Placing constraints on elected officials is thought to bind their hands and render government policies credible. In … places with high rule of law, constraining government attracts FDI. In contrast, high constraints push investment away in … contexts where the rule of law is lower. The logic is that constraining government makes credible high-income governments …

resource-rich countries, the decision of host governments to expropriate these investments, and the level of corruption. Higher … production. Moreover, resource production leads to high levels of corruption. Our theoretical results are confirmed by … estimations of a simultaneous equation model for 50 resource-rich countries in which we endogenize expropriation risk, corruption …

corruption-friendly setting caused by a weak institutional framework. We argue that corrupt elites exploit this given … corruption. …