By Todd Moss
What should still a rustic do if it all of sudden discovers oil and gasoline? How may still it spend the following funds providence? How can it shield opposed to corruption? How can voters really take advantage of nationwide wealth? With a few of the world's poorest and such a lot fragile states abruptly becoming a member of the ranks of oil and gasoline manufacturers, those are urgent coverage questions.
Oil to Cash explores one choice which could support keep away from the so-called source curse: simply supply the money on to electorate. A common, obvious, and normal funds move wouldn't purely offer a concrete gain to standard humans, yet could additionally create robust incentives for voters to carry their govt liable. Oil to Cash information how and the place this concept may well paintings and the way policymakers can examine from the studies with money transfers in locations like Mexico, Mongolia, and Alaska.
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Additional info for Oil to Cash: Fighting the Resource Curse through Cash Transfers
57 51. Bornhorst, Gupta, and Thornton (2009). 52. Moore (2007). 53. Tilly (1975); Bräutigam, Fjeldstat, and Moore (2008). 54. Moore (2008, p. 26). 55. Altunbas and Thornton (2011). 56. OECD (2008). 57. Hoffman and Gibson (2006). The Devil’s Excrement? 47 Taxpayers usually want a say in how their money is spent. ”60 Governments that rely on taxation for revenue have a greater incentive to promote their national economies than governments that live off natural resource rents. When governments are funded by oil revenues, they can afford to be indifferent to the fate of nonoil sectors, but if their revenues are tied to the performance of the broader economy, fostering economic development becomes a matter of self-interest.
Authors’ calculations based on data from the South African Treasury. 85. Grosh and others (2008). 86. Grosh and others (2008). 87. Grosh and others (2008). Giving Money Directly to the Poor 27 According to the United Nations’ International Labor Organization, some minimal level of social protection can be affordable even in poor countries. 6 percent for poorer ones (such as Tanzania), with costs diminishing over time in most countries. 89 One analysis of the fiscal space available for cash transfers concluded that countries should proceed with caution.
68 In most countries, however, meeting the extra demand for services requires adjusting supply and facilitating transport. Where they are not already available, governments may need to build new classrooms and clinics. Mexico, for instance, refurbished rural primary schools and built secondary schools, while mobile health teams expanded into underserved areas. Bangladesh’s share of education in social spending almost doubled to expand the schooling system, and an increase in private schools also helped fill the gap.