Price or politics? An investigation of the causes of expropriation

Expropriations of foreign direct investment in developing countries are typically blamed on political and economic crises in those countries. Developing a new database of expropriations in the minerals sectors of developing country exporters, I show that expropriations were correlated with mineral price booms and that democratic governments were more likely to expropriate. No link is found between expropriations and political or economic crises, except at independence. A better explanation of expropriation would be opportunistic behaviour by host governments when profits of investments are high. In two developed countries, Australia and Canada, expropriations are also found to occur during price booms.


Issue Date:
2006-03
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/116859
Published in:
Australian Journal of Agricultural and Resource Economics, Volume 50, Issue 1
Page range:
85-101
Total Pages:
17




 Record created 2017-04-01, last modified 2017-08-26

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