ABSTRACT
This chapter presents the evolution of the Extractive Industry Transparency Initiative (EITI). It provides a brief overview of extant research on the benefits of transparency, with special emphasis on studies assessing benefits of the EITI membership. The chapter discusses some measurement issues. It specifies an empirical model and explains the methodology. The chapter also presents the empirical findings. It provides the analysis of two EITI-implementing countries to enhance our understanding of the link between fiscal transparency and its benefits. The chapter aims to examine the impact of the EITI membership on such short-term outcomes as foreign direct investment flows, investment climate, corruption and the cost of sovereign borrowing in resource-rich countries. The EITI is a global initiative that aims to strengthen governance in resource-rich countries by improving transparency and accountability in extractive industries. EITI membership is used as a proxy for revenue transparency in resource-rich countries.
