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The need for developing countries to increase their domestic revenue has always been relevant, especially after the Covid-19 pandemic which has weakened their public finances. While natural resource exploitation is expected to generate significant revenues, their inefficient management led to the creation of the Extractive Industries Transparency Initiative (EITI) in 2003, providing a standard for transparent and accountable resource management. This paper analyzes the dynamic treatment effects of implementing the EITI on resource revenue mobilization. Using a sample of 67 developing countries from 1995 to 2020, our empirical strategy relies on the recent heterogeneous and dynamic two-way fixed effects difference-in-differences estimator. This event study approach allows us to addresses the self-selection in the EITI membership and the heterogeneous and dynamic treatment effects over the EITI implementation process, thus providing an overview of the dynamics of pre-treatment and post treatment effects in member countries. The results show that implementing the EITI significantly increases resource revenue mobilization in member countries compared to non-member countries. These results are supported by several robustness checks. Moreover, we find that the EITI increases non-tax revenue more than tax revenue, and has no adverse effects on other types of domestic revenue. Finally, we highlight the improvement of investment climate and the increase in foreign direct investment and resources exports as the main transmission channels. This study highlights the contribution of the EITI to better domestic revenue mobilization for sustainable development financing.
