Resource Rents And Institutional Quality: Exploring Global Corruption's Paradox
Exploring Global Corruption's Paradox
Abstract
This study explores the complex relationship between natural resource rents, institutional quality, and corruption, stemming from the "natural resource curse" paradox. Employing a fixed-effects methodology with data from 175 countries, the research reveals that the interaction between natural resource rents and institutional quality significantly escalates corruption. A noteworthy finding is that while institutional quality is generally presumed to mitigate corruption, in the context of natural resource rents over the past two decades, it has paradoxically exacerbated corrupt practices. This suggests the potential ineffectiveness of institutional policies. These findings challenge the conventional assumption that robust institutions invariably control corruption. Instead, they indicate the suboptimal role of institutional reforms and the presence of more covert forms of corruption within specific natural resource sectors. This research enriches the discourse on the resource curse and underscores the critical importance of strengthening substantive institutional effectiveness beyond mere formal structures.
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Copyright (c) 2026 Billie Dwipayana, Yohanna Magdalena Lydia Gultom
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EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
