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Natural Resources, Democracy and Corruption

journal contribution
posted on 2023-06-07, 19:54 authored by Sambit BhattacharyyaSambit Bhattacharyya, Roland Hodler
We study how natural resources can feed corruption and how this effect depends on the quality of the democratic institutions. Our game-theoretic model predicts that resource rents lead to an increase in corruption if the quality of the democratic institutions is relatively poor, but not otherwise. We use panel data covering the period 1980 to 2004 and 124 countries to test this theoretical prediction. Our estimates confirm that the relationship between resource rents and corruption depends on the quality of the democratic institutions. Our main results hold when we control for the effects of income, time varying common shocks, regional fixed effects and various additional covariates. They are also robust across different samples, and to the use of various alternative measures of natural resources, democracy and corruption.

History

Publication status

  • Published

Journal

European Economic Review

ISSN

0014-2921

Issue

4

Volume

54

Page range

608-621

Department affiliated with

  • Economics Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-02-06

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