The subnational resource curse: effects of oil and mineral wealth on development

Session Submission Type: Panel

Abstract

Subnational governments in oil and mineral-rich regions from Argentina, Brazil, Chile, Colombia and Peru have access to significant resource revenues. The partial decentralization of resource revenues allows these subnational governments to finance ambitious investment projects and policy programs. In addition to the fiscal links that oil and mineral assets generate at the subnational level, the extractive sector may offer opportunities to build forward and backward linkages with the local economy. However, despite of their natural wealth, resource-rich subnational governments are not necessarily performing better than their resource-poor counterparts. Additionally, the formation of enclave economies in resource-rich regions seems to be the rule rather than the exception. The emerging literature on the subnational resource curse argues that local and regional governments face similar difficulties and risks than national governments when dealing with abundance of fuel and non-fuel mineral resources. Nevertheless, the research on the existence and the causal mechanisms of a subnational resource has presented mixed results and it is less conclusive than the literature on the national resource curse. The objective of this panel is to review and discuss empirical evidence on the impact of oil and mineral wealth on developmental outcomes in Latin American countries at the subnational level. The panel explores, through a large-N approach, quantitative data from Peru and Argentina to assess the economic and social effects of the abundance and/or dependence of oil, gas and mineral resources at the subnational level.

Sub Track

• Energy, Commodities and Development

Session Organizer

• Juan David Gutiérrez Rodríguez, Oxford University

Chair

• Diego Díaz Rioseco, Pontificia Universidad Catolica de Chile

Discussant

• Osmel Manzano, Inter-American Development Bank

Individual Presentations

• Natural Resources and Local Communities: Boom and Bust Evidence from a Peruvian Gold Mine, 1997-2016 - Jose Carlos Orihuela Paredes, Pontificia Universidad Católica del Perú

• The Impact of Oil Windfalls on Subnational Living Standards: Evidence from Argentina - Lucas I Gonzalez, CONICET/Universidad Católica Argentina-Universidad Nacional de San Martin; German Lodola

• Extractive Revenues and Local Resource Curse: Comparative Case Analysis in the Peruvian Andes - Sandra Carrillo, Pontificia Universidad Católica del Perú