EconPapers    
Economics at your fingertips  
 

The zero-rent society: Evidence from hydropower and petroleum windfalls in Norwegian local governments

Jørgen Andersen () and Rune Jørgen Sørensen

Journal of Public Economics, 2022, vol. 209, issue C

Abstract: Economic theory and evidence suggest that political leaders take advantage of government revenue windfalls – particularly from natural resource exploitation – to enrich themselves. We revisit this hypothesis by combining information on massive local government hydropower and petroleum revenues in Norway with five decades of registry data on individual mayors’ earnings and wealth. We find that, while the resource expansions massively boost local government revenues and spending, there is no evidence that mayors exploit the windfalls to enrich themselves. We attribute our precisely estimated zero-finding to characteristics of the Norwegian institutional and informational environment. First, we show that the revenue windfalls induce citizens to seek political information and raise their rates of electoral participation. Second, in the early sample period when local newspapers were more important, mayors’ wage responses were negatively related to newspaper coverage. In sum, our results suggest that voter information is a key disciplining accountability mechanism, potentially explaining our zero-rent result.

Keywords: Natural resource rents; Political rents; Electoral participation; Information acquisition; Accountability (search for similar items in EconPapers)
JEL-codes: H3 O13 P48 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272722000524
Full text for ScienceDirect subscribers only

Related works:
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: https://EconPapers.repec.org/RePEc:eee:pubeco:v:209:y:2022:i:c:s0047272722000524

DOI: 10.1016/j.jpubeco.2022.104650

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-12-08
Handle: RePEc:eee:pubeco:v:209:y:2022:i:c:s0047272722000524