Practical Steps to Help Countries Overcome the Resource Curse

The Extractive Industries Transparency Initiative

Bibliographic Data

ID12430492
AuthorsGeorg Caspary (corresponding author)
Year2012
Volume18
Issue2
Pages171-184
Publication date2012-08-12
Open AccessNo
TypeARTICLE
VenueGlobal Governance A Review of Multilateralism and International Organizations (JOURNAL)
Journal identifiersISSN: 1075-2846 • E-ISSN: 1942-6720
PublisherLynne Rienner Publishers (PUBLISHER • US)
DOI10.1163/19426720-01802003
OpenAlexW1951200687
LanguageEN
Citations received7
References cited5

A RECENT SPECIAL ISSUE OF GLOBAL GOVERNANCE (VOL. 17, NO. 2) EXAMINED various dimensions of the so-called resource curse phenomenon, which describes situations in which extractive resources (oil, gas, and minerals) cause difficulties for public financial management and macroeconomic policy or, in the worst case, for society at large through problems such as prevalence of corruption or even risk of violence. The special edition also mentions appropriate governance responses to the resource curse in resource-rich countries. (1) However, while the collection of articles helpfully elucidates the many aspects of the resource curse, the discussion might benefit from a further contribution focused on the operational experience with programs to counter the resource curse. The present article attempts to provide this contribution. The introduction to the special issue of Global Governance called for appropriate institutionalization of voluntary multistakeholder initiatives with greater engagement on the part of emerging economies. Therefore, in this article, I focus on the attempts of the World Bank Group (WBG) (2) to promote effective governance in its operations in the extractive industries (El) sector in developing countries, notably in the context of what is arguably one of the most prominent global attempts at combating the resource curse through precisely a voluntary multistakeholder initiative: the implementation of the Extractive Industries Transparency Initiative (EITI). In the next section, I discuss WBG's historical and present involvement in governance work in resource-rich countries. I then describe the value chain approach to El governance. I move on to the implementation of the EITI as part of the value chain approach and its results to date. I conclude with current and upcoming steps in combating the resource curse, notably how (especially high-performing) EITI implementing countries can go further toward broader resource-related governance work and how this work can be sustained over time (e.g., by strengthening the demand for good resource governance through a capacitated local civil society). The World Bank's Involvement in Governance Improvements of Resource-rich Countries Until well into the 1990s, governance and corruption arguably played little of a role in the WBG's operational work. This was based on a reluctance to confront corruption and a narrow reading of the WBG's Articles of Association, which were interpreted as to allow the WBG to work only on economic development issues, not political ones. (3) Governance and anticorruption work were considered to fall into the latter. (4) By the mid-1990s this attitude had changed, with President James D. Wolfensohn publicly acknowledging in 1996 the role of corruption in hindering development. (5) In addition, two circumstances external to the WBG led to an increased focus on the quality and efficiency of foreign aid, (6) which included a greater focus on improving governance structures to underpin development efforts. (7) The first of these circumstances was the end of the Cold War, which meant an end to the incentives (much maligned by some commentators) for donors to provide aid in line with geopolitical or strategic expediency. (8) The second circumstance that favored aid quality and effectiveness was the general pressure on public budgets in Organisation for Economic Co-operation and Development (OECD) countries. (9) In September 1997, the WBG Board endorsed the World Bank's operational anticorruption guidelines for staff, (10) and in parallel, the 1997 World Development Report deepened global understanding that an effective state is crucial for development. In 2000, the WBG Board endorsed a Public Sector Governance Strategy that recognized corruption as an outcome of a poorly functioning governance system. (11) After a lengthy global consultation process on what the engagement of the WBG in the governance arena should look like, the Governance and AntiCorruption (GAC) strategy was endorsed by the board in 2007

Accountability · Business · Context (archaeology · Corporate governance · Curse · Development economics · Economics · Global governance · Language change · Management · Natural resource · Political science · Resource (disambiguation · Resource curse · Sociology · Transparency (behavior · Corruption and Economic Development · Law · Mining and Resource Management · Natural Resources and Economic Development

Tools

Open DOI