The Broad Impact of a Narrow Conflict: How natural resource windfalls shape policy and politics
Regression discontuity with local randomization assumption.
Sung Eun Kim and Johannes Urpelainen
How do natural resource windfalls change the way policy is made?
Access to natural resources creates a political conflict between the expected economic winners and their environmental opponents, but the effects of such conflict on policy and politics remain unclear. To examine the scope of such effects, we exploit the rapid and unanticipated technological breakthroughs in the `fracking' of shale gas. During the past decade, shale gas production around the Marcellus shale formation in the Northeastern United States expanded rapidly. Using a quasi-experimental design, we examine how access to shale gas in electoral districts changed the voting record of House Representatives on environmental policy relative to neighboring districts without access. Votes become 15-20 percentage points less likely to be in favor of the environment. The best explanation for this effect is the strong electoral performance of (anti-environmental) Republicans in shale-affected districts. The narrow conflict has a broad impact: access to natural resources puts downward pressure on environmental policy across the board.