Municipalities that receive oil windfalls report significant increases in spending on infrastructure, education, health, and transfers to households. However, the windfalls do not trickle down and much of the money goes missing. Indeed, oil revenues increase the size of municipal workers’ houses but not the size of other residents’ houses.That is Francesco Caselli and Guy Michaels, via Chris Blattman.
They also mention more media mention of corruption and federal police operations in municipalities with higher oil outputs. On the latter I am skeptical - I used to live in Rio, and I don't think the favelas and their problems have anything to do with the area's substantial resource income - but nevertheless their overall findings ring true to me.
