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A Note on Revenue Distribution Patterns and Rent-Seeking Incentive

Author

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  • Elkhan Richard Sadik-Zada

    (Institute of Development Research and Development Policy, Ruhr-Universit t Bochum, Germany)

  • Wilhelm Loewenstein

    (South African-German Centre of Development Research, University of the Western-Cape, South Africa)

Abstract

This paper presents a simple model of rent-seeking incentive to explain the emergence and dominance of the rapacious rent-seeking policies in a number of oil abundant developing and transition economies. The Hubbertian distribution of the commodity exports over time, the magnitude of these revenues, and the availability of offshore havens for the illicitly appropriated rent explain the shift from productive public policies to rapacious rent-seeking. In addition, we show that the existence of the well-functioning democratic institutions prior to the revenue boom precludes the emergence of rapacious rent-seeking institutions due to prohibitively high costs of rent-seeking. The paper complements the existing literature by delivering a novel theoretical rationale for the predisposition of the oil-rich countries to the resource curse.

Suggested Citation

  • Elkhan Richard Sadik-Zada & Wilhelm Loewenstein, 2018. "A Note on Revenue Distribution Patterns and Rent-Seeking Incentive," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 196-204.
    • Handle: RePEc:eco:journ2:2018-02-26
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    References listed on IDEAS

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    Cited by:

    1. Radoslaw Wisniewski & Piotr Daniluk & Tomasz Kownacki & Aneta Nowakowska-Krystman, 2022. "Energy System Development Scenarios: Case of Poland," Energies, MDPI, vol. 15(8), pages 1-31, April.
    2. Elkhan Richard Sadik-Zada & Wilhelm Loewenstein, 2020. "Drivers of CO 2 -Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses," Energies, MDPI, vol. 13(15), pages 1-24, August.
    3. Elkhan Richard Sadik-Zada, 2020. "Distributional Bargaining and the Speed of Structural Change in the Petroleum Exporting Labor Surplus Economies," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(1), pages 51-98, January.
    4. Sadik-Zada, Elkhan Richard & Gatto, Andrea, 2021. "The puzzle of greenhouse gas footprints of oil abundance," Socio-Economic Planning Sciences, Elsevier, vol. 75(C).
    5. Elkhan Richard Sadik‐Zada, 2021. "Natural resources, technological progress, and economic modernization," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 381-404, February.
    6. Pål Østebø Andersen & Jan Inge Nygård & Aizhan Kengessova, 2022. "Prediction of Oil Recovery Factor in Stratified Reservoirs after Immiscible Water-Alternating Gas Injection Based on PSO-, GSA-, GWO-, and GA-LSSVM," Energies, MDPI, vol. 15(2), pages 1-35, January.
    7. Sadik-Zada, Elkhan Richard & Gatto, Andrea & Scharfenstein, Manuel, 2023. "Sustainable management of lithium and green hydrogen and long-run perspectives of electromobility," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    8. Jianguo Du & Jing Zhang & Xingwei Li, 2020. "What Is the Mechanism of Resource Dependence and High-Quality Economic Development? An Empirical Test from China," Sustainability, MDPI, vol. 12(19), pages 1-17, October.
    9. A. Suresh & P. Krishnan & Girish K. Jha & A. Amarender Reddy, 2022. "Agricultural Sustainability and Its Trends in India: A Macro-Level Index-Based Empirical Evaluation," Sustainability, MDPI, vol. 14(5), pages 1-23, February.
    10. Niftiyev, Ibrahim, 2022. "Exclusive Linear Modeling Approach to the Natural Resource Curse in the Azerbaijani Economy: Examples of Stepwise Regression," EconStor Preprints 266036, ZBW - Leibniz Information Centre for Economics.
    11. Sadik-Zada, Elkhan Richard, 2023. "Resource rents, savings behavior, and scenarios of economic development," Resources Policy, Elsevier, vol. 81(C).
    12. Elkhan Richard Sadik-Zada, 2021. "Addressing the growth and employment effects of the extractive industries: white and black box illustrations from Kazakhstan," Post-Communist Economies, Taylor & Francis Journals, vol. 33(4), pages 402-434, May.
    13. Peter Ho & Bin Md Saman Nor-Hisham & Heng Zhao, 2020. "Limits of the Environmental Impact Assessment (EIA) in Malaysia: Dam Politics, Rent-Seeking, and Conflict," Sustainability, MDPI, vol. 12(24), pages 1-16, December.

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    More about this item

    Keywords

    Rent-Seeking; Illicit Appropriation; Hubbert Curve; Point-Source Resources; Institutions; Offshore Havens;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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