The increase in demand and prices of most high-value natural resources over the past five decades has resulted in massive income gains for resource-abundant countries. Paradoxically, many of these countries have suffered from slow economic growth, weak political institutions, and violent conflict. To combat corruption, increase accountability, and promote government effectiveness, the international community and advocacy groups have been promoting transparency as the remedy to misappropriation and mismanagement of revenues. Consequently, advocates, officials, and diplomats increasingly focus on transparency as the means to better manage revenues from high-value natural resources in developing countries. The linkages between transparency, accountability, and management of revenues from high-value natural resources require careful examination. This article provides a review of the literature on transparency and accountability in the context of natural resource revenue management, discusses how transparency is conceptualized and understood to function in this context, and assesses the existing evidence for the proposition that increased transparency leads to more accountability and improved natural resource governance. The article concludes with a discussion on the evaluation of transparency policy initiatives.
Levon Epremian, Päivi Lujala, and Carl Bruch
Elissaios Papyrakis and Lorenzo Pellegrini
The resource curse hypothesis suggests that countries that are rich in natural resources are more likely to experience poor economic growth and other developmental problems. Latin American countries show a mixed picture, confirming the idea that the resource curse is not a deterministic phenomenon and that dependence on, rather than abundance of, natural resources is associated with developmental failures. When looking beyond the nation state, local communities may benefit from royalties accruing to regional governments, often, though, at the expense of other socioeconomic liabilities (as in the case of negative environmental externalities). The case of Ecuador is in many ways exemplary of the resource curse in Latin America and the failure of policies to overcome the curse. While the country was always a commodity exporter, the intensification of extractive activities and the expansion of the extractive frontier (over the last five decades) intensified the severity of boom-and-bust cycles and compromised socio-environmental values in the vicinity of extractive activity.