The political economy of allocation of natural resource rents and fighting the resource curse: The case of oil rents in Putin's Russia

A fundamental question in studies examining resource-rich countries has focused on the conditions that make them more likely to prevent the various negative consequences of resource abundance. For instance, why have some countries been more successful in securing high economic growth rates and preventing significant fiscal imbalances, while others have repeatedly failed?;This dissertation rests on the assumption that answering such a question requires adopting a comprehensive approach to the concept of rent allocation. For this purpose, it distinguishes between three aspects of rent allocation: the distribution of rents between the state and the natural resource sector, the redistribution of rents by the state, and the redistribution of rents conducted directly by natural resource developers in a manner that bypasses state coffers.;In order to establish a clear causal mechanism determining a country's ability to successfully manage rent allocation, the study borrows from the New Institutionalist School by focusing on the relative power of leading state institutions. It tests its hypotheses through a detailed case study focusing on the management of oil (and partly gas) revenues in Putin's Russia. For the purpose, it examines the institutional setting with regard to each of the three aspects of rent allocation.;First, in the case of the distribution of rents between the state and the oil sector, the study examines how the existing balance across state institutions was instrumental in adopting a major tax reform that allowed the state to markedly improve its tax take from the oil sector. Second, the dissertation explains in detail how the Russian government managed to adopt highly prudent fiscal policies in the form of conservative government spending, successful tax reform for the overall economy, early payment of sovereign debt, and the establishment of a stabilization fund. Finally, it focuses on how the size of rents redistributed by the oil sector expanded during Putin's presidency. The study examines the weakness of property rights in Russia's oil sector, as well as trends pertaining to its transparency. It considers both areas as a major source for an expansion in rent redistribution by the oil sector in the form of overpriced procurement contracts, protection rackets imposed by state officials, compulsory "social responsibility" contributions, and the emergence of new oil traders who collect part of the oil rents.