Transparency in oil-rich countries and the importance of democracy
How does one make sure that revenues from oil benefit the citizens of oil-rich countries? In a number of countries, rents from oil production have increased corruption and impaired development rather than brought prosperity. To avoid being affected by this so-called resource curse, a country needs good institutions of democratic accountability in order to reduce the possibility of politicians misusing oil rents to secure political power.
Transparency has been suggested as one important means by which to increase the accountability of politicians in oil-rich countries, resulting in international initiatives, such as the Extractive Industries Transparency Initiative (EITI). Despite this it is unclear what effect, if any, transparency has on democratic accountability. This article presents preliminary evidence that democratic accountability leads to transparency rather than the other way around. If this is the case, transparency initiatives are not the place to start in improving conditions in resource-rich countries.
