Ownership Risk, Investment, and the Use of Natural Resources

Ownership Risk, Investment, and the Use of Natural Resources Abstract The effect of insecure ownership on ordinary investment and natural resource use is examined. Insecure ownership is postulated to depend on the type of government regime in power and the prevalence of political violence or instability. The political determinants of economywide investment are estimated from cross-country data, and the results are used to form an index of ownership security. When introduced into empirical models of natural resource use, this index has a significant and quantitatively important effect on the use of forests and petroleum. Contrary to conventional wisdom, ownership risk slows resource use in some circumstances. (JEL Q20, Q30, E22 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

Ownership Risk, Investment, and the Use of Natural Resources

American Economic Review, Volume 90 (3) – Jun 1, 2000

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Publisher
American Economic Association
Copyright
Copyright © 2000 by the American Economic Association
Subject
Articles
ISSN
0002-8282
DOI
10.1257/aer.90.3.526
Publisher site
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Abstract

Abstract The effect of insecure ownership on ordinary investment and natural resource use is examined. Insecure ownership is postulated to depend on the type of government regime in power and the prevalence of political violence or instability. The political determinants of economywide investment are estimated from cross-country data, and the results are used to form an index of ownership security. When introduced into empirical models of natural resource use, this index has a significant and quantitatively important effect on the use of forests and petroleum. Contrary to conventional wisdom, ownership risk slows resource use in some circumstances. (JEL Q20, Q30, E22 )

Journal

American Economic ReviewAmerican Economic Association

Published: Jun 1, 2000

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