Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129465
Authors: 
Kolstad, Ivar
Kinyondo, Abel
Year of Publication: 
2015
Series/Report no.: 
WIDER Working Paper 2015/106
Abstract: 
This paper suggests that an optimal local content policy in the context of flawed institutions is a more minimal one than those typically pursued by developing countries with recently discovered petroleum reserves. We argue that local content requirements need to be seen as a public expenditure question: such requirements increase multinationals' costs and hence reduce the taxes that can be extracted from these companies. There are thus opportunity costs in imposing local content requirements, since the forgone taxes could be used in other ways to improve development prospects. Such requirements can also exacerbate key problems of patronage and rent-seeking.
Subjects: 
local content
natural gas
oil
petroleum
Tanzania
JEL: 
D72
D73
O14
Q32
ISBN: 
978-92-9230-995-4
Document Type: 
Working Paper

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