Sara Torregrosa Hetland
Senior lecturer
Resource abundance and public finances in five peripheral economies, 1850-1939
Author
Summary, in English
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.
Department/s
- Department of Economic History
Publishing year
2020
Language
English
Publication/Series
Lund Papers in Economic History: General Issues
Issue
2020:216
Full text
Document type
Working paper
Publisher
Department of Economic History, Lund University
Topic
- Economic History
Keywords
- H20
- N40
- N50
- O13
- Q32
- resource curse
- taxation
- Latin America
- Scandinavia
- rentier state
- fiscal contract
Status
Published
Project
- Sustainable development, Fiscal policy and Natural resources management. Bolivia, Chile and Peru in the Nordic countries’ mirror