Oil, corruption and the resource curse

International Affairs

Volumn 83, Issue 6, 2007, Pages 1123-1140

  Shaxson, Nicholas ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 35548957380     PISSN: 00205850     EISSN: 14682346     Source Type: Journal    
DOI: 10.1111/j.1468-2346.2007.00677.x     Document Type: Article

References (43)

1. Jan-Peter Olters, 'Old curses, new approaches? Fiscal benchmarks for oil-producing countries in sub-Saharan Africa', IMF working paper 07/107, May 2007.
2. See e.g. Carlos Leite and Jens Weidmann, 'Does Mother Nature corrupt? Natural resources, corruption and economic growth', IMF working paper 99/85, July 1999.
3. Omar Bongo, Blanc comme nègre: Entretiens avec Airy Routier (Paris: Grasset, 2001), pp. 285-91. This is a condensed version of what he said.
4. Data from Unicef basic indicators (www.uuicef.org/files/Table1.pdf, accessed 23 Sept. 2007) and UN Human Development Index (2006), as well as budget data from the Angolan finance ministry website. An exchange rate of Kz 80:$1 was used; however, in mid-2007 the Kwanza appreciated further, making this an even bigger budget in dollar terms. However, the data are based on old surveys and should be treated with caution, especially given Angola's rapid postwar growth.
5. See www.govindicators.org, accessed 23 Sept. 2007.
6. The present author urges that the CPI be treated with great caution, for reasons outlined below.
7. Macartan Humphreys, Jeffrey Sachs and Joseph E. Stiglitz, Escaping the resource curse (New York: Columbia University Press, 2007).
8. See e.g. http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,coutentMDK: 20190202~menuPK:34 457~pagePK:34370~piPK:34424~theSitePK:4607,00.html, accessed 23 Sept. 2007.
9. Author's interview with André Madec of ExxonMobil, 2005, also reproduced in the concluding chapter of Nicholas Shaxson, Poisoned wells: the dirty politics of African oil (Basingstoke: Palgrave, 2007).
10. Madec said almost exactly the same thing in an article in The Economist of 24 Dec. 2005 entitled 'The paradox of plenty - the curse of oil': 'We don't like to call it the oil curse, we prefer "governance curse'".
11. The present author has used this analogy in the Fela Kuti chapter of Poisoned wells (which did not explicitly join the two ideas presented here). This formulation was derived from a sentence in Chinua Achebe's The trouble with Nigeria (Oxford: Heinemann, 1983): 'a normal sensible person will wait for his turn if he is sure that the shares will go round; if not, he might start a scramble'.
12. Tim Harford, 'Right on queue', Financial Times Magazine, 22/23 Sept. 2007. He was writing about the queues forming outside branches of the UK's Northern Rock bank in September 2007.
13. Humphreys et al., Escaping the resource curse, ch. 2, p. 26.
14. William Easterly, The elusive quest for growth: economists' adventures and misadventures in the tropics (Cambridge, MA: MIT Press, 2002), chapter entitled 'Polarized peoples'.
15. Michael Ross, 'Does taxation lead to representation?', British Journal of Political Science 34, 2004, pp. 229-50.
16. See Mick Moore, 'Dangerous ideas in development - why are aid donors frightened of taxation?', http:// www.ids.ac.uk/ids/news/Archive%202007/ taxation_apr07.html, accessed 23 Sept. 2007.
17. 'In short, taxation is important because it is essential to democratic governance, but also because it holds the key to state building and state survival': Todd Moss, Gunilla Pettersson and Nicolas van de Walle, 'Au aidinstitutions paradox? A review essay on aid dependency and state building in Sub-Saharan Africa' (Washington DC: Center for Global Development, Working Paper 74, Jan. 2006).
18. For more discussion of the issues of taxation and accountability, see e.g. Mick Moore and Sue Unsworth, 'How does taxation affect the quality of governance?', Institute of Development Studies policy briefing 34 (Brighton: University of Sussex, March 2007), Alex Cobham, 'The tax consensus has failed!' (Oxford: Oxford Council on Good Governance, Jan. 2007), or Michael L. Ross, 'Does taxation lead to representation?'.
19. 'Introduction' in Humphreys et al., Escaping the resource curse.
20. With thanks to Emma Lochery for some original and challenging thoughts on how to frame these questions.
21. For example, in Escaping the resource curse.
22. Britons are waking up to the notion that their country is a tax haven. See e.g. Mick Mathiason, 'Welcome to London, the onshore tax haven', Observer, 8 July 2007.
23. The present author and Richard Murphy co-wrote a comment piece entitled 'African graft is a global responsibility', developing these ideas further, for the 1 June 2007 issue of the Financial Times.
24. The president of the secretive French Intercontinental Bank (Fiba) said in court that financial flows were conceived so that the Africans were only aware of the official lending, but were ignorant of the whole system - which Elf rendered deliberately opaque.
25. See John Christenseu, 'Mirror, mirror, on the wall, who's the most corrupt of all?' (London: Tax Justice Network, 2006), as well as the 'Corruption and the offshore interface' section of the 'Resources' section of TJN's website, www.taxjustice.net, accessed 23 Sept. 2007.
26. James K. Boyce and Léonce Ndikumana, 'Africa's debt: who owes whom?', final chapter in Gerald A. Epstein, ed., Capital flight and capital controls in developing countries (Aldershot: Edward Elgar, 2005). Capital flight overlaps significantly with corrupt money, though this depends on how each is measured.
27. The author must declare an interest here: he has been providing consultancy services for the Tax Justice Network.
28. www.development-today.com, 6 March 2007, accessed 23 Sept. 2007.
29. I am grateful to John Christensen of the Tax Justice Network, who offered this second phrase as a way of thinking about corruption.
30. John Christensen, Raymond Baker and Emma Lochery have all been involved in recent discussions with the author about how to frame corruption better. These discussions are ongoing.
31. See Luigi Bosco and Luigi Mittone, 'Tax evasion and moral constraints: some experimental evidence', Kyklos 50:3, 1997, pp. 297-324;
32. Mittone, 2006; also Cobham, 'The tax consensus has failed!'.
33. 'Italy changes rules of tax-evasion game', International Herald Tribune, 13 June 2007.
34. 'Corporations' taxes are falling even as individuals' burden rises', New York Times, 20 Feb. 2000.
35. Shaxson, Poisoned wells, p. 208.
36. www.minfin.gv.ao, 'Exportações de Petroleo', accessed 23 Sept. 2007.
37. Nancy Birdsall and Arvind Subramanian, 'Saving Iraq from its oil', Foreign Affairs 83: 4, July-Aug. 2004, pp. 77-89.
38. Several such studies exist. See e.g. Jorge M. Agüero, Michael R. Carter, Ingrid Woolard, The impact of unconditional cash transfers on nutrition: the South African Child Support Grant (Washington DC: Center for Global Development, 2006).
39. Birdsall and Subramanian, 'Saving Iraq from its oil'.
40. Republic of Angola National Opinion Poll, 29 June-6 Sept. 2006, International Republican Institute/USAID and Consulform, Lda and American Viewpoint, Inc., poll published 8 Dec. 2006.
41. Martin Sandbu describes several other related benefits, and outlines in detail ways in which such a scheme might be implemented, in 'Natural wealth accounts: a proposal for alleviating the natural resource curse', World Development 34 : 7, 2006, pp. 1153-70.
42. Moore and Unsworth, 'How does taxation affect the quality of governance'.
43. For some options see Sandbu, 'Natural wealth accounts', with thanks to him for useful comments.