The Governor's Solution

The Governor's Solution

How Alaska’s Oil Dividend Could Work in Iraq and Other Oil-Rich Countries

States that substantially increase their income through rents (profits from the exportation of oil and other natural resources) often experience a subsequent increase in government corruption. Simply put, the people in power try to direct more of the money to themselves and prevent others from taking their place.

Seeking to lessen the negative effects of oil rents in Alaska, Governor Jay Hammond had a simple yet revolutionary idea: when citizens have a direct stake, they pay close attention to where the money is going. The embodiment of his idea is the Alaska Permanent Fund Dividend that, since 1982, has been distributing a portion of Alaska’s earnings to each resident.

The Governor’s Solution features a firsthand account by the late governor that describes, with brutal honesty and piercing humor, the birth of the dividend. Thirty years later, Hammond’s vision is still shaping the Center for Global Development’s oil-to-cash initiative to explore how cash transfers might mitigate the corrosive impact of oil rents. Accompanying Hammond’s story is recent work by scholars examining Alaska’s experience and how other oil-rich societies, particularly Iraq, might apply some of the lessons. This book serves as a powerful reminder that the combination of new ideas and determined individuals can make a tremendous difference—even in issues as seemingly complex and intractable as fighting the oil curse.

Contributors include: Todd Moss (Center for Global Development), Jay Hammond (governor of Alaska 1974–1982 and creator of the Alaska Permanent Fund Dividend), Scott Goldsmith (University of Alaska-Anchorage), Nancy Birdsall (Center for Global Development), Arvind Subramanian (Peterson Institute for International Economics and Center for Global Development), and Johnny West (journalist and founder of Open Oil).