10.1080/13510347.2014.964216

Cited by 26 publications

(13 citation statements)

References 44 publications

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“…Regarding political regime type, Ross (2001Ross ( , 2012aRoss ( , 2014 finds evidence of a stabilizing effect of resource wealth on autocratic rule. This is in line with the theoretical arguments and empirical findings presented by other authors (Aytaç, Mousseau, & Örsün, 2016;Collier & Hoeffler, 2005;Hendrix & Noland, 2014;Tsui, 2011;Wright, Frantz, & Geddes, 2015), and it has recently been corroborated by Prichard et al (2014), who use the ICTD Government Revenue Dataset. Further, in a study of 15 sub-Saharan countries, McGuirk (2013) shows that rents from natural resources lead to lower levels of tax enforcement, thus reducing the demand for democratic accountability.…”

Section: Literature Reviewsupporting

confidence: 89%

Does the Political Resource Curse Affect Public Finance? The Vulnerability of Tax Revenue in Resource‐Dependent Countries

Haldenwang

Ivanyna²

2018

J of Intl Development

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This paper explores the extent to which government revenue is affected by external shocks and whether these effects are different for resource-dependent (RD) as compared with non-RD countries. We are particularly interested in the fate of poorer countries, as we assume they will find it more difficult to implement the policies needed to offset the effect of shocks. Based on data from the International Centre for Taxation and Development Government Revenue Dataset for 1980-2010, we measure the elasticity of tax revenue with respect to terms-of-trade shocks. We find that revenue in RD countries is more vulnerable to such shocks. It is above all the richer countries that appear to be adversely affected, compared with their non-RD counterparts. In contrast, the difference between RD and non-RD countries is less pronounced in the group of poorer countries. We also find that resource-dependent countries became less vulnerable in the 2000s as compared with previous decades. At the same time, political regime type does not seem to matter for the vulnerability of government revenue in these countries.

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Section: Literature Reviewsupporting

confidence: 89%

Does the Political Resource Curse Affect Public Finance? The Vulnerability of Tax Revenue in Resource‐Dependent Countries

Haldenwang

Ivanyna²

2018

J of Intl Development

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“…The state of evidence is consistent with economic norms expectations. First, every democratic failure in history has occurred in a nation with a clientelist economy (Aytaç et al, 2016: 75; Mousseau, 2012a: 204–205). Second, there are only five contractualist nations in the Table 1 without democracy (Polity2 ≤6), and two of these democratized within a decade of becoming contractualist: South Korea became contractualist in 1990 and democratic in 1998; Taiwan became contractualist in 1983 and democratic in 1992.…”

Section: Maybe Democracy Causes Contractualist Economy and Peace?mentioning

confidence: 99%

Grasping the scientific evidence: The contractualist peace supersedes the democratic peace

Mousseau

2016

Conflict Management and Peace Science

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This article draws on new data and analyses to investigate whether the contractualist peace supersedes the democratic peace. A series of studies have shown that contractualist economy accounts for the democratic peace, but defenders of the democratic peace claim that these studies contain measurement errors, that democracy correlates with peace at least in interaction with contractualist economy, and that the causation is reversed from democracy to contractualist economy and peace. Results are consistent across all tests: there is no support for democracy as a cause of peace. The democratic peace is a statistical artifact explained by contractualist economy.

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“…In contract-intensive economies individual actors obtain their income from the marketplace whereas under clientelistic institutions they engage in rent-seeking. In accordance with the story of the Syberian fur trade, Aytaç et al (2016) argue that a clientelistic economy is a prerequisite for the resource curse and countires with conract-intensive institutions are immune from it. Their results suggest that abundant clientelist regimes distribute resource rents in exchange for political support which undermines the effort for democratization.…”

Section: Endogenous Institutionsmentioning

confidence: 96%

Institutions and Resource-driven Development

Szalai

2018

EconWorld

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According to the resource curse hypothesis abundant resources are likely to impede economic growth and social development. However, empirical evidences are controversial as numerous studies found that the direct effects of abundance are either insignificant, non-monotonic, or positive, while the negative indirect effects arise when natural wealth crowds-out other fundamental sources of growth. Further research on the different development outcomes concluded that the growth effects are also conditional on the quality of both public and private institutions. Political economy explanations argue that abundance leads to patronage and myopic rent-seeking behaviour under weak institutions, whereas it fosters economic growth if the institutional environment of the extraction promotes sound revenue management, transparency, and accountability. This paper aims to synthetize the findings on the interaction between institutions and natural resources and gives an overview of the policy proposals on mitigating the negative indirect effects.JEL codes: O43, Q32, Q38

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Why some countries are immune from the resource curse: The role of economic norms

Cited by 26 publications

References 44 publications

Does the Political Resource Curse Affect Public Finance? The Vulnerability of Tax Revenue in Resource‐Dependent Countries

Does the Political Resource Curse Affect Public Finance? The Vulnerability of Tax Revenue in Resource‐Dependent Countries

Grasping the scientific evidence: The contractualist peace supersedes the democratic peace

Institutions and Resource-driven Development

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