Transparency and Accountability in Natural Resource Revenue Management

To combat corruption and increase accountability and government effectiveness in many developing countries, the international community and advocacy groups have been pushing for greater transparency. Consequently, advocates, officials, and diplomats are increasingly focusing on transparency as the means to better manage revenues from high-value natural resources in developing countries.

This project examines how increased transparency can help to transform natural resource revenues in developing countries into a blessing rather than a curse.

In many developing countries, revenues from high-value natural resources, such as oil, diamonds, and certain types of timber, are an integral part of the national economy. Paradoxically, many of these countries have suffered from a “resource curse”, that is, from slow economic growth, weak political institutions, and violent conflict. Consequently, the international community and national leaders alike have become increasingly concerned with the adverse consequences of abundant natural resources.

Transparency came into the international limelight in the 1990s as an instrument to improve governance and since then the international community and advocacy groups have promoted transparency as a means to remedy the mismanagement of natural resources and their revenues and to endorse participation and government effectiveness in decision-making processes. Therefore, international agencies like the World Bank, IMF, and UN have increasingly prioritized transparency within their own work on supporting natural resource governance, and it is often seen as a prerequisite for receiving investments, debt relief, loans, and aid.

However, there is limited empirical evidence to support that increased transparency would lead to better natural resource revenue governance.

In this project we examine empirically how and to which extent increased transparency can help transform natural resource revenues in developing countries into a blessing rather than a curse. We do so by conducting in-depth case studies and surveys in Ghana and Liberia, analyzing cross-county panel data, and reviewing documents, literature, and theory.

Research in this project will advance research on transparency and accountability, and it can potentially have profound implications for donor and national policy and practice in resource-rich developing countries.