Resource booms, revenue sharing, and growth
Abstract
Using a natural experiment in Indonesia, we estimate the separate economic effects of natural resource booms and shared resource revenue. Contrary to Dutch disease concerns, oil and gas booms promote manufacturing growth, and shared revenue does not harm local manufacturing firms. Shared revenue significantly raises local non-oil GDP, but resource booms do not. Supply-side factors help explain the results: shared revenue increases local population and firm entry, while resource booms do not. Oil and gas booms thus benefit local economies largely through shared revenue. Where the revenue is spent matters more for local growth than where the resources are extracted.
Repository Citation
Brehm, Margaret E., Paul A. Brehm, Alecia Cassidy, and Traviss Cassidy. 2026. "Resource booms, revenue sharing, and growth." Journal of Development Economics 182: 103811.
Publisher
Elsevier
Publication Date
6-2026
Publication Title
Journal of Development Economics
Department
Economics
Additional Department
Environmental Studies
Document Type
Article
DOI
https://doi.org/10.1016/j.jdeveco.2026.103811
Keywords
Growth, Resource booms, Decentralization, Manufacturing firms, Indonesia, Dutch disease
Language
English
Format
text
