The natural resource curse and fiscal decentralization

Working paper

Natural resource abundance is a blessing for some countries, but a curse for others. We show that differences across countries in the degree of fiscal decentralization can contribute to this divergent outcome. Using a large panel of countries, covering several decades and various fiscal decentralization and natural resource measures, we provide empirical support for the novel hypothesis. We also study a model that combines political and market mechanisms, under a unified framework, to illustrate how natural resource booms may create negative effects in fiscally decentralized nations.

Authors: Perez-Sebastian, F; Raveh, O

• Publication status: Published
• Publisher: University of Oxford
• Series: OxCarre Papers
• Publication date: 2013-05-06
• Paper number: 112
• Keywords: natural resources; economic growth; scal decentralization