Natural Resources and Violent Conflict - WaterWiki.net

who gets the money? 47flows describe the procedures for reporting. Most research in this areafocuses on the macroeconomic and corruption effects that large rentscan have on the developing-country host government and, related tothis, on how revenues are spent. The literature on logging, for example,focuses on the failures of forestry policy that have led to illegal loggingor allowed logging concessions to be underpriced. The literature ondiamonds focuses on the trade in conflict diamonds, which usually arediamonds that have been mined and traded outside host-governmentofficial control.Other sources of information also have limitations. For example,international oil and mining companies presumably are in a betterposition than most to know about the internal reporting procedures ofhost governments. However, discussions with a number of companyrepresentatives shed little light on the issue and left us with the impressionthat companies have little incentive to find out—or admit toknowing about—the internal procedures followed by host governmentsonce companies have made their payments. 1Information obtained via cooperation between developing-countryhost governments and international financial institutions probably hasbeen limited by the fact that large resource revenues usually havegiven countries the ability to avoid cooperation that could impose difficultconditions, for example, examination of their revenue-reportingprocedures.Public expenditures reviews and other economic and sector workcarried out by the World Bank provide overviews of controls in somedeveloping countries. However, such work generally has not beenperformed in resource-rich countries. According to the IMF andWorld Bank websites, within the last five years such reviews wererarely conducted for countries that Global Witness lists as havingresource-related governance problems. Nevertheless, there are notableexceptions, such as the public expenditures review for Kazakhstan,completed in 2000–01; assistance given to Azerbaijan’s Oil Fund; andinvolvement in creating procedures for reporting oil revenue for Chadas part of the Chad-Cameroon Petroleum Development and PipelineProject. 2A handful of other public and private studies and international developmentprojects have provided glimpses into the reporting structuresof a number of other countries, although this has not been an importantfocus of such studies. Such glimpses reveal procedures that often arerudimentary.Most of the systems about which we have significant knowledge arethose that have been imposed relatively recently by the internationalcommunity on governments still in the early or expectant stages of