Do Oil-to-cash Transfers Decrease Political Participation? Evidence from Alaska

• In Event: Exploring the New Frontiers of Natural Resource Politics

Abstract

An emerging solution by international NGOs to the resource curse—whereby wealth derived from natural resource extraction leads to bad economic and governance outcomes—is for governments to distribute resource revenues to citizens via direct cash transfers. Yet little is known about the causal impact of such unconditional transfers on politics and political attitudes. Rentier theories posit an acquiescence effect, such that direct distribution of resource rents will suppress civic engagement. In contrast, economic voting theories suggest that increased disposable income prompts greater political participation. This paper leverages a natural experiment in 1976 Alaska to find evidence in favor of a rentier effect. The data show that individuals receiving oil-to-cash transfers as-if randomly right before the election are roughly 16 to 20 percentage points less likely to vote than those receiving transfers right after the election. These findings bear theoretical implications not only for the study of natural resource politics but also the broader study of the political effects of unconditional cash transfers such as carbon dividends and the universal basic income.

Author

• Paasha Mahdavi, University of California, Santa Barbara