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The Governor's Solution: How Alaska's Oil Dividend Could Work in Iraq and Other Oil-Rich Countries

Copyright Date: 2012
Pages: 135
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  • Book Info
    The Governor's Solution
    Book Description:

    Reliance on natural resource revenues, particularly oil, is often associated with bad governance, corruption, and poverty. Worried about the effect of oil on Alaska, Governor Jay Hammond had a simple yet revolutionary idea: let citizens have a direct stake.

    The Governor's Solutionfeatures his firsthand account that describes, with brutal honesty and piercing humor, the birth of the Alaska Permanent Fund dividend, which has been paid to each resident every year since 1982.

    Thirty years later, Hammond's vision is still influencing oil policies throughout the world. This reader, part of the Center for Global Development's Oil-to-Cash initiative, includes recent scholarly work examining Alaska's experience and how other oil-rich societies, particularly Iraq, might apply some of the lessons. It is as a powerful reminder that the combination of new ideas and determined individuals can make a tremendous difference-even in issues as seemingly complex and intractable as fighting the oil curse.

    eISBN: 978-1-933286-76-1
    Subjects: Political Science, Law
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Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-viii)
    Nancy Birdsall
  4. 1 What’s Alaska Got to Do with . . . Iraq?
    (pp. 1-4)
    Todd J. Moss

    This book came about because of an email I received out of the blue in September 2011 from Larry Smith, an Alaska-based journalist asking if I might be interested in reading an unfinished manuscript by Jay Hammond, who served as governor of Alaska from 1974 to 1982. Of course, I knew of Hammond, famously nicknamed the Bush Rat Governor, as the political force behind the Alaska Permanent Fund dividend. Through this program, every Alaskan resident receives an annual check, which is a share of profits from the state’s oil-revenue-fed sovereign wealth fund. The 2011 dividend for each resident was $1,174....

  5. 2 Diapering the Devil: How Alaska Helped Staunch Befouling by Mismanaged Oil Wealth: A Lesson for Other Oil Rich Nations
    (pp. 5-54)

    “I call petroleum the devil’s excrement. It brings trouble. . . . Look at thislocura—waste, corruption, consumption, our public services falling apart. And debt, debt we shall have for years.”

    So warned Juan Pablo Pérez Alfonso, a Venezuelan founder of OPEC. A September 24, 2004, article in the British magazineThe Economistelaborates further on Pérez Alfonso:

    During the heady oil boom of the mid-1970s . . . he was seen as an alarmist. . . . In fact, he was astonishingly prescient. Oil producers vastly expanded domestic spending, mostly on goldplated infrastructure projects that set inflation roaring...

  6. 3 The Alaska Permanent Fund Dividend: A Case Study in the Direct Distribution of Resource Rent
    (pp. 55-87)

    Alaska is the largest of the fifty United States measured by land area—but its 700,000 residents make it one of the smallest in population. Because of Alaska’s small population, remote location astride the Arctic Circle, and distance from markets, economic development prospects are limited primarily to exploiting natural resources and federal spending. Most of its economic growth since becoming a state in 1959 has come from petroleum production, which alone accounts for a third of all jobs, directly and indirectly.

    The economic history of Alaska before statehood was one of periodic resource-driven booms—furs, gold, copper, timber, and fish...

  7. 4 Saving Iraq from Its Oil
    (pp. 88-100)

    As the United States, the United Nations, and the Iraqi Governing Council struggle to determine what form Iraq’s next government should take, one question more than any other may prove critical to the country’s future: how to handle its vast oil wealth. Oil riches are far from the blessing they are often assumed to be. In fact, countries often end up poor precisely because they are oil rich. Oil and mineral wealth can be bad for growth and bad for democracy, since they tend to impede the development of institutions and values critical to open, market-based economies and political freedom:...

  8. 5 Iraq’s Last Window: Diffusing the Risks of a Petro-State
    (pp. 101-128)

    Despite many wobbles, Iraq finally seems headed for some kind of normalcy in the years ahead. Political violence and insecurity remain tremendously high when compared to most other countries in the world, but are lower than the high point of 2007–08 and continuing to fall. The political process is riven with crises yet has survived five electoral processes and the best part of a year without an agreed government. Economic development is also in the wind, as oil revenues have crept up first on the back of the global commodities boom and then on Iraq’s ambitious plans to expand...

  9. Contributors
    (pp. 129-130)
  10. Index
    (pp. 131-135)
  11. Back Matter
    (pp. 136-137)