Journal Articles

Political Risk, Reputation, and the Resource Curse

---

There is a growing literature on how natural resources affect both economic performance and political regimes. In this article the authors add to this literature by focusing on how natural resource wealth affects the incentives of governments to uphold contracts with foreign investors across all sectors. They argue that although all states suffer reputation costs from reneging on contracts, governments in natural-resource-dependent economies are less sensitive to these costs, leading to a greater probability of expropriation and contract disputes. Specifically, leaders weigh the benefits of reneging on contracts with investors against the reputation costs of openly violating agreements with firms. The authors’ theoretical model predicts a positive association between resource wealth and expropriation. Using a data set from the political risk insurance industry, the authors show that resource dependent economies have much higher levels of political risk.

---

Availability

No copy data

Detail Information

Series Title

Comparative Political Studies

Call Number

-

Publisher

Thousand Oak : sage publisher., 2011

Collation

-

Language

English

ISBN/ISSN

00104140

Classification

-

Content Type

-

Media Type

-

Carrier Type

-

Edition

Vol. 44 no. 6, June 2011.pp. 662-688

Subject(s)

Resource curse
Foreign direct investment
Political risk
Political Risk, Reputation, and the Resource Curse

Specific Detail Info

-

Statement of Responsibility

-

Other version/related

File Attachment

Comments

---

You must be logged in to post a comment