Manuel Oechslin awarded the Austin Robinson Memorial Prize

The Austin Robinson Memorial Prize was introduced in 2007 for the best paper published in The Economic Journal by an author who is within five years of completing their PhD. The prize, chosen by the Editors of The Economic Journal and the Royal Economic Society, is given annually and is worth £2,000.

The paper discusses how the lack of sustained growth in poor countries has often been attributed to ‘fiscal weakness’. Empirical evidence suggests that governments often fail to provide crucial public goods. This article argues that this failure may be the result of a political instability effect: more resources fuel power struggles among competing elites – and decrease the incumbent regime's time horizon in office. But with a shorter time horizon, it is less attractive to finance growth-promoting institutions whose returns only accrue in the future. The model further predicts the instability effect to be stronger in countries with little capital or in remote places which render technology adoption expensive.