Natural Resources Endowment And Corruption

There are several different views about research on natural resource endowment and corruption, some researchers believe that the abundant natural resources provide chances for rent seeking, economy and political manipulation, thereby creating and promoting the spread of corruption. However, some scholars believe that when the economic development and the quality of the system is effectively controlled, the resources endowment will not produce corruption significantly. So, in China, will resource endowment will affect institutional quality and lead to corruption? In this paper, we carry out an empirical research on abundance of natural resources and China’s increasing corruption with its dependence on resources by constructing the lag variable model. We use panel data of China’s provinces from 2000 to 2011. The empirical results show that:natural resource abundance has a positive correlation with corruption in control of the economy and institutions variables in the Lag 3 cases, the rate of corruption (the proportion of duty crime among people in 10 thousand persons) will increase by 0.083 when abundance rate of natural resources increases by 1%. Therefore, the abundant natural resources weaken the institutional quality so as to increase the tendency of corruption in china. Besides, for the western ethnic regions of China which are rich in natural resources, is the corruption more serious than other regions of China? The empirical result shows that the discovery rate of corruption in ethnic regions is lower than other regions of China.Some control variables are used in the model, the results shows that the per capita GDP positively correlates with corruption rate; The government scale positively correlates with corruption rate; however, the spending on law enforcement shows a negative correlation with corruption.