The Populism and Natural Resources Project brings together a broad range of international and Harvard-based researchers to examine the problems that countries face in setting up a credible and stable regime for the exploitation of natural resources.
One of the most serious problems in expanding the supply of non-renewal resources in the developing world are the recurrent contract renegotiations to which the sector is usually subject during boom-bust cycles. Economists have developed substantial tools that have helped us understand how to set up optimal contracts, design auctions, hedge risks, provide insurance, and even how to address concerns on fairness, thus addressing the very issues that have hindered successful long term contracts. In addition, economic history can also provide important clues for bettering the institutional scheme that is required to deal with the boom-bust cycle. The project provides a unique opportunity to span the bridge between recent analytical developments and practical implications. The project's first product will be a major volume to be published in 2010 that applies contract theory to natural resource issues and offers case studies of the oil industry in Bolivia, Argentina, and Venezuela.
Research Director: William Hogan