Institutions and Socioeconomic Change in Two Oil Affected Districts in Ghana

Abstract

While some studies support the growing body of evidence that countries endowed with natural resources are cursed, others are of the view that they have been blessed. One major explanation common to such studies is how institutions determine if resources would be a curse or a blessing. Ghana discovered oil in June, 2007and in November, 2010 produced her first oil in commercial quantities. Through a comprehensive legal framework, Ghana assigned roles to institutions to avoid the oil curse. This approach puts concentration on resource development at a macro level and tends to neglect smaller socioeconomic issues especially in the resource regions. Using a quantitative survey of households in two „oil affected districts‟ and a qualitative interview of institutions in the oil sector activity, this study determines the links between the role of institutions in the oil sector and socioeconomic change in oil affected districts. The study agrees with findings in literature that most institutions in the oil sector activity have roles which are concentrated at the national level. Within the communities of the two districts, fear is low whilst expectations are high about the oil activity. Socioeconomic changes that have occurred in households are strongly linked to predominant economic activities. The study concludes that socioeconomic change and institutions are linked positively but indirectly through perceived institutional contributions. Other household attributes of importance are linked to these perceptions on institutions. It is recommended that the strong determinants of perceptions of institutional contributions such as age, savings, employment status, level of education and socioeconomic change should be considered in formulating effective policies on institutional links which target the development of communities in oil affected districts.