Ivar Kolstad

Associated Research Professor

Corruption tends to be prevalent in developing countries that are richly endowed with natural resources. This project provides a brief guide for donors on the links between natural resources and corruption, and suggests ways in which donors can address the problem. Two sets of recommendations are made. Firstly, natural resource endowments may cause corruption. To mitigate this effect donor should take a holistic view of corruption, avoid fuelling rent-seeking activities, and look for commitment to reform in resource rich partner countries. Secondly, corruption in the natural resource management (NRM) system reduces the development impact of resources. Donors should address corruption in the NRM system by promoting good concessions and negotiations practices, transparent and accountable revenue management, and by helping curtail petty corruption in monitoring and enforcement.