Economics and Finance Faculty Publications and Presentations
Document Type
Article
Publication Date
4-2020
Abstract
Using annual data from 1980 to 2014, we reexamine the relationship between democracy and natural resources for a large sample of emerging market economies. Controlling for human capital (or real GDP per capita) and openness measures, dynamic panel methods address endogeneity from more democratic regimes demanding better control of rents. We find that democracy responds positively to natural resource rents in GDP (NAT) and negatively to terms of trade (TOT). The NAT positive effects mitigate the negative impact of TOT on democracy and holds well in different specifications. By building on a literature focusing on oil rents, increases in NAT (extra revenue over production costs) represent a windfall for mining companies. This leads society to require higher levels of participation in decisions to exploit these rents more transparently. We also find that diversification of rents helps democracy, especially in economies with high shares of oil rents.
Recommended Citation
Mollick, Andre, Andre Vianna, and Gautam Hazarika. “Democracy in Emerging Markets: A New Perspective on the Natural Resources Curse.” The Extractive Industries and Society 7, no. 2 (April 1, 2020): 600–610. https://doi.org/10.1016/j.exis.2020.04.004.
First Page
600
Last Page
610
Publication Title
The Extractive Industries and Society
DOI
10.1016/j.exis.2020.04.004
Comments
© 2020 Elsevier Ltd. All rights reserved. Original published version available at https://doi.org/10.1016/j.exis.2020.04.004