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Does transparency pay? Natural resources, financial development and the extractive industries transparency initiative (EITI)

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  • Kinda, Harouna
  • Mien, Edouard

Abstract

Natural resources are known to hinder financial development in countries with weak institutions. We hypothesize that the Extractive Industries Transparency Initiative, an international norm aimed at promoting transparency in natural resource management, can mitigate this effect. Using fixed effects and entropy balancing methods, we provide empirical support for this hypothesis in a panel of 71 resource-rich countries between 1995 and 2019. Our results are robust to the use of alternative specifications and alternative measures of financial development. Finally, we provide a discussion of the transmission channels through which the financial resource curse may occur.

Suggested Citation

  • Kinda, Harouna & Mien, Edouard, 2024. "Does transparency pay? Natural resources, financial development and the extractive industries transparency initiative (EITI)," World Development, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:wdevel:v:179:y:2024:i:c:s0305750x24000731
    DOI: 10.1016/j.worlddev.2024.106603
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    More about this item

    Keywords

    Financial development; Resource curse; Natural resources; Transparency;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • 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

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