This project aims to enhance knowledge of the ways in which political and institutional regimes affect the extent, nature and distribution of development opportunities catalysed by the growth of extractive industries (EIs). This will be achieved through a comparison of Peru and Bolivia, and of the different taxation and redistributive regimes for hard rock mining and hydrocarbons in the two countries.
The first part of the research will trace the ways in which distinct taxation and revenue distribution regimes have emerged for these two sectors in each of the countries – this analysis will allow us to address the hypothesis that the dominant regimes for a particular extractive commodity are influenced by the institutional and political context in which the regimes initially emerged and that, once codified, these tax and redistribution regimes become difficult to change.
The second part of the research will focus on the contemporary period and compare the relationships between EI taxation, expenditure and the distribution of development opportunities under the market friendly regime of Peru and the post-neoliberal regime of Bolivia. In each country, the project will assess the following measures of development opportunity related to extractive industry: the allocation of extractive rents between private capital and government; the geographical distribution of negative development impacts, especially in the form of environmental externalities; the geographical distribution of the rents that accrue to government; and the ways in which these rents are spent.
The practical question faced by the project is ‘under what conditions might sub-national governments spend EI revenue in a more effective, development-oriented fashion? By ‘development-oriented’, we understand a type of expenditure that is planned over the long term; designed in collaboration with the population; implemented in coordination with different levels of government; and clearly aimed at the improvement of welfare levels and economic diversification.