Oil for Uganda – or Ugandans? Can Cash Transfers Prevent the Resource Curse?

28 Pages Posted: 17 Aug 2011

See all articles by Alan Gelb

Alan Gelb

Center for Global Development

Stephanie Majerowicz

affiliation not provided to SSRN

Date Written: August 15, 2011

Abstract

In 2009, commercially exploitable reserves of oil were found in the Albertine Lakes Basin in Uganda. Along with a number of new oil exporters, Uganda now faces the challenge of using the new resources to advance its development agenda, while avoiding the corrosive effects oil often has on governance. This paper considers the tradeoffs and potential impact of alternative uses of the oil rent. It argues that alternative approaches towards absorbing rents should be judged from two perspectives – the direct impact on growth and living standards, and the indirect effect on governance. The Ugandan authorities favor using the oil revenues to build much-needed infrastructure; while this could have very large benefits, evidence of Uganda’s already deteriorating governance and mounting corruption raise questions about its capacity to wisely invest the oil revenues. This paper considers an alternative — distributing oil rents to the population through cash transfers — as a potential tool to mitigate some of the governance risks associated with oil revenues by giving Ugandan citizens a stake in their own resource wealth, and considers the strengths and limitations of such an approach.

Keywords: Oil Rents, Resource Curse, Cash Transfers

JEL Classification: O13, I38, Q32, H20

Suggested Citation

Gelb, Alan and Majerowicz, Stephanie, Oil for Uganda – or Ugandans? Can Cash Transfers Prevent the Resource Curse? (August 15, 2011). Center for Global Development Working Paper No. 261, Available at SSRN: https://ssrn.com/abstract=1910111 or http://dx.doi.org/10.2139/ssrn.1910111

Alan Gelb (Contact Author)

Center for Global Development ( email )

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

Stephanie Majerowicz

affiliation not provided to SSRN ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
415
Abstract Views
1,543
rank
81,178
PlumX Metrics