Is it a curse or blessing to have a resource-rich neighbour? The case of gas extraction in Indonesia
Event details
PhD Seminar (Econ)
Date & time
Venue
Speaker
Contacts
This paper focuses on investigating the causal effects of natural gas extraction on the neighbour economies, particularly at the district level in Indonesia. The study applies a panel difference-in-differences method by comparing non-gas-producing districts in rich-gas provinces as the treatment group and non-gas-producing districts in scarce-gas provinces as the control group in the period before and during gas booms, 2002-2004 and 2005-2015, respectively. This setting exploits the government intervention through resource revenue sharing mechanism in which all districts in gas-producing provinces receive amount of revenues from gas production. The results show that non-gas-producing districts in rich-gas provinces have lower GDP per capita compared to those in poor-gas provinces. This finding provides another evidence that gas windfall is a curse, rather than a blessing for the local economies near gas-extraction sites.
Updated: 27 September 2024/Responsible Officer: Crawford Engagement/Page Contact: CAP Web Team