The political economy of petroleum wealth in low-income countries : some policy alternatives

Abstract EN

Mineral wealth tends to make low-income countries less democratic and more likely to experience a civil war.

Many countries also find it hard to use their natural resource revenues to make high-quality, growth-enhancing investments.

I argue that these problems are caused, in part, by the unusual qualities of resource revenues–their great size, their non-tax source, their lack of stability, and their secrecy.

While there is no universal formula for changing these four qualities, I present a menu of policies that could make natural resource revenues smaller, smoother and more transparent, and hence easier for governments to invest productively.