Does transparency in resource revenue management work?

Does transparency in resource revenue management work: Evidence from a field experiment in Ghana by Christa Brunnschweiler, from UEA's School of Economics. 

The Theory

Revenues from high-value natural resources such as petroleum are an important part of many developing countries’ economies. Despite abundant natural resources, however, these countries are often characterised by the ‘resource curse’: slow economic growth, weak political institutions, and even violent conflict. The resource curse has been blamed at least in part on resource revenue mismanagement. The international community has therefore attempted to improve natural resource governance by promoting transparency and commonly making it a prerequisite for obtaining investment, debt relief, loans, and aid. 

The transparency theory proposes that once citizens gain information about the management of valuable natural resources and their revenues, they will use this information to form or amend their views; to debate resource governance related issues; and, if needed, as a basis for voicing concerns and requesting improved accountability in resource governance. From better governance, the expectation is that there would be an increase in the revenues available for public spending to promote economic and social development. 

The Project

Together with two colleagues from other European universities – Paivi Lujala from NTNU (Norway) and the University of Oulu (Finland), and Maarten Voors from Wageningen University (Netherlands) – I collaborated with the Kumasi Institute of Technology, Energy and Environment (KITE), a Ghanaian NGO, to evaluate the effectiveness of Ghana’s transparency efforts in the management oil and gas revenues. The project was led by KITE and two other Ghanaian NGOs, ensuring local relevance. We worked closely with the Public Interest and Accountability Committee (PIAC), the quasi-governmental revenue management monitoring body, to design two interventions for a field experiment with over 3500 participants.  

First, PIAC members travelled across the country to explain how resource revenues are being managed and collect the audience’s comments in town-hall meetings. Second, eight voice and SMS messages were sent to participants, with an interactive element that allowed recipients to give immediate feedback (the ICT treatment). A third group of participants was “treated” with both interventions. We measured information retention, attitude and behavioural changes among the treated population, and compared these with a control group via the use of baseline and end line survey data.  

The Outcome

Did our interventions have any effect? The good news is that the general level of knowledge increased among the treated population, as did the satisfaction with how resource revenues are currently handled. The ICT treatment led to very positive effects on participants’ willingness to demand more information and accountability, whereas the influence of the town-hall meetings was weaker. We are still gathering some data to complete the project, but it has already had an impact in Ghana. PIAC has implemented many of our recommendations, for example by carrying on their meetings in smaller towns around the country. They are also thinking of setting up a long-term ICT platform. Finally, we have gotten policymakers, journalists and civil society interested in our results through public dissemination events, the latest organised with the support of UEA.