Endogenous taxation of natural resources and political (in)stability
Why do some governments receive greater shares of revenues from resource endowments? When these revenues reach government hands, do they consolidate the regime? Or, do they lead to instability? I propose to answer these questions using a two-stage research design. First, I will examine why countries receive greater or lesser shares of resource revenues and why some governments receive a greater share of these revenues in the form of signatory bonuses. I am particularly interested in how bargaining between developing countries, state-owned firms, international extraction companies, and international institutions affects taxation in the resource sector. Second, I will test for a causal relationship between the government’s share of resource revenue and political stability by using instrumental variables to account for endogeneity at the cross-national level. I also propose a regression discontinuity design to test the effects of government reliance on resource revenues at the subnational level in Peru.
Breaking It Down: The Determinants of Bilateral Aid Fragmentation
(with Elizabeth Sperber)
This article argues that aid donors break aid into smaller projects in order to increase control over aid expenditure within recipient countries. Using a principal-agent framework, in which donors are principals and recipients are agents, we analyze the determinants of aid fragmentation for 22 donor countries, 1973-2008. Three broad patterns in bilateral development aid emerge. First, the end of the Cold War is an important structural break in patterns of aid allocation for some donors, including the US. Second, we find that donors condition aid fragmentation on regime type and bureaucratic quality of recipient countries. Third, we find evidence that the relative bargaining power between donors and recipients shapes aid allocation decisions.
This paper was presented at Oxford University (March 2010) and New York University (May 2010). We will present a paper applying our theory to just the US case at APSA in September 2011.
See this paper featured on Bill Easterly’s AidWatchers blog and on Jim Vreeland’s blog, The Vreelander.
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