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Natural resources and sovereign expropriation

Baldursson, Fridrik Mar ; von der Fehr, Nils-Henrik M.

Journal of environmental economics and management, 2018-11, Vol.92, p.580-607 [Periódico revisado por pares]

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Título:
Natural resources and sovereign expropriation
Autor: Baldursson, Fridrik Mar ; von der Fehr, Nils-Henrik M.
Assuntos: Natural resources ; Optimal contract length ; Sovereign expropriation
É parte de: Journal of environmental economics and management, 2018-11, Vol.92, p.580-607
Notas: NFR/209698
Descrição: A government wants to exploit a renewable resource, yielding a time-varying flow of rent, by leasing it. Leasing contracts can be expropriated before expiration, albeit at a cost. To minimise transactions costs and avoid the ‘resource trap’ the government would prefer to enter into an infinitely long contract (i.e. sell the resource), if it could commit not to expropriate. However, with finite costs of expropriation credible commitment is impossible: the government either enters into finite contracts, expropriates with positive probability or does both. The value of the resource to the government is increasing in the cost of expropriation, but decreasing in the variability of the resource rent.
Editor: Elsevier Inc
Idioma: Inglês;Norueguês

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