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Edited by Susan Rose-Ackerman and Tina Søreide
Chapter 12: Oil, Corruption, and Vote-buying: A Review of the Case of São Tomé and Príncipe
1 Pedro C. Vicente Because there is oil. It is the salvation of the island, small insular African state. Is it? (Lenin Oil, by Pedro Rosa Mendes, fiction) 1. Introduction The effect of natural resources on development has become a major issue in the recent development policy debate. Countries such as Angola, Nigeria, and Sierra Leone have shown that extremely valuable natural resources, for example, oil and diamonds, can distort political incentives, lower growth and development, and ultimately lead to civil conflict. The most dramatic situations in African development over the last decades were probably associated one way or another with the holding of precious resources by a few. The economics and political science literatures have been trying to identify with precision the causes and mechanisms of this ‘natural resource curse’. Many studies have quantified the link between resources and development outcomes. However, not much has been done to disentangle the mechanisms that lead from cause to ultimate outcome. Uncovering those mechanisms has been our goal in a series of recent articles reviewed here. One of the possible theories for the natural resource curse, due to Robinson et al. (2006), is that once a resource boom is anticipated, unrestrained politicians, or in other words, politicians living in a weak institutional environment, will spend substantial resources trying to gain political power, and will distort the allocation of resources in the rest of the economy. Even though it was not made explicit by Robinson et al., this process may entail an increase...
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