Rent-seeking and criminal politicians: Evidence from mining booms
File(s)
Published version
Author(s)
Asher, Sam
Novosad, Paul
Type
Journal Article
Abstract
We study how natural resource rents affect the selection and behavior of holders of public office. Using global price shocks to thirty-one minerals and nationwide geological and political data from India, we show that local mineral rent shocks cause the election of politicians charged with serious crimes. We also find a moral hazard effect: politicians commit more crimes and accumulate greater wealth when mineral prices rise during their terms in office. These politicians have direct influence over mining operations but no access to fiscal windfalls from mining; we thus isolate the direct political impacts of mining sector operations.
Vested interests are controlling the whole industry. Imagine, in one night, nearly a thousand vehicles go without proper permit to a port and export the iron ore without proper permit. All this is supervised by the forest department, by the mining department, by the police, by the road transport department […] There is a checkpost everywhere, but nobody stops them. At the port, you have to show the port security valid documents, here too they don't do anything at all. Then there are forest officers inside the port, who are supposed to check whether these minerals are from the forest area, whether they have taken permission from the forest department or not. […] Then there is the customs department which has to collect the customs duty. Nobody does anything.
Justice Nitte Santosh Hegde, Former Supreme Court Judge
Vested interests are controlling the whole industry. Imagine, in one night, nearly a thousand vehicles go without proper permit to a port and export the iron ore without proper permit. All this is supervised by the forest department, by the mining department, by the police, by the road transport department […] There is a checkpost everywhere, but nobody stops them. At the port, you have to show the port security valid documents, here too they don't do anything at all. Then there are forest officers inside the port, who are supposed to check whether these minerals are from the forest area, whether they have taken permission from the forest department or not. […] Then there is the customs department which has to collect the customs duty. Nobody does anything.
Justice Nitte Santosh Hegde, Former Supreme Court Judge
Date Issued
2023-01-01
Date Acceptance
2021-01-28
Citation
Review of Economics and Statistics, 2023, 105 (1), pp.20-39
ISSN
0034-6535
Publisher
Massachusetts Institute of Technology Press
Start Page
20
End Page
39
Journal / Book Title
Review of Economics and Statistics
Volume
105
Issue
1
Copyright Statement
© 2021 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
License URL
Identifier
10.1162/rest_a_01064
Publication Status
Published
Date Publish Online
2023-01-06