Assessment of Institutional Quality in Resource-Rich Caspian Basin Countries


Aslanli K.

Kurswechsel, vol.2013, no.3, pp.18-41, 2013 (Peer-Reviewed Journal)

  • Publication Type: Article / Article
  • Volume: 2013 Issue: 3
  • Publication Date: 2013
  • Journal Name: Kurswechsel
  • Journal Indexes: Other Indexes
  • Page Numbers: pp.18-41
  • Ankara Yıldırım Beyazıt University Affiliated: Yes

Abstract

Natural resource dependence is believed to have a potential impact on institutional development, and there is a growing consensus in the academic literature that institutional weaknesses central to the explanation of the adverse effects of resource booms. Generally, the quality of institutional framework and natural resource dependence interact mutually. Natural resource rents can damage institutions by removing incentives to conduct reforms and even to establish a well-functioning bureaucracy. Also, weak institutional quality is the ultimate cause of a disadvantageous management framework of natural resources and the process of converting revenue flows into economic development. This article examines the connection between institutional quality and resource dependence in resource-rich Caspian Basin countries (Azerbaijan, Kazakhstan, Russia, Turkmenistan) with transition economies. The analysis for the total natural resources rents suggests that, in aggregate, revenues on total natural resources have a negative impact on government effectiveness.