Petro Populism

Egil Matsen, Gisle Natvik and Ragnar Torvik

No No 1/2014, Working Papers from Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School

Abstract: We aim to explain petro populism - the excessive use of oil revenues to buy political support. To reap the full gains of natural resource income politicians need to remain in office over time. Hence, even a rent-seeking incumbent who prioritizes his own welfare above that of citizens, will want to provide voters with goods and services if it promotes his probability of remaining in office. While this incentive benefits citizens under the rule of rent-seekers, it also has the adverse effect of motivating benevolent policymakers to short-term overprovision of goods and services. In equilibrium politicians of all types indulge in excessive resource extraction, while voters reward policies they realize cannot be sustained over time.

Keywords: resource curse; political economy (search for similar items in EconPapers)
JEL-codes: D72 O13 Q33 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2014
New Economics Papers: this item is included in nep-cdm, nep-ene and nep-pol
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Related works:
Journal Article: Petro populism (2016)
Working Paper: Petro populism (2012)
Working Paper: Petro populism (2012)
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