Asset building policies to lift the resource curse: child development accounts in oil-and-gas-rich countries

Abstract

Of the approximately 70 low-to-middle-income (LMI) oil-and-gas-rich countries, almost all are victims of the resource curse or paradox of plenty, which conceptualizes the development patterns with petroleum and mineral resources. Lifting the resource curse can positively change the trajectory of global development. After the failure of the implementation of natural reserve funds in most oil-and-gas-rich LMI countries, scholars suggested the direct distribution of natural resource revenues to the population to escape the resource curse. The paper suggests an evidence-based asset-building policy, child development accounts (CDA), linked to oil and gas revenues being directly distributed to the population. CDAs are saving accounts specifically targeting children, started in the late 1980s, to help families to fulfill life goals for their children such as postsecondary education, homeownership, business development, and retirement security. The elements of the recommended policy are based on the findings of three qualitative studies carried out in Azerbaijan in 2017 and 2018, and in six post-Soviet countries in 2019 and 2020. Primary data were collected through in-depth interviews with key informants (N = 94), such as ministers, deputy ministers, representatives of the oil funds, academicians, financial institutions, and local and international nonprofit organizations. Secondary data came from archival records, such as governmental reports, publications from national and international agencies, published research, and statistics from relevant government agencies. Purposive sampling techniques were used. The inclusion criteria were being a senior policy-maker, having a deep understanding of the policy-making process, and having deep knowledge of social protection and child well-being systems in Azerbaijan. The data were analyzed by NVivo. The paper used 10 CDA design elements recommended by Michael Sherraden and his colleagues as well as national CDA policy models from across the globe. Azerbaijan, an oil-and-gas-rich LMI country was chosen as a case study for the recommended policy design