American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Reversing the Resource Curse: Foreign Corruption Regulation and the Local Economic Benefits of Resource Extraction
American Economic Journal: Applied Economics
vol. 16,
no. 1, January 2024
(pp. 90–120)
Abstract
We examine how foreign corruption regulation affects the economic benefits communities receive from extraction activities in the resource-rich areas of Africa. After a mid-2000s increase in enforcement of the US Foreign Corrupt Practices Act (FCPA), nighttime luminosity increases by 15 percent (5 percent) in communities within a 10-kilometer (25-kilometer) radius of affected extraction facilities. Cash-wage employment also increases significantly, suggesting that the economic benefits are not limited to electricity access. Consistent with foreign corruption regulation mitigating the political resource curse, we find that perceived corruption decreases following the rise in FCPA enforcement.Citation
Christensen, Hans B., Mark Maffett, and Thomas Rauter. 2024. "Reversing the Resource Curse: Foreign Corruption Regulation and the Local Economic Benefits of Resource Extraction." American Economic Journal: Applied Economics 16 (1): 90–120. DOI: 10.1257/app.20210408Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- F23 Multinational Firms; International Business
- K22 Business and Securities Law
- L14 Transactional Relationships; Contracts and Reputation; Networks
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- Q31 Nonrenewable Resources and Conservation: Demand and Supply; Prices