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Oil for Uganda – or Ugandans? Can Cash Transfers Prevent the Resource Curse? - Working Paper 261

Author

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  • Alan Gelb and Stephanie Majerowicz

Abstract

In 2009, commercially exploitable reserves of oil were found in the Albertine Lakes Basin in Uganda. Along with a number of new oil exporters, Uganda now faces the challenge of using the new resources to advance its development agenda, while avoiding the corrosive effects oil often has on governance. This paper considers the tradeoffs and potential impact of alternative uses of the oil rent. It argues that alternative approaches towards absorbing rents should be judged from two perspectives – the direct impact on growth and living standards, and the indirect effect on governance. The Ugandan authorities favor using the oil revenues to build much-needed infrastructure; while this could have very large benefits, evidence of Uganda’s already deteriorating governance and mounting corruption raise questions about its capacity to wisely invest the oil revenues. This paper considers an alternative—distributing oil rents to the population through cash transfers—as a potential tool to mitigate some of the governance risks associated with oil revenues by giving Ugandan citizens a stake in their own resource wealth, and considers the strengths and limitations of such an approach.

Suggested Citation

  • Alan Gelb and Stephanie Majerowicz, 2011. "Oil for Uganda – or Ugandans? Can Cash Transfers Prevent the Resource Curse? - Working Paper 261," Working Papers 261, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:261
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    File URL: http://www.cgdev.org/content/publications/detail/1425327
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    Citations

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    Cited by:

    1. Jun Rentschler & Morgan Bazilian, 2017. "Policy Monitor—Principles for Designing Effective Fossil Fuel Subsidy Reforms," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(1), pages 138-155.
    2. Hertog, Steffen, 2020. "Reforming wealth distribution in Kuwait: estimating costs and impacts," LSE Research Online Documents on Economics 105564, London School of Economics and Political Science, LSE Library.
    3. Bhorat, Haroon & Chelwa, Grieve & Naidoo, Karmen & Stanwix, Benjamin, 2017. "Income Inequality Trends in sub-Saharan Africa: Divergence, determinants and consequences: Resource Dependence and Inequality in Africa: Impacts, consequences and potential solutions," UNDP Africa Reports 267645, United Nations Development Programme (UNDP).
    4. Steve Kayizzi-Mugerwa, 2020. "Uganda's nascent oil sector: Revenue generation, investor-stakeholder alignment, and public policy," WIDER Working Paper Series wp-2020-175, World Institute for Development Economic Research (UNU-WIDER).
    5. Frankel, Jeffrey A., 2012. "The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions," Scholarly Articles 8694932, Harvard Kennedy School of Government.
    6. Todd Moss & Stephanie Majerowicz, 2012. "No Longer Poor: Ghana’s New Income Status and Implications of Graduation from IDA," Working Papers 300, Center for Global Development.
    7. repec:rac:ecchap:2017-07 is not listed on IDEAS
    8. Bressand, Albert, 2014. "Proving the old spell wrong," Research Report 14012-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    9. UNDP Regional Bureau for Africa & Haroon Bhorat & Grieve Chelwa & Karmen Naidoo & Benjamin Stanwix, "undated". "Resource Dependence and Inequality in Africa: Impacts, consequences and potential solutions," UNDP Africa Policy Notes 2017-07, United Nations Development Programme, Regional Bureau for Africa.
    10. repec:dgr:rugsom:14012-gem is not listed on IDEAS
    11. Véronique Robichaud & Luca Tiberti & Hélène Maisonnave, 2014. "Impact of increased public education spending on growth and poverty in Uganda. An integrated micro-macro approach," Working Papers MPIA 2014-01, PEP-MPIA.

    More about this item

    Keywords

    Oil Rents; Resource Curse; Cash Transfers;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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