Skip to main content

Lund University Publications

LUND UNIVERSITY LIBRARIES

Resource abundance and public finances in five peripheral economies, 1850-1939

Peres-Cajías, José ; Torregrosa-Hetland, Sara LU and Ducoing, Cristian LU (2020) In Lund Papers in Economic History: General Issues
Abstract
The resource curse literature has established that the taxation of natural resources might limit the long-term development of fiscal capacity in resource-rich countries. This article explores if, and how, natural resource abundance generates fiscal dependence on natural resource revenues. We compare five peripheral economies of Latin America (Bolivia, Chile, Peru) and Scandinavia (Norway, Sweden) over a period of 90 years, between 1850 and 1939. Both groups were natural resource abundant, but in the latter natural resource dependence decreased over time. By using a novel database, we find that fiscal dependence was low in Norway and Sweden, while high and unstable in Bolivia, Chile and Peru. This suggests that natural resource abundance... (More)
The resource curse literature has established that the taxation of natural resources might limit the long-term development of fiscal capacity in resource-rich countries. This article explores if, and how, natural resource abundance generates fiscal dependence on natural resource revenues. We compare five peripheral economies of Latin America (Bolivia, Chile, Peru) and Scandinavia (Norway, Sweden) over a period of 90 years, between 1850 and 1939. Both groups were natural resource abundant, but in the latter natural resource dependence decreased over time. By using a novel database, we find that fiscal dependence was low in Norway and Sweden, while high and unstable in Bolivia, Chile and Peru. This suggests that natural resource abundance should not be mechanically linked to fiscal dependence. An accounting identity shows that sudden increases in fiscal dependence were related to both economic and political factors: countries’ economic diversification, and attitudes of the relevant political forces about how taxation affects the companies operating in the natural resource sector. (Less)
Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
H20, N40, N50, O13, Q32, resource curse, taxation, Latin America, Scandinavia, rentier state, fiscal contract
in
Lund Papers in Economic History: General Issues
issue
2020:216
pages
47 pages
publisher
Department of Economic History, Lund University
project
Sustainable development, Fiscal policy and Natural resources management. Bolivia, Chile and Peru in the Nordic countries’ mirror
language
English
LU publication?
yes
id
6e6b199f-311a-4382-82ad-ba3ab55570d9
date added to LUP
2020-11-11 16:48:20
date last changed
2021-09-28 12:42:01
@misc{6e6b199f-311a-4382-82ad-ba3ab55570d9,
  abstract     = {{The resource curse literature has established that the taxation of natural resources might limit the long-term development of fiscal capacity in resource-rich countries. This article explores if, and how, natural resource abundance generates fiscal dependence on natural resource revenues. We compare five peripheral economies of Latin America (Bolivia, Chile, Peru) and Scandinavia (Norway, Sweden) over a period of 90 years, between 1850 and 1939. Both groups were natural resource abundant, but in the latter natural resource dependence decreased over time. By using a novel database, we find that fiscal dependence was low in Norway and Sweden, while high and unstable in Bolivia, Chile and Peru. This suggests that natural resource abundance should not be mechanically linked to fiscal dependence. An accounting identity shows that sudden increases in fiscal dependence were related to both economic and political factors: countries’ economic diversification, and attitudes of the relevant political forces about how taxation affects the companies operating in the natural resource sector.}},
  author       = {{Peres-Cajías, José and Torregrosa-Hetland, Sara and Ducoing, Cristian}},
  keywords     = {{H20; N40; N50; O13; Q32; resource curse; taxation; Latin America; Scandinavia; rentier state; fiscal contract}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{2020:216}},
  publisher    = {{Department of Economic History, Lund University}},
  series       = {{Lund Papers in Economic History: General Issues}},
  title        = {{Resource abundance and public finances in five peripheral economies, 1850-1939}},
  url          = {{https://lup.lub.lu.se/search/files/86656994/LUPEH_216.pdf}},
  year         = {{2020}},
}