The Natural Resource Curse and Fiscal Decentralization

American Journal of Agricultural Economics, Forthcoming

49 Pages Posted: 18 Jan 2011 Last revised: 6 Aug 2015

See all articles by Fidel Perez‐Sebastian

Fidel Perez‐Sebastian

Universidad de Alicante - Department of Economic Analysis

Ohad Raveh

Hebrew University of Jerusalem

Date Written: April 15, 2015

Abstract

Natural resource abundance is a blessing for some countries, but a curse for others. We show that differences across countries in the degree of fiscal decentralization can contribute to this divergent outcome. Using a large panel of countries, covering several decades and various fiscal decentralization and natural resource measures, we provide empirical support for the novel hypothesis. We also study a model that combines political and market mechanisms, under a unified framework, to illustrate how natural resource booms may create negative effects in fiscally decentralized nations.

Keywords: Natural Resources, Economic Growth, Fiscal Decentralization

JEL Classification: O13, O18, O40, Q32, H77

Suggested Citation

Perez Sebastian, Fidel and Raveh, Ohad, The Natural Resource Curse and Fiscal Decentralization (April 15, 2015). American Journal of Agricultural Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1742482 or http://dx.doi.org/10.2139/ssrn.1742482

Fidel Perez Sebastian

Universidad de Alicante - Department of Economic Analysis ( email )

03080 Alicante
Spain

Ohad Raveh (Contact Author)

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, 91905
Israel

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