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Friday, May 12, 2006


Roehl Briones

Why "domestic" privatization? Why not auction off the rights to extract the resource to the highest bidder, without nationality requirements/


I agree. It is not so clear to me why domestic ownership will result in a bigger/better bundle of sticks than foreign ownership.

"Transferring ownership of these resources from the state to private domestic actors thus becomes a way to bolster existing supporters and/or appease emerging rivals without the immediate need for attracting foreign capital."

I do not think it is so clear that this behaviour will result in more well-defined property rights.


Aren't the remittences by foreign workers from the US or the Gulf oil countries just another type of the curse of natural resources in that it allows the home country to enjoy higher consumption or a higher standard of living without doing much to improve the fundamental ability of the economy to actually generate a higher standard of living.


reverse causation anyone ?

could it be that being bad at economics and management, "weak" country turn to commodity exporting (lowest economic output) and dictatorchip (lowest gouvernance) ?

could it be that in "weak" countries (those badly governed) commodity's windfall are always miss-menaged (turning into a national curse)

Dan K

This thesis seems horribly underdeveloped. The Bolivians did auction their mineral rights the last time around, but (mainly because of government officials accepting bribes) did not get as good or as flexible deal as possible.

Now, with oil at $70 a barrel it is natural for the government to go back and seek to renegotiate contracts signed by a previous government and very possibly with hints of bribery (rendering said contracts null via a number of int'l treaties). Of course, Morales played all this to the hilt for political purposes but I do think that most governments would take similar actions.

Do the oligarchs really provide a democratic check on Putin or do they just augment his power within the political sphere as long as he delivers within theirs?

A better solution might be for foreign oil companies to distribute all investment payouts as stock payable to individual accounts of all national citizens. This would be a truly innovative solution that would:
1. Give voice to the propertyless in the operations of said company.
2. Develop domestic financial institutions. At a minimum so that rural peasants could cash in their ExxonMobil Class C shares.
3. Avoid most opportunities for the government to hijack resource revenues.


There is a parallel "resource curse" when the Central Government subsidizes or wholly funds sub-national governmental units and local government units (LGUs). In this scenario, the bulk of taxes are paid to the Central Government, which revenues, it then redistributes to the sub-national governmental units and LGUs. The sub-national governmental units and LGUs have no incentive to be accountable for the funds that they receive from the Central Government because they are not the ones who collected it. In the worse cases, the sub-national governmental units and LGUs have poor or no tax collection, but due to redistribution policies still receive a share of Central Government revenues. In essense, the Central Government subsidy and funds are viewed as "free money", and thus becomes a source of patronage for the sub-national governmental unit and LGU officials and politicians. If you have any studies on this phenomenon and possible solutions please e-mail me.

Pandora Braclets

I like how the charms professor is a bearded little elf with snowy white hair & in all the other movies is ala charlie chaplin?

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