The oil curse: Brazil and Russia

Some new evidence from Brazil:

Municipalities that receive oil windfalls report significant increases in spending on infrastructure, education, health, and transfers to households. However, the windfalls do not trickle down and much of the money goes missing.

Indeed, oil revenues increase the size of municipal workers’ houses but not the size of other residents’ houses.

Francesco Caselli and Guy Michaels in VoxEU.

Meanwhile, on the other side of the planet, Dan Treisman suggests our fears shouldn’t be exaggerated:

Evidence from around the world suggests that for countries like Russia with an established oil industry, even large increases in the scale of mineral incomes have only a minor effect on the political regime. In addition, Russia—a country with an industrialized economy, a highly educated, urbanized population, and an oil sector that remains majority private-owned—is unlikely to be susceptible to most of the hypothesized pernicious effects of resource dependence.