Sunday, November 04, 2007

Perils of petrocracy

This article from the New York Times Magazine puts a different spin on the effects of oil money on governments and political/social systems.

The local conventional wisdom says that outside some undesirable but manageable social effects, oil money is an unqualified good.

This article makes the counter argument. It says in part:
Oil concentrates a country’s wealth in the state, creating a culture where money is made by soliciting politicians and bureaucrats rather than by making things and selling them. Oil states also ask their citizens for little in taxes, and where citizens pay little in taxes, they demand little in accountability. Those in power distribute oil money to stay in power. Thus oil states tend to be highly corrupt.
Give it a read.

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