Economics at your fingertips  

Resource discovery and the politics of fiscal decentralization

Sambit Bhattacharyya, Louis Conradie and Rabah Arezki ()

Journal of Comparative Economics, 2017, vol. 45, issue 2, 366-382

Abstract: If the central government is a revenue maximizing Leviathan then resource discovery and democratization should have discernible impacts on the degree of fiscal decentralization. We systematically explore these effects by exploiting exogenous variation in giant oil and mineral discoveries and permanent democratization. Using a global dataset of 77 countries over the period 1970–2012 we find that resource discovery has very little effect on revenue decentralization but induces expenditure centralization. Oil discovery appears to be the main driver of centralization and not minerals. Resource discovery leads to centralization in locations which have not experienced permanent democratization. Tax and intergovernmental transfers respond most to resource discovery shocks and democratization whereas own source revenue, property tax, educational expenditure, and health expenditure do not seem to be affected. Higher resource rent leads to more centralization and the effect is moderated by democratization.

Keywords: Resource discovery; Resource rent; Democratization; Fiscal decentralization (search for similar items in EconPapers)
JEL-codes: H41 H70 O11 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Resource Discovery and the Politics of Fiscal Decentralization (2016) Downloads
Working Paper: Resource Discovery and the Politics of Fiscal Decentralization (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jce.2017.02.003

Access Statistics for this article

Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland

More articles in Journal of Comparative Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2020-04-06
Handle: RePEc:eee:jcecon:v:45:y:2017:i:2:p:366-382