Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend

This paper considers the proposal that each country distribute its resource rents directly to citizens as a universal and unconditional cash transfer, or Resource Dividend, and estimates its potential impact on global poverty. Using a global dataset on resource rents and the distribution of income, I find that if every developing country implemented the policy then the number of people living below the World Bank’s $1 a day global poverty line would be halved. A range of further practical benefits are discussed, including the amelioration of the resource curse in resource-rich countries, and the incentive that the policy provides to informal workers to register with the fiscal system. Administrative and political challenges that the policy would face are discussed, and it is argued that in most cases they would not be insuperable.