Principal investigator: Bruno Benevit
Original title: Does Information Break the Political Resource Curse? Experimental Evidence from Mozambique
Authors: Alex Armand, Alexander Coutts, Pedro C. Vicente and Inês Vilela
Location of the Intervention: Mozambique
Sample Size: 2.065 heads of household
Sector: Institutions
Primary Variable of Interest: Corruption
Type of Intervention: Dissemination of information
Methodology: OLS
Summary
The negative relationship between economic development and levels of natural resource exports is a topic historically addressed by economists. This phenomenon manifests itself in several African countries rich in oil and diamonds, commonly affected by civil conflicts and corruption. This article aimed to analyze how an information dissemination campaign regarding the discovery of a gas reserve in Mozambique affected indicators of access to information, violence, and corruption in 206 communities in the Cabo Delgado province. Using various measurement instruments for the outcome variables, the authors identified that broad access to information and citizen participation in public deliberations implies an increase in local mobilization and a reduction in violence and resource capture by elites and other activities. Rent-seeking.
- Policy Problem
Several countries suffer from the resource curse, a term coined by Auty (1993) that establishes a negative relationship between economic development and levels of natural resource exports. This situation has become evident in several African countries rich in oil and diamonds, commonly affected by civil conflicts and corruption. In the 1990s, African countries such as Nigeria, Angola, and Sierra Leone, rich in oil and diamonds, exemplified economies whose development was penalized by corruption and civil conflicts (Armand et al..
Economic theories regarding this phenomenon initially associated the establishment of favorable incentives with... rent seeking In economies, the presence of natural resources penalizes other, more productive economic activities. Consequently, this situation promotes dysfunctional political institutions insofar as the exploitation of such resources becomes centralized, generating conflicts through competition for the enjoyment of these resources.
Given the importance of the behavior of political agents, institutions that promote greater accountability to the population regarding the exploitation of natural resources become desirable. In this sense, evidence on policies that inhibit the capture of resources by political groups is fundamental for improving economic incentives associated with the exploitation of natural resources in countries.
- Implementation and Evaluation Context
The aim of this article was to investigate whether an information dissemination campaign regarding the discovery of natural gas reserves in the Rovuma Basin, northern Mozambique, affected access to information in local communities, resource capture by elites, violence, and citizens' perception of violence and its benefits. Through a broad coalition sponsored by international, national, and local institutions, the dissemination campaign consisted of a large-scale randomized field experiment in 206 communities in northern Mozambique, conducted between March and April 2017. Three approaches to information dissemination were used: (i) only to community leaders (treatment 1); (ii) to community leaders and citizens (treatment 2); and (iii) no dissemination (control). In addition, approximately half of the communities in treatment 2 also participated in deliberation modules regarding the priority of resource allocation resulting from the exploitation of the natural gas reserve.
The reserve is located in the province of Cabo Delgado and represents a discovery of 180 trillion cubic feet of natural gas (IMF, 2016). The province of Cabo Delgado is predominantly rural, with a total population of 1,8 million, and occupies the lowest position in human development among all provinces of Mozambique. The discovery represented the potential to transform the country into the world's third-largest exporter of liquefied natural gas (LNG) (Armand et al.(2020). Mozambique is a low-income country, ranked seventh worst in the world in terms of GDP per capita (World Bank, 2017), therefore, the possibility of natural gas exploration had the potential to substantially impact the country's economy.
- Policy/Program Details
The outreach campaign provided information regarding natural resources and related legal rights for the population, including the presentation of various laws related to land, mining, forestry, and fishing. The campaign also provided details about the discovery of the natural gas reserve in Cabo Delgado, the exploration plans, and the expected consequences for local communities in terms of revenue for the provincial government and job creation.
It is important to highlight that the campaign emphasized the rights of local communities to benefit from natural gas exploration, as established by Mozambican legislation. These rights include: being informed; having revenues invested locally; being compensated if directly affected; and having priority for employment in the extractive sector. Additionally, the campaign provided information on the success and failures of other resource-rich countries that have faced similar discoveries.
With regard to community leaders, they are the highest-ranking government representatives within each community, selected by the communities and recognized and remunerated by the state. They must be consulted when natural resources are acquired in the community, and when public aid or programs are to be implemented. Furthermore, their responsibilities include land allocation, administration of justice, rural development, and conducting formal ceremonies.
The campaign information was delivered primarily verbally due to the low literacy levels among the study participants. To this end, trained agents provided explanations of the information content in local languages, individually with local leaders in treatments 1 and 2, and in public meetings for treatment 2. In the case of treatment 2, at least one member of 91% of the families in the sample for this intervention participated in the meetings. Additionally, an informational pamphlet was distributed to leaders (treatments 1 and 2) and citizens (treatment 2) at community meetings. Furthermore, the informational pamphlet was also distributed door-to-door to community members (treatment 2).
- Method
The sample consisted of 206 communities, randomly selected from the list of all 454 polling locations in Cabo Delgado province. The samples were stratified into urban, semi-urban, and rural areas. The communities were randomly allocated into 4 blocks, with equal probability, to treatment 1, treatment 2 without the deliberation module, treatment 2 with the deliberation module, or to the control group.
The sets of outcome variables analyzed referred to aspects of violence, information and perception, and political outcomes. To this end, the article used a series of instruments that included administrative data on georeferenced violent events, behavioral data from structured community activities (SCAs) and field laboratory experiments, as well as survey-based measurements. Data on violent events are available for the entire period analyzed.
The set of violence variables encompassed the occurrence of violent events through two distinct bases, in addition to participation in violence (a binary variable in relation to the last 3 months) and citizens' sympathy for violence through questionnaires. The set of information and perception variables referred to awareness, knowledge of the reserve, and perception of benefits associated with the discovery of the natural gas reserve for the community and the respondent's household. Finally, the set of political outcome variables referred to the occurrence of resource appropriation by elites, favoritism or nepotism in the appointment of paid positions, interaction between citizens and leaders, fundraising for community funds, the ability of citizens to communicate with provincial and national leaders, and the result of an ACE that verifies the dichotomy between activities of rent seeking and entrepreneurship (the choice was made between citizen participation in meetings with district administrators, conducive to the practice of rent seeking, participation in an activity related to entrepreneurship). All outcome variables were normalized to standard deviations relative to the control group.
The analyses sought to identify the effects of the interventions on the outcome variables listed above through an ordinary least squares (OLS) specification. In addition to the analysis for each individual outcome variable, the authors also performed analyses on the aggregated outcome variables for subsets of the variables of violence, information and perception, and political outcomes.
- Main results
The results of the analyses for the aggregate variables demonstrated distinct effects between treatment 1, where only leaders had access to the campaign, and treatment 2, where the community as a whole had access to the campaign. Regarding the impact of treatment 1, the results indicated that this intervention significantly increased the probability of resource capture by elites, leaders, and citizens. Concerning the effect of treatment 2, the results showed a significant reduction in the occurrence of violent events and significant increases in the variables of citizens' perception of benefit, citizen mobilization, demand for government accountability, and citizens' information about resource discovery. Both treatments positively impacted leaders' information about the natural gas reserve.
The evidence identified in the analyses for the individual variables showed trends similar to the results found in the aggregate analysis. While treatment 1 did not show significant impacts on the violence variables, the results regarding the effect of treatment 2 indicated reductions in the occurrence of violent events and involvement in violence.
The results of the analyses for the outcome variables on information and perception regarding the discovery of the Cabo Delgado reserve indicate that treatment 1 only significantly affected the awareness and knowledge of leaders regarding the resources. On the other hand, treatment 2 resulted in significant gains in terms of access to information and community perception of the discovery. Treatment 2 positively affected the perception of benefits to the community and the citizens' homes. Additionally, this intervention led to increased awareness and knowledge for both leaders and citizens.
The results of the analyses for the policy outcome variables indicated significance in several aspects. In terms of resource capture by elites, it was identified that treatment 1 increased the appropriation of public resources and favoritism/nepotism. Regarding variables of rent seekingIt was identified that both treatments positively affected the interaction between leaders, and that treatment 1 increased interaction between citizens and leaders and participation in meetings with the district administrator. Treatment 2 was also significant in mobilizing citizens, increasing participation in meetings and fundraising for community funds, as well as the ability to communicate between citizens and provincial and national leaders.
- Lessons in Public Policy
The authors of this article demonstrated that restricted access to information about the Cabo Delgado reserve for leaders led to the misappropriation of public resources, favoritism/nepotism, and the practice of... rent seekingHowever, when the campaigns reached the entire community, no impacts favoring resource capture by the elites were identified. According to the authors, this phenomenon appears to be related to the significant increase in knowledge about the discovery and in the community's awareness of their rights to the natural gas reserve resources, implying increased scrutiny and accountability of the elites' actions. Furthermore, the results suggest that the improved perception of gains by the community implies an increase in the costs of participating in conflicts, a likely explanation for the observed reduction in violence indicators.
The evidence presented in this article has enhanced our understanding of how the resource curse manifests itself and what incentives are associated with it. In particular, policies that promote transparency, societal participation in decision-making, and accountability of political leaders indicate improvements in institutions in terms of resource allocation and conflict reduction.
References
Armand, A., Coutts, A., Vicente, PC, and Vilela, I. (2020) Does Information Break the Political Resource Curse? Experimental Evidence from Mozambique. American Economic Review, 110(11), 3431-3453.
Auty, RM (1993) Sustaining Development in Mineral Economies: The Resource Curse Thesis. Routledge, London; New York.
World Bank. (2017) World Development Indicators 2017World Bank, Washington, DC.
International Monetary Fund (IMF). (2016) “Republic of Mozambique.” IMF Country Report 16/10. Washington, DC: International Monetary Fund.
