Extractive Revenues & Local Resource Curse: Comparative Case Analysis in the Peruvian Andes
Pontificia Universidad Católica del Perú, Peru
The worst development outcomes, measured in poverty, inequality, and human development, are often found in those countries with the greatest natural resource endowments, which are currently key suppliers of required commodities to sustain the global economy. For this reason, an extensive debate has been dedicated to the resource curse theory as one of the most disseminated and controversial theories to explain development performance in resource rich countries. Nevertheless, fewer studies are focused on discussing the resource curse as a local phenomenon even though serious challenges for sustainable development are presented at this level, related with environmental impacts, extreme poverty, economic dependency, low economic diversification, social conflicts, corruption, among others. Under the Sustainable Development Goals Framework, this proposal highlights the need for new and innovative public policies to address those challenged posed by resource-based territories.
This proposal is based in a research recently concluded aimed to critically discussing to what extent the allocation of extractive revenues has determined conditions for the applicability of the local resource curse hypothesis in Peru. This research focused on the comparative analysis of two Provinces on the symptoms of the local resource curse, the contribution of public investment resulted from extractive revenues, and the factors inducing the allocation of funds in local governments. Findings have corroborated that a high level of revenue transfers to local governments without prior preparation and institutional capacities could be considered as a driver of local resource curse. This situation may be aggravated when the impact from public investment is not officially evaluated, there is a lack of citizen accountability, and overlapping roles between the private and public sector.