Natural Resources and Sovereign Expropriation
Note that the earlier project III.12 is merged into this project. An important question for governments of countries endowed with large natural resources is how to govern these resources, including choice of ownership structure and rights to exploitation. Questions of ownership and governance are inherently political and policies may change abruptly, following changes in government, changes in the value of the resources or other events. At the same time, the type and quality of governance is crucial for the efficient exploitation of natural resources. In this project we study such issues, including how the regime governing natural resources depends on political and economic factors, as well as how such factors, through their influence on the regime, affect the efficiency of resource exploitation.
One part of this subproject ("Nationalization of natural resources") concerns how resource owners will behave under risk of losing their resource due to nationalization, and how this risk in turn affects the incentives for governments to nationalize such resources and how world prices for resources may be affected by such interaction.
A final part of this subproject is the analysis of resource taxation. This is performed in the project "Finders Keepers?". The project aims at understanding to what extent resource exploration firms will get to keep their findings.