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Rent-Seeking and Criminal Politicians: Evidence from Mining Booms

Author

Listed:
  • Sam Asher

    (Johns Hopkins SAIS)

  • Paul Novosad

    (Dartmouth College)

Abstract

We study how natural resource rents affect the selection and behavior of holders of public office. Using global price shocks to thirty-one minerals and nationwide geological and political data from India, we show that local mineral rent shocks cause the election of politicians charged with serious crimes. We also find a moral hazard effect: politicians commit more crimes and accumulate greater wealth when mineral prices rise during their terms in office. These politicians have direct influence over mining operations but no access to fiscal windfalls from mining; we thus isolate the direct political impacts of mining sector operations.

Suggested Citation

  • Sam Asher & Paul Novosad, 2023. "Rent-Seeking and Criminal Politicians: Evidence from Mining Booms," The Review of Economics and Statistics, MIT Press, vol. 105(1), pages 20-39, January.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:1:p:20-39
    DOI: 10.1162/rest_a_01064
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    Citations

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    Cited by:

    1. Rohit Ticku, 2023. "Votes for Sale," RSCAS Working Papers 2023/55, European University Institute.
    2. Singh, Sanjeet & Bhardwaj, Meenu & Mahendru, Mandeep & Bansal, Pooja & Roszko-Wójtowicz, Elżbieta, 2024. "Exploring economic development and mineral rents nexus across BRICS nations: Fresh insights from multiple threshold panel analysis," Resources Policy, Elsevier, vol. 88(C).
    3. Chakrabarti, Prasenjit & Kaur, Jasmeet, 2024. "Zombie-lending during the pandemic in India: Did the Central Bank reduce credit misallocation concerns of forbearance?," Journal of Policy Modeling, Elsevier, vol. 46(1), pages 153-170.
    4. Du, Weijian & Fan, Yuhuan & Liang, Sunfan & Li, Mengjie, 2023. "The power of belief: Religious traditions and rent-seeking of polluting enterprises in China," Finance Research Letters, Elsevier, vol. 54(C).
    5. Čellárová, Katarína & Staněk, Rostislav, 2024. "Contest and resource allocation: An experimental analysis of entitlement and self-selection effects," European Journal of Political Economy, Elsevier, vol. 82(C).
    6. Massimo Morelli & Dominic Rohner, 2023. "Natural resources and conflict: The crucial role of power mismatch and geographic asymmetries," Working Papers 698, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    7. Rodríguez-Puello, Gabriel, 2024. "Digging for Trouble? Uncovering the Link Between Mining Booms and Crime," OSF Preprints s8ayp, Center for Open Science.
    8. Aragón, Fernando M. & Winkler, Hernan, 2023. "The long-term impact of a resource-based fiscal windfall: Evidence from the Peruvian canon," Resources Policy, Elsevier, vol. 87(PA).

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