Does implementing the Extractive Industries Transparency Initiative (EITI) increase resource revenue in developing countries?

The need for developing countries to increase their domestic revenue has always been relevant, especially after the COVID-19 pandemic, which weakened their public finances. This paper analyses the dynamic treatment effects of the Extractive Industries Transparency Initiative (EITI) implementation on resource revenue mobilization. We use a sample of 83 developing countries from 1995 to 2019, and our empirical strategy relies on the recent dynamic heterogeneity-robust difference-in-differences estimator. Our results show that implementing the EITI increases resource revenue in member countries through improved governance from greater transparency, increased foreign direct investment, and extractive resource exports. These findings are robust to several robustness checks. This study highlights the significant contribution of the EITI implementation in domestic revenue mobilization and the necessity to improve transparency in natural resources management, especially as international demand for critical mineral resources is expected to grow strongly.