SavedAdd your journal

Journals / İstanbul İktisat Dergisi / 2022 / Cilt: 72 - Sayı: 2

Natural Resources and Rent Seeking Collusion in the Context of Dutch Disease

Anar MURADOV
Pages
599–623
Publication Date
2023-01-18
DOI
—
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The impact of the boom on national income depends on parameter values.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:A new model is proposed in this paper by concentrating on the Dutch disease phenomenon along with rent seeking to demonstrate how a natural resource abundance (or a resource boom) affects resource movement and national income under rent seeking collusion in the energy sector.
📊
Key Findings & Data:In the duopoly case (n=2), a sufficiently small degree of the boom is necessary for rent seeking to be facilitated.
💡
Conclusion & Impact:The impact of the boom on national income depends on parameter values.
🔬Design:Modeling & Simulation
📍Scope:Comprehensive Sample
⚙️Variables:Collusion · Rent-seeking · Dutch disease

Abstract

A new model is proposed in this paper by concentrating on the Dutch disease phenomenon along with rent seeking to demonstrate how a natural resource abundance (or a resource boom) affects resource movement and national income under rent seeking collusion in the energy sector. Dutch disease and rent seeking problems are studied under the natural resource curse theory which states that countries with natural resources usually perform worse than resource-poor countries. The resource movement is considered one of the effects of the Dutch disease. The resource movement occurrence or the movement of labor inputs from services to the energy sector depends on the degree of the boom. The boom may also facilitate rent seeking depending on its degree and the number of firms in the energy sector. In the duopoly case (n=2), a sufficiently small degree of the boom is necessary for rent seeking to be facilitated. However, with more than two firms (n>2), rent seeking activities will not happen because profits in collusion will be less than those without collusion in the model. Hence, the paper analyzes rent seeking by concentrating on duopoly results (n=2). The impact of the boom on national income depends on parameter values.

Özet

A new model is proposed in this paper by concentrating on the Dutch disease phenomenon along with rent seeking to demonstrate how a natural resource abundance (or a resource boom) affects resource movement and national income under rent seeking collusion in the energy sector. Dutch disease and rent seeking problems are studied under the natural resource curse theory which states that countries with natural resources usually perform worse than resource-poor countries. The resource movement is considered one of the effects of the Dutch disease. The resource movement occurrence or the movement of labor inputs from services to the energy sector depends on the degree of the boom. The boom may also facilitate rent seeking depending on its degree and the number of firms in the energy sector. In the duopoly case (n=2), a sufficiently small degree of the boom is necessary for rent seeking to be facilitated. However, with more than two firms (n>2), rent seeking activities will not happen because profits in collusion will be less than those without collusion in the model. Hence, the paper analyzes rent seeking by concentrating on duopoly results (n=2). The impact of the boom on national income depends on parameter values.

🔖

Cite This Article

MURADOV, A. (2023). Natural Resources and Rent Seeking Collusion in the Context of Dutch Disease. İstanbul İktisat Dergisi, Cilt: 72 - Sayı: 2, 599–623. https://ajindex.com/articles/877472

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (1)

  1. Auty, R. M. (2001a). The Political Economy of Resource-Driven Growth. European Economic Review, 45(4-6), 839-846. https://doi.org/10.1016/S0014-2921(01)00126-X google scholar Auty, R. M. (2001b). Resource Abundance and Economic Development. Oxford and New York: Oxford University Press. DOI:10.1093/0199275785.001.0001 google scholar Baland, J. M. & Francois, P. (2000). Rent-seeking and resource booms. Journal of Development Economics 61, 527- 542. https://doi.org/10.1016/S0304-3878(00)00067-5 google scholar Bertrand, L., & Céline, Q. (2015). What do we know about the sharing of mineral resource rent in Africa? Resources Policy, 46(2), 239-249. https://doi.org/10.1016/j.resourpol.2015.10.005 google scholar Bello, A., & Cavero, S. (2008). The Spanish retail petroleum: new patterns of competition since the liberalization of the industry. Energy Policy, 36, 612-626. https://doi.org/10.1016/j. enpol.2007.10.014 google scholar Bruno, M., & Sachs, J. (1982): Energy and Resource Allocation: A Dynamic Model of the Dutch Disease. Review of Economic Studies, 49(5), 845-859. https://doi.org/10.2307/2297191 google scholar Caselli, F., & Guy, M. (2013). Do Oil Windfalls Improve Living Standards? Evidence from Brazil. American Economic Journal: Applied Economics, 5(1), 208-238. DOI:10.1257/app.5.1.208 google scholar Cassing, J. H., & Warr, P. G. (1985). The Distributional Impact of a Resource Boom. Journal of International Economics, 18 (3-4), 301-319. https://doi.org/10.1016/0022-1996(85)90057-1 google scholar Chernova, E. G., & Razmanova, S. V. (2018). Development of Competitive Environment at the Oil Market of Russian Federation: Empirical Analysis. Ekonomika regiona [Economy of Region], 14(2), 547-561. DOI: 10.17059/2018-2-17 google scholar Conti'n, I., Correlje', A., & Palacios, B. (2009). Competition, regulation, and pricing behavior in the Spanish retail gasoline market. Energy Policy, 37(1), 219-228. https://doi.org/10.1016/j. enpol.2008.08.018 google scholar Cournot, A. A. (1838). Recherches sur les Principes Mathématiques de la Théorie des Richesses. Paris, France: L. Hachette. google scholar Corden, W. M., & Neary, J. P. (1982). Booming Sector and De-Industrialization in a Small Open Economy. The Economic Journal, 92(368), 825-848. https://doi.org/10.2307/2232670 google scholar Corden, W. M. (1984). Booming Sector and Dutch Disease Economics: Survey and Consolidation. Oxford Economic Papers, New Series, 36(3), 359-380. https://doi.org/10.1093/oxfordjournals. oe