Political Economy and Natural Resource Use

López Ramón and Michael A. Toman

in Economic Development and Environmental Sustainability

Published in print June 2006 | ISBN: 9780199298006
Published online September 2006 | e-ISBN: 9780191603877 | DOI:

Series: Initiative for Policy Dialogue Series

 Political Economy and Natural Resource Use

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This chapter examines evidence on the four ways in which a nation’s political system and its natural resource use are linked. First, when property rights to resources are weak, competition to acquire resources can be wasteful and characterized by rent-seeking and violent conflict. Weak ownership claims are most likely in countries where the rule of law is not well-established. Second, when a country’s political system is unstable or non-representative, the individual’s claim to a resource stock’s future return can be rendered insecure, reducing the payoff to natural resource conservation. Third, when a country’s natural resources are capable of generating significant rents but institutions of democratic governance and the rule of law are not well-established, corruption by government officials responsible for resource management can encourage rent-seeking, dissipating the benefits those resources would otherwise confer. Fourth, the mix of private vs. public good outputs produced by a nation’s natural resources (e.g., forests) can be affected by its political system. When a country’s government does not represent the interests of the entire population, the use of resource stocks to provide public good amenities, as opposed to salable products, may be under-emphasized.

Keywords: property rights; rent-seeking; resource curse

Chapter.  15127 words.  Illustrated.

Subjects: Economic Development and Growth

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