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Oil as a Path to Institutional Change in MENA

  • Mohammed Akacem
  • Dennis Dixon Miller
  • John Leonard Faulkner
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Abstract

National oil wealth can be turned from a curse, into a blessing. This requires inclusive economic and political institutions. We propose a citizen ownership plan that could be the catalyst to nudge the oil MENA region to improve its institutional environment. While the plan is a radical departure from the status quo, it is nevertheless the “shock therapy” needed to awaken the region from decades of lackluster growth. Our plan to divert all the oil revenues directly to the citizens is not new. Others have adopted similar partial plans. Alaska distributes the oil royalties from oil companies to its residents.

In MENA, oil revenue currently goes directly to the autocratic governments and is squandered on wasteful spending, defense, and rewarding cronies and elites. If it were distributed to the citizens, then governments would have to tax them as most countries do. Taxing citizens would make governments more accountable to the citizens. What used to be the national oil company would cease to report to the government and instead would report to a board of directors elected by the citizens. This plan could solve the gasoline subsidy problem since citizens may not want to give up some of their oil revenue to subsidize gasoline. The same approach is recommended to the countries with sovereign wealth funds (SWFs).

Natural resources of a nation should belong to the people or citizens of that nation as established by the subsequent covenants of the United Nations Universal Declaration of Human Rights of 1948.

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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Mohammed Akacem
    • 1
  • Dennis Dixon Miller
    • 2
  • John Leonard Faulkner
    • 3
  1. 1.Department of Economics Campus Box 77Metropolitan State University of DenverDenverUSA
  2. 2.Baldwin Wallace UniversityBereaUSA
  3. 3.ArlingtonUSA

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