Natural resources fuel corruption, aid fights it: new study reveals.
Windfall gains like natural resource rents and foreign aid can impact a country's economy directly and indirectly. Studies show that these windfalls can influence institutions like corruption, which in turn affect total output in society. More aid tends to reduce corruption, while natural resource rents are linked to higher corruption levels. The relationship between aid and corruption is straightforward, but the one between natural resources and corruption is more complex.