The Impact of Oil Windfalls on Subnational Living Standards: Evidence from Argentina

LUCAS GONZALEZ; GERMAN LODOLA

Lima

Congreso; XXXV International Congress of the Latin American Studies Association; 2017

Latin American Studies Association, LASA

This article analyses the impact of oil and gas rents on subnational development. A fundamental question in the literature on the socioeconomic effects of natural resource abundance is how to account for large variation in development outcomes across cases as different as Norway or Canada from others such as Iran, Nigeria, or Venezuela. We contend that the impact of oil and gas rents on development indicators largely depends on whether oil production concentrates income in enclave economies or redistribute wealth across the territory. The geographic concentration of oil production and fiscal institutions that regulate the redistribution of oil rents from oil producing districts mediate the effect of oil rents on development indicators. The study tests the argument using regression analysis and a difference-in-difference estimation in Argentina?s provinces that enjoy property rights over natural resources and determine their own systems of oil rent redistribution.