There is a long, paradoxical, and tragic tradition of resource-rich developing countries suffering from prolonged economic stagnation. This “resource curse” is costly both in terms of economic and human development. The cure for this economic and political disease is the adoption of the core principles of the Index of Economic Freedom – limited government, decentralized power, and private property rights.
But how are these policies to be adopted in practice? Through stronger governing institutions, the rule of law, and other best practices. Bad institutions can lead a country into turmoil when abundant resources are available to a corrupt regime that undermines the relationship between citizens and their state. Likewise, good institutions can help a nation make the most of its natural endowments.
Dr. Todd Moss has explored these issues in depth. His recent book, “The Governor’s Solution: How Alaska’s Oil Dividend Could Work in Iraq and Other Oil-Rich Countries,” explores a policy option – direct distribution of resource revenues – to encourage a “social contract” in resource-rich countries. The income generated from resources can be distributed directly to citizens and then taxed by governments. With a personal stake in the government’s budget, the citizens could then hold the government accountable for providing goods and services with their taxes. Lead Economist Francisco Ferreira from the World Bank’s Development Research Group and Visiting Senior Policy Analyst at Heritage Sergio Daga have studied the effectiveness of cash transfer schemes in Latin American countries and will comment.
Join us for an interesting discussion of how better property rights and government accountability can guide countries away from the “oil curse.”
More About the Speakers
Dr. Todd Moss
Vice President for Programs and Senior Fellow, Center for Global Development
Francisco Ferreira, PhD.
Lead Economist, Development Research Group, World Bank
Visiting Senior Policy Analyst for Latin America, The Heritage Foundation,
and Director, POPULI, Santa Cruz, Bolivia
James M. Roberts
Research Fellow For Economic Freedom and Growth