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Oil to Cash: Fighting the Resource Curse through Cash Transfers
This work has now concluded.
Natural resources and the income they generate can stifle development by undermining the relationship between citizens and their state. In a series of papers and a book, CGD’s Todd Moss proposed oil-to-cash—direct distribution of resource revenues—to encourage a “social contract” in resource-rich countries. The income generated by resource extraction can be distributed directly to citizens and then taxed by governments. With a personal stake in the government’s budget, the citizens could then hold the government accountable for providing goods and services with their taxes.
How should Uganda use its prospective oil revenues? Our recent paper on this question argued that choices should be considered with an eye towards both their development impact and the implications for governance. We are happy that the paper has sparked debate in Uganda, including discussions in the Daily Monitor by Tabu Butagira and Nick Young. As Nick Young correctly observes, the question of what to do with oil revenues should be debated in Uganda rather than in Washington. In hopes of provoking further informed debate locally, we wish to clarify a few points about our paper that seem to have been misunderstood.
Johnny West describes how an oil-dividend program could be structured by, for example, taking advantage of Iraq’s existing rationing system, ubiquitous mobile phone networks, and new biometric ID cards.
Uganda has sought to finance its development agenda with oil since discovering the resource in its Albertine Lakes Basin in 2009. This paper considers alternative methods for distributing the rents from oil that mitigate some of the governance risks associated with natural resource revenues.
This paper surveys the arguments for and against cash-transfer programs in resource-rich states, discusses some of the new biometric identification technologies, and reaches preliminary conclusions about their potentially very large benefits for developing countries.
The President of Gabon, a small petro-state wedged between Cameroon and Congo, has announced that he’s giving some of his inheritance back “to the people of Gabon.” It’s a good start, but surely he can do better.