Abstract
Natural resource dependence is believed to have potential impact on institutional development, and there is growing consensus in the academic literature that institutional weakness is central to the explanation of the negative effects of resource booms. Generally, the quality of institutional framework and natural resource dependence interact mutually. Natural resources rents can damage institutions by removing incentives to conduct reforms and even to establish a well-functioning bureaucracy. Also, weak institutional quality is the ultimate cause for a disadvantageous management framework of natural resources and process of converting revenue flows into economic development. This paper examines the connection between institutional quality and resource dependence in resource-rich Caspian Basin countries (Azerbaijan, Kazakhstan, Russia, Turkmenistan) with transition economies. The analysis for the total natural resources rents suggests that, in aggregate, revenues on total natural resources have a negative impact on government effectiveness.
Highlights
The role of institutional quality in the “resource curse”Due to the assessment of international ...nancial institutions, in the past decades, natural resources played a crucial role in the economic development of many resource-rich countries
Using a panel dataset containing information on government e¤ectiveness, we establish the determinants of government e¤ectiveness in Azerbaijan, Russia, Kazakhstan, and Turkmenistan over the period 1996 to 2011
This paper presents a comprehensive assessment of the linkage between institutional quality and resource dependence in resource-rich transition countries of the Caspian basin – Azerbaijan, Kazakhstan, Russia and Turkmenistan
Summary
Due to the assessment of international ...nancial institutions, in the past decades, natural resources played a crucial role in the economic development of many resource-rich countries. The current literature distinguishes between no less than three di¤erent ‘dimensions’ of the resource curse: resources are associated with slower economic growth, violent civil con‡ict, and undemocratic regime types”(Brunnschweiler and Bulte, 2008).. At the same time there is growing consensus in the academic literature that institutional weakness is central to the explanation of the negative e¤ects of resource booms (Collier and Hoe- er, 2009). In this regard, the existing literature distinguishes formal and informal institutions.
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