Abstract
Tanzania has discovered large reservoirs of off shore natural gas, and might become a large exporter of liquefied natural gas (LNG) during the next decades. With this comes the promise of significant petro-revenues to the Tanzanian government, and prospects of improved economic and social conditions for the country's population. However, the empirical literature suggests that natural resource wealth constitutes a considerable challenge. Natural resource wealth is associated with lower economic growth (Sachs and Warner 1995, Sachs and Warner 1999, Mehlum et al. 2006); prolonged authoritarian regimes (Aslaksen 2010, Ross 2001, 2009, Tsui 2011, Andersen and Aslaksen 2013); corruption (Vicente 2010, Leite and Weidmann 2002, Treismann 2007, Busse and Gröning 2013); and violent conflict (Collier and Hoeffler 2004).
While there seems to be a consensus that such a thing as a "resource curse" exists, there is large heterogeneity in the economic, social and political outcomes of natural resource wealth. Researchers have proposed different channels that can explain these diverging experiences. The present study will draw on the political economy literature that focuses on the quality of institutions, governance and democracy (Ross 2015, Busse and Gröning 2013). This research project aims to contribute to the scarce body of micro-level empirical investigations of the resource curse by investigating the effect of natural resource rents the political attitudes and behavior of citizens. In addition to look at citizens willingness to pay tax and engage in corrupt activities, we will also examine people's trust in the government. While trust has been shown to be an important determinant of economic growth, we have not found any studies investigating the effect of natural resource rents on the level of trust in a society.
The research questions we seek to answer are the following: How do expectations about resource revenues in a country affect
- people's willingness to pay taxes?
- people's willingness to engage in corrupt/rent-seeking activities?
- people's trust in the government?
To answer these questions, we will conduct a survey experiment that will also include incentivised games. In the experiment, respondents will first answer some key background questions. They are then randomly assigned to a control or one of four treatment groups. In all treatments, we will provide information about the estimated total value of the gas revenues, but how the totals are illustrated will be varied. We use a 2x2 design to study if the results are sensitive to whether the revenues are illustrated (a) in per capita or population terms and (b) in totals or in terms of the interest that can be generated in infinity if the money is saved.
The information manipulation is important both from a policy perspective, since it may inform policy-makers about the impact of how different informational responses may affect the public, but also because it may shed light on how the different informational approaches affect the mindset of people.
The purpose of the treatments is to generate exogenous variation in expectations about gas revenues, by increasing the salience of existing expectations among those who already know about them, and by creating expectations among those who do not know about gas revenues.
After receiving the treatment or control group information, respondents answer a series of questions intended to capture willingness to pay taxes, willingness to engage in corruption and trust in the government. The treatment manipulations allow us to study the causal effect of increased expectations about gas revenues on willingness to pay tax and to engage in corrupt activities, as well as trust in the government by simply reminding the participants in the treatment conditions about the fact that Tanzania has discovered large reservoirs of natural gas.
In the last part of the experiment, respondents an incentivised game. We have developed two games. The first game intends to measure trust in other citizens in economic decisions. The second game intends to measure cheating behavior (proxy for willingness to engage in corrupt activities). The incentivised games provide us with behavioral measures of how information about gas revenues, and the way in which it is presented, affects trust and cheating behavior in society.