Saving Ghana from its Oil: The Case for Direct Cash Distribution

26 Pages Posted: 20 Oct 2009

See all articles by Todd J. Moss

Todd J. Moss

Center for Global Development

Lauren Young

Center for Global Development

Date Written: October 19, 2009

Abstract

Ghana can be considered a relative success story in Africa. We cite six variables - peace and stability, democracy and governance, control of corruption, macroeconomic management, poverty reduction, and signs of an emerging social contract - to suggest the country’s admirable political and economic progress. The expected arrival of sizeable oil revenues beginning in 2011-13, however, threatens to undermine that progress. In fact, numerous studies have linked natural resources to negative outcomes such as conflict, authoritarianism, high corruption, economic instability, increased poverty, and the destruction of the social contract. The oil curse thus threatens the very outcomes that we consider signs of Ghana’s success. This paper draws lessons from the experiences of Norway, Botswana, Alaska, Chad, and Nigeria to consider Ghana’s policy options. One common characteristic of the successful models appears to be their ability to encourage an influential constituency with an interest in responsible resource management and the means to hold government accountable. The Alaska model in particular, which was designed explicitly to manufacture citizen oversight and contain oil-induced patronage, seems relevant to Ghana’s current predicament. We propose a modified version of Alaska’s dividend program. Direct cash distribution of oil revenues to citizens is a potentially powerful approach to protect and accelerate Ghana’s political and economic gains, and a way to strengthen the country’s social contract. We show why Ghana is an ideal country to take advantage of this option, and why the timing is fortuitous. We conclude by confronting some of the common objections to this approach and suggest that new technology such as biometric ID cards or private mobile phone networks could be utilized to implement the scheme.

Keywords: Ghana, resource curse, oil, resource management, accountability, direct cash distribution

Suggested Citation

Moss, Todd J. and Young, Lauren, Saving Ghana from its Oil: The Case for Direct Cash Distribution (October 19, 2009). Center for Global Development Working Paper No. 186, Available at SSRN: https://ssrn.com/abstract=1491133 or http://dx.doi.org/10.2139/ssrn.1491133

Todd J. Moss (Contact Author)

Center for Global Development ( email )

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HOME PAGE: http://www.cgdev.org

Lauren Young

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

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