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Natural Resource Windfalls In Nonproducing Areas

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  • Ome, Alejandro
  • Pérez, Javier

Abstract

We study the impact of natural resource royalties on educational outcomes in Colombia. We analyze a reform enacted in 2012 that made the distribution of these royalties more equitable. Before the reform, most royalties were assigned to the regions where the natural resources were exploited; with the reform non-producing regions started to receive royalties. We estimate the impact of the reform on regions that most benefited from it, using the international price of oil as an instrument in a difference-in-differences framework. We found positive impacts on enrollment in primary, secondary, and high schools, but no conclusive evidence on academic achievement at any of these levels.

Suggested Citation

  • Ome, Alejandro & Pérez, Javier, 2022. "Natural Resource Windfalls In Nonproducing Areas," IDB Publications (Working Papers) 12287, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:12287
    DOI: http://dx.doi.org/10.18235/0004320
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    References listed on IDEAS

    as
    1. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    2. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1384-1421.
    3. Gallego, Jorge & Maldonado, Stanislao & Trujillo, Lorena, 2020. "From curse to blessing? institutional reform and resource booms in Colombia," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 174-193.
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    More about this item

    Keywords

    royalties; public finance; instrumental variables; transformación productiva; Extractivas; región andina; Andea Region;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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