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FRIHUMSAM-Fri hum og sam

From a Curse to a Blessing? Transparency and Accountability in Managing High-Value Natural Resource Revenues

Alternative title: Fra forbannelse til velsignelse? Åpenhet og ansvarlighet i forvalting av inntekter fra verdifulle naturresurser

Awarded: NOK 3.5 mill.

High-value natural resources, such as oil, gemstones, and minerals, are a source of unusually large rents that, without mitigating safeguards, can provide incentives for crony capitalism, patronage, corruption, and rent-seeking. Since the 1990s, the international community has attempted to improve natural resource revenue governance by promoting transparency in resource rich, developing countries. In fact, transparency has in many cases even become a prerequisite for obtaining investment, debt relief, loans and aid from donors, multinational financing institutions, and extractive industry companies. This project has sought to (1) obtain robust empirical evidence indicating whether transparency initiatives that seek to disclose information on natural resource revenue management to the citizens are attaining their intended objective - namely, better natural resource revenue governance - and (2) to understand the obstacles in the transparency process. The project draws five key conclusions. First, the project did not find robust empirical evidence indicating that the transparency initiatives studied have significantly improved natural resource revenue governance through the 'informed public' channel. Second, the project results indicate that the key assumption behind the transparency process - the active participation of better informed citizens - appears often to fail already at the point of getting relevant information to the citizens. Third, the results indicate that turning information on natural resource revenue management into changes in people's attitudes and behavior can be a demanding process and requires strong and persistent support: More information alone is unlike to change the status-quo. Fourth, one of the key obstacles in the transparency process seems to be the 'Illusion of transparency': Governments and other actors believe themselves to be transparent as they make information public, but there is no substantial transparency as most people are not actually receiving the available information, or what they receive is not useful for them. Another key obstacle for transparency to be successful is that the transparency narratives put unrealistic expectations on citizens as the agents of good governance. Fifth, transparency may not always be inherently good. Information disclosure may in some instances have a disempowering effect on already marginalized people as it can empower already better-off groups or individuals. Further, in some cases, information disclosure is used to build trust and ease suspicion among the citizens when this should not have been the case, thereby (problematically) supporting the status quo in cases where change is needed.

TrAcRevenues team members have published 13 articles and 1 book chapter and have 7 other project publications (3 research blog entries, 2 policy briefs, 2 reports). The team members have given over 60 presentations at seminars, workshops and conferences, 8 of them having been directed to project's user groups. In addition, the members have 3 papers under review and nearly complete manuscripts exists for further 6 papers. Two more manuscripts and two policy briefs are under work. TrAcRevenues results have implications for donor and national policy in resource-rich developing countries. So far, the project has disseminated results to user groups through a policy brief on the EITI, policy briefings in Oslo June 2018 and in Accra April 2018, sharing results directly with the EITI Secretariat in Oslo, Norad and PIAC (Public Interest and Accountability Committee for petroleum revenue management in Ghana), and trough blogs.

The increase in demand and prices of most high-value natural resources over the past five decades has resulted in massive income gains for resource-abundant countries. Paradoxically, many of these countries have suffered from slow economic growth, weak po litical institutions, and violent conflict. This project focuses on transparency as a specific approach actively promoted by the international community and campaigning groups to temper the resource curse in countries riddled with crony capitalism, corrup tion, patronage, and conflict over resource revenues. There is limited theoretical foundation and empirical support for the proposition that transparency leads to more accountability in resource-rich developing countries. This project studies the extent to which increased transparency can help transform natural resource riches in developing countries into a blessing rather than a curse, with particular focus on two key existing transparency initiatives - Extractive Industries Transparency Initiative (EIT I) and trust funds. The main challenge the project faces is the inherent complexity of the topic and the involvement of several stakeholders in such initiatives. Each of the multiple actors have wide-ranging economic and political interests which often a re in conflict with each other or with the initiatives' objectives of increasing transparency and accountability. This is further compounded by the wide-ranging regulatory environments that can promote or inhibit such initiatives. Therefore, the project a ssembles a team of leading experts in economics, political science, geography, and law with backgrounds in field work, qualitative and quantitative methods, formal theory modeling, policymaking, and administration. The project will generate research and knowledge important to a range of users, including national and sub-national government agencies, local communities, NGOs, the private sector, and international organizations working in developing countries.

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FRIHUMSAM-Fri hum og sam