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No blessing, no curse? On the benefits of being a resource-rich southern region of Italy

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  • Iacono, Roberto

Abstract

The aim of this research is to examine the aggregate economic effects of large-scale oil extraction in Basilicata, a southern region of Italy. This paper is the first empirical attempt to test for a regional resource curse by constructing a comparison unit using synthetic control techniques. The comparison unit captures how Basilicata׳s economic activities would have evolved in the absence of the oil extraction industry. The negligible differences between economic parameters in Basilicata and in its comparison unit suggest that a large amount of oil extraction has had no detectable effect on Basilicata׳s economy. A set of tentative political economy explanations of the result of missing effects is also provided, based on control rights structure, the royalty tax rate and organized crime.

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  • Iacono, Roberto, 2016. "No blessing, no curse? On the benefits of being a resource-rich southern region of Italy," Research in Economics, Elsevier, vol. 70(2), pages 346-359.
    • Handle: RePEc:eee:reecon:v:70:y:2016:i:2:p:346-359
    DOI: 10.1016/j.rie.2015.03.003
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    Cited by:

    1. Rickman, Dan & Wang, Hongbo, 2020. "What goes up must come down? The recent economic cycles of the four most oil and gas dominated states in the US," Energy Economics, Elsevier, vol. 86(C).
    2. Roberto Iacono, 2015. "The Basilicata Wealth Fund: Resource Policy and Long-run Economic Development in Southern Italy," Working Papers 2015.96, Fondazione Eni Enrico Mattei.
    3. Viccaro, Mauro & Rocchi, Benedetto & Cozzi, Mario & Severino, Marino, 2015. "The socioeconomic impact derived from the oil royalty allocation on regional development," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207861, Italian Association of Agricultural and Applied Economics (AIEAA).

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    More about this item

    Keywords

    Natural resources; Oil royalties; Regional development; Synthetic Control Method; Basilicata;
    All these keywords.

    JEL classification:

    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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