• HOME
  • NEWS
    • BIOENGINEERING
    • SCIENCE NEWS
  • EXPLORE
    • CAREER
      • Companies
      • Jobs
    • EVENTS
    • iGEM
      • News
      • Team
    • PHOTOS
    • VIDEO
    • WIKI
  • BLOG
  • COMMUNITY
    • FACEBOOK
    • FORUM
    • INSTAGRAM
    • TWITTER
  • CONTACT US
Saturday, April 17, 2021
BIOENGINEER.ORG
No Result
View All Result
  • Login
  • HOME
  • NEWS
    • BIOENGINEERING
    • SCIENCE NEWS
  • EXPLORE
    • CAREER
      • Companies
      • Jobs
        • Lecturer
        • PhD Studentship
        • Postdoc
        • Research Assistant
    • EVENTS
    • iGEM
      • News
      • Team
    • PHOTOS
    • VIDEO
    • WIKI
  • BLOG
  • COMMUNITY
    • FACEBOOK
    • FORUM
    • INSTAGRAM
    • TWITTER
  • CONTACT US
  • HOME
  • NEWS
    • BIOENGINEERING
    • SCIENCE NEWS
  • EXPLORE
    • CAREER
      • Companies
      • Jobs
        • Lecturer
        • PhD Studentship
        • Postdoc
        • Research Assistant
    • EVENTS
    • iGEM
      • News
      • Team
    • PHOTOS
    • VIDEO
    • WIKI
  • BLOG
  • COMMUNITY
    • FACEBOOK
    • FORUM
    • INSTAGRAM
    • TWITTER
  • CONTACT US
No Result
View All Result
Bioengineer.org
No Result
View All Result
Home NEWS Science News Chemistry

Natural resources decrease income inequality in resource-rich countries

Bioengineer by Bioengineer
March 29, 2021
in Chemistry
0
Share on FacebookShare on TwitterShare on LinkedinShare on RedditShare on Telegram

The main conditions are a developed democracy and a transparent market economy

IMAGE

Credit: UrFU / Ilya Safarov.

A group of researchers from Russia, Germany, the Czech Republic, and Switzerland contest the common belief that resource-based economies have higher levels of within-country inequality than resource-scarce economies. The researchers document a direct causal link between natural resources and within-country inequality and conclude that the extraction of oil and gas can reduce inequality or has no significant effect on it. The results were published in the journal Empirical Economics.

“When we compare the natural resource rents to GDP 10 years after the discovery of natural resources vs. 1 year before the discovery, we observe that the resource rents increase by approximately 3 times in Denmark, 13 times in Norway, and 42 times in the Netherlands,” says an associate professor of the department of economics at Ural Federal University and a senior researcher at the Leibniz Institute for East and Southeast European Studies, co-author of the study Olga Popova. “However, we did not observe an increase in income inequality in the studied countries compared to the control ones. Moreover, in Norway, Denmark and the Netherlands, inequality was significantly lower.”

The researchers have examined the causal effect of natural resource discoveries on income inequality using data from 1947 to 2009 and applying the synthetic control method, a method proposed by American and European economists in early 2000s. They focused on the natural discoveries in Denmark, the Netherlands, and Norway in the 1960-1970s and used top 1% and top 10% income shares as the measure of income inequality. The data was compared with the statistics of the same period on the income of the population in the control countries – Finland, Sweden, Germany, Ireland, France, Switzerland. These countries are comparable to Norway, Denmark, and the Netherlands geographically and in terms of ethnic diversity, level of democracy, economic development, education, and health, but are not rich in natural resources.

The researchers believe that by the time the oil and gas were discovered in these countries, political and economic institutions were developed there. This blocked the risks of concentration of control over resources, property, and capital in the hands of the elites, expansion of the state apparatus, and the exacerbation of corruption.

“The maturity of democratic and market institutions hindered the flow of labor to the extractive industries and regions, prevented inflation, degradation of education, and technological lags. Combining these achievements, Norway, Denmark, and the Netherlands have avoided the “resource curse” and, ultimately, an increase in inequality,” the researchers state.

Equal and fair redistribution of resource rents ensured real accountability of the government to voters, and an open and transparent economy. This happened, for example, with the help of national reserve fund and high taxes. This stimulated further economic growth, including in high-tech industries, the development of the social sphere, the creation of new jobs, and a salary growth. Moreover, these developments have occurred soon after the start of production and export of oil and gas resources. The result is the creation of welfare states and, at the same time, a 5-10% reduction in taxes on personal and corporate income by the end of the last decade.

“The key to understanding the causal link between the availability and use of natural resources, on the one hand, and income inequality, on the other, should be sought in the history of the producing countries, in the prevailing political and economic structures and principles,” says Olga Popova.

###

Future work of researchers will be devoted to the analysis of other resource-rich economies, such as Russia, Kazakhstan, and Iran.

Media Contact
Anna Marinovich
[email protected]

Original Source

http://doi.org/10.1007/s00181-021-02023-5

Related Journal Article

http://dx.doi.org/10.1007/s00181-021-02023-5

Tags: Business/EconomicsDeveloping CountriesEnergy SourcesNatureQuality of Life
Share12Tweet7Share2ShareShareShare1

Related Posts

IMAGE

The fate of the planet

April 16, 2021
IMAGE

The future of particle accelerators is here

April 16, 2021

Scientists may detect signs of extraterrestrial life in the next 5 to 10 years

April 16, 2021

On the pulse of pulsars and polar light

April 16, 2021

Leave a Reply Cancel reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

POPULAR NEWS

  • IMAGE

    Jonathan Wall receives $1.79 million to develop new amyloidosis treatment

    60 shares
    Share 24 Tweet 15
  • Terahertz accelerates beyond 5G towards 6G

    852 shares
    Share 341 Tweet 213
  • A sturdier spike protein explains the faster spread of coronavirus variants

    44 shares
    Share 18 Tweet 11
  • UofL, Medtronic to develop epidural stimulation algorithms for spinal cord injury

    56 shares
    Share 22 Tweet 14

About

We bring you the latest biotechnology news from best research centers and universities around the world. Check our website.

Follow us

Tags

University of WashingtonVaccineWeather/StormsVirusVirologyWeaponryVaccinesUrbanizationVehiclesUrogenital SystemZoology/Veterinary ScienceViolence/Criminals

Recent Posts

  • New amphibious centipede species discovered in Okinawa and Taiwan
  • USU researchers develop power converter for long-distance, underwater electric grids
  • The fate of the planet
  • The future of particle accelerators is here
  • Contact Us

© 2019 Bioengineer.org - Biotechnology news by Science Magazine - Scienmag.

No Result
View All Result
  • Homepages
    • Home Page 1
    • Home Page 2
  • News
  • National
  • Business
  • Health
  • Lifestyle
  • Science

© 2019 Bioengineer.org - Biotechnology news by Science Magazine - Scienmag.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In