Taking off from Natural Resources? Fiscal dependence in Andean and Nordic countries, 1850s-1930s

Research output: Contribution to conferenceOtherpeer-review

Abstract

Natural resources can have a powerful impact on the public budget but may also hinder the development of other sources of revenue, thus limiting the long-term development of fiscal capacity in resource-rich countries. This article evaluates both possible effects bycomparing the long-term evolution (1850s-1930s) of public revenues in Andean (Bolivia,Chile and Peru) and Nordic (Norway and Sweden) countries. Both groups were naturalresource abundant during the period under scrutiny. In the latter, however, natural resources dependence decreased over time. We use this divergent pattern to explore if, and how, natural resources abundance generates a fiscal dependence on natural resources revenues. By using a novel detailed database, we find that fiscal dependence on natural resources revenues was low in Nordic countries and highly unstable in Andean countries.
This suggests that natural resources abundance should not be mechanically linked to tax dependence. Indeed, by using an accounting identity, we show that tax dependence on natural resources can be evaluated by looking at economic or political changes (or both) that affect either the natural resource sector or the non-natural resource sector.
Original languageEnglish
Publication statusPublished - 2019 Dec
EventRIDGE DECEMBER FORUM: Workshop in Economic History - Universidad de la República , Montevideo, Uruguay
Duration: 2019 Dec 22019 Dec 3
Conference number: XI
http://www.ridge.uy/wp-content/uploads/2019/12/programme-EH-v4.pdf

Workshop

WorkshopRIDGE DECEMBER FORUM
Country/TerritoryUruguay
CityMontevideo
Period2019/12/022019/12/03
Internet address

Subject classification (UKÄ)

  • Economic History

Keywords

  • Natural Resources curse
  • Taxation
  • Latin America
  • Scandinavia
  • Fiscal contract

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