Using data from 60 resource-abundant countries, we analyze the impact of the Extractive Industry Transparency Initiative (EITI) membership on foreign direct investment, corruption and the cost of sovereign borrowing. Greater fiscal transparency, measure by EITI membership, tends to increase foreign direct investment flows into the country and reduce the incidence of corruption. These results have important policy implications for governments, investors and civil society groups. Natural-resource-rich countries interested in eradicating corruption and attracting more direct investments from foreign countries ought to enhance fiscal transparency and establish policies in line with economic fundamentals.
|Title of host publication||The Economics of Natural Resources in Latin America|
|Subtitle of host publication||Taxation and Regulation of the Extractive Industries|
|Editors||Osmel E. Manzano, Fernando Navajas, Andrew Powell|
|ISBN (Electronic)||9781315111377, 9781351618861|
|Publication status||Published - Nov 2017|