Do Natural Resources Inhibit Transparency?

Using a new dataset on transparency across 177 countries from 1970 to 2010 and new data on oil values that is measured independently of countries’ reporting mechanisms, we examine whether the presence of income derived from the extraction of oil and other mineral resources induces governance institutions to become less transparent. The new transparency data permits panel estimates that were not previously feasible, while the new oil data addresses an endogeneity problem otherwise inherent in countries’ own reporting of data to the World Bank, thus a major improvement over WDI data. Our results confirm the previous findings that the presence of oil adversely influences transparency, but contradict findings on mineral resources. Transparency is measured by the frequency and extent of data that countries report to international agencies. Our findings suggest that transparency is robustly and adversely linked to income from oil, but not other mineral resources. Conducting “era regressions,” we shed some light on the evolution of this effect across decades.   Arabic Abstract: