The effects of oil extraction in Southern Italy: A regional resource curse?

Despite expectations, the development of oil operations has generated no detectable improvement to employment, nor to a range of social indicators, nor to educational attainment in the Southern Italian region of Basilicata. Dr Lorenzo Pellegrini, Dr Luca Tasciotti and Andrea Spartaco consider why.

Basilicata is a region of Southern Italy where the expansion of oil operations in the 1990s was promoted as an opportunity to foster economic development. Flash-forward to 2020, Basilicata is one of the poorest regions in Italy despite the exploitation of some of the largest onshore hydrocarbon reserves within the European Union.

The coincidence of high poverty rates with abundant natural resources suggests that the region is experiencing a ‘resource curse’; however, socio-economic problems predate the oil boom, complicating any causality claim.

The authors' research as to why this should be finds that the development of oil operations has generated no detectable improvement to employment, nor to a range of social indicators, nor to educational attainment.

The absence of quantifiable beneficial effects is coupled with negative impacts on other dimensions of development that are more difficult to estimate with our method – especially on the environment and human health. Taken together the evidence offers a sobering prospect over the potential of resource-based development for disadvantaged regions in developed countries.

Read the article online - 'A regional resource curse? A synthetic-control approach to oil extraction in Basilicata, Italy.'

 

Associate professor
Biography
Associate Professor of Economics of Environment and Development
Associate professor
Dr Luca Tasciotti
Biography
Senior Lecturer in Economics
Researcher
Andrea Spartaco