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Natural Resources, Governance, and Corruption

Leila Shadabi and Richard V. Adkisson

Journal of Economic Issues, 2021, vol. 55, issue 1, 246-263

Abstract: In efforts to explain the resource curse, researchers have examined the connection between the resource curse and national corruption. Because being relatively rich in natural resources may encourage rent-seeking behavior, some have speculated that the root cause of the curse might be corruption rather than an abundance of natural resources. The evidence is mixed. This article turns the question around and asks, given political, cultural, institutional, and economic influences, whether there is a statistical relationship between resource abundance and corruption. The focus is on the interaction of autocratic governance and resource abundance. The results suggest that the rents on natural resources alone are not a strong cause of corruption. There is evidence that natural resources combined with autocratic governance influences corruption but, after controlling for other influences the relationship is not strong and the results are sensitive to the way that corruption is operationalized. Meanwhile, several non-resource variables including, larger government, more competition, political stability, and business freedom do seem to reduce national corruption. The study is based on 125 nations using average 2012–2016 variable values.

Date: 2021
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DOI: 10.1080/00213624.2021.1877042

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Handle: RePEc:mes:jeciss:v:55:y:2021:i:1:p:246-263