The Effect of Trust and Corruption on Public Preferences for Cash Transfers from Oil Revenues in Ghana

Abstract

Ghana discovered oil in 2007 and began to produce and export it in commercial quantities in 2011. Following its oil discovery, scholars and experts feared Ghana might fall into the trap of the ‘natural resource curse’, the observed tendency for nations endowed with and heavily dependent upon oil or mineral resources to experience slow economic growth. Accordingly, various policy options to manage the oil revenues in order to avert an oil resource curse have been proposed. This paper uses data from the 2012 Afrobarometer Surveys (Round 5) in Ghana to explore the extent to which institutional trust and perceived corruption influence public preferences for cash transfers from Ghana’s oil revenues. Results from ordered logistic regressions reveal that a unit increase in perceived public corruption increases the odds that a respondent would ask that cash transfers be made to all Ghanaians from the oil revenues by about 1.3%.