Transparency in oil rich economies

Corruption is a serious problem in many developing countries that are rich in oil and other natural resources. This is central in explaining why resource rich countries perform badly in terms of socioeconomic development. Transparency has recently been viewed as a key factor in reducing corruption and other dysfunctions in natural resource rich countries.

The paper addresses the relationship between transparency and corruption, with an emphasis on oil rich countries. It provides a systematic overview of the available literature and arguments on transparency and corruption before reviewing the literature on information, corruption and development, in a resource rich context. Finally, using the case of Angola, the report focuses on some of the main corruption related problems caused by limited access to information. It also looks at the approach of current transparency initiatives, such as the Extractive Industries Transparency Initiative (EITI).

In general the paper finds that transparency, or access to information, can have an effect on corruption. Transparency can reduce bureaucratic corruption by making corrupt acts more risky, by making it easier to provide good incentives to public officials, and by easing the selection of honest and efficient people for public service. Transparency can reduce political corruption by helping make politicians more accountable to the public.