Corruption and natural resource rents: evidence from quantile regression

ABSTRACT

This study examines the impacts of oil rents on corruption for 157 countries. While existing studies have primarily focused on average effects, we employ quantile regression to estimate the effects of natural resource abundance for different corruption levels. We consider the effects of natural resource rents, mainly oil rents and then compare them with those of total and non-oil natural resources rents. The estimation results show that, generally, more oil rents increase corruption. Specifically, impacts are larger in countries with an intermediate level of corruption and smaller in highly corrupt countries. While total resource rents increase corruption significantly, non-oil resource rents do not. This may be due to non-oil resource rent management (mainly inland) being more subject to public scrutiny. Non-oil natural resources are concentrated in the less-developed sub-Saharan African countries, where corruption is prevalent; therefore, the impacts of natural resource rents are unremarkable.

KEYWORDS:

• Corruption
• oil rents
• resource curse
• governance

JEL CLASSIFICATION:

• D73
• O13

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ van der Ploeg (2011) and Venables (2016) provide comprehensive surveys of this relationship.

² These estimation results are available upon request.

Additional information

Funding

This work has received financial support from JSPS KAKENHI [Grant Numbers JP26780163, JP15H03354, JP16H02026 and JP15K17043]