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Corruption and the Political Economy of Resource-Based Development: A Comparison of Asia and Sub-Saharan Africa

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Abstract

We model how the “supply and demand” for bribes affects resource use by an economy, and the reinvestment of resource rents in other assets. This requires adjusting the World Bank’s measure adjusted net savings for any rent dissipation due to corruption. The impacts of corruption on long-run changes and periodic growth in the adjusted net savings rate are estimated across African and Asian economies from 1970 to 2003. Corruption rather than resource dependency per se affects negatively the ability of African countries to reinvest resource rents in the short term, but for Asian countries, corruption is less important than point resources. Corruption influences long-run growth in adjusted net savings rates in all countries, and is also the “pathway” through which this growth is affected by patterns of resource use, trade and abundance.

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Authors and Affiliations

  1. Department of Economics & Finance, University of Wyoming, 1000 E University Ave., Laramie, WY, 82071, USA

    Edward B. Barbier

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  1. Edward B. Barbier
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Correspondence to Edward B. Barbier.

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I am grateful for comments provided by Giles Atkinson, Bob Deacon, Matt Kotchen, Benoit Crutzen, Alan Taylor, participants in seminars at the University of California, Santa Barbara and the 2008 EAERE Conference, University of Götenberg, Sweden, and by three anonymous reviewers.

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Barbier, E.B. Corruption and the Political Economy of Resource-Based Development: A Comparison of Asia and Sub-Saharan Africa. Environ Resource Econ 46, 511–537 (2010). https://doi.org/10.1007/s10640-010-9352-y

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