World Economy and Policy 2024, 2024(2):1

Natural Resource Management: Important Institutional Factors for Value Realization Governance in the Extractive Industry

Monika Smělá, Jiří Sejkora
Prague University of Economics and Business

Countries rich in natural resources have potential to develop their economies thanks to natural resource exploitation. However, solely some of them manage to make use of natural resource wealth and avoid resource curse. The success of natural resource management is dependent on revenue management and settings of value realization in extractive sector. However, these aspects interact with institutional background in a country, for this reason, it is crucial to understand which aspects of institutional background positively impact value realization in countries endowed with natural resources.
The main goal of this paper is to identify which conditions, and their combinations, concerning institutional background, result in high level of value realization in extractive sector. This leads to comprehension of individual conditions, or their combinations, leading to high quality of value realization in extractive sector.
Fuzzy-set qualitative comparative analysis, based on set theory, is used to examine the relations between institutional background and value realization in the extractive sector in countries rich in natural resources. The analysis is based on necessary and sufficient conditions, however, cases are still viewed as complex ones. The input data from Resource Governance Index measuring level of resource governance in individual countries is used for the analysis.
Regarding the analysis outcomes, it can be stated that individual institutional aspects impact value realization in the extractive sector in a diverse way. In terms of licensing, sufficient conditions of voice and accountability is found. It means that voice and accountability itself can produce high level of resource governance in this context. In terms of taxation and local impact consistent pathways to high level of value realization are identified. The importance of voice and accountability is stressed in these configurations. In terms of state-owned enterprises any consistent configuration is significant as its consistency is little bit lower than the set one.

Keywords: natural resource management, natural resources, institutions, extractive industry
JEL classification: H2, H3, Q38

Published: March 21, 2025  Show citation

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Smělá, M., & Sejkora, J. (2024). Natural Resource Management: Important Institutional Factors for Value Realization Governance in the Extractive Industry. World Economy and Policy, 2024(2), 1
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