Download or read book Natural Resource Booms in the Modern Era written by Mr.Andrew M. Warner and published by International Monetary Fund. This book was released on 2015-11-12 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global boom in hydrocarbon, metal and mineral prices since the year 2000 created huge economic rents - rents which, once invested, were widely expected to promote productivity growth in other parts of the booming economies, creating a lasting legacy of the boom years. This paper asks whether this has happened. To properly address this question the empirical strategy must look behind the veil of the booming sector because that, by definition, will boom in a boom. So the paper considers new data on GDP per person outside of the resource sector. Despite having vast sums to invest, GDP growth per-capita outside of the booming sectors appears on average to have been no faster during the boom years than before. The paper finds no country in which (non-resource) growth per-person has been statisticallysignificantly higher during the boom years. In some Gulf states, oil rents have financed a migration-facilitated economic expansion with small or negative productivity gains. Overall, there is little evidence the booms have left behind the anticipated productivity transformation in the domestic economies. It appears that current policies are, overall, prooving insufficient to spur lasting development outside resource intensive sectors.
Download or read book Natural Resource Booms in the Modern Era written by Andrew Warner and published by . This book was released on 2015 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in the Political Economy of Natural Resource Booms written by Stanislao Humberto Maldonado Zambrano and published by . This book was released on 2015 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt: I study the political effects of resource booms on the behavior of politicians, citizens and government and discuss why the existing literature provide unsatisfactory answers to understand the complex nature of resource booms. In the first chapter, I explore how resource booms affect the incentives of politicians and how this is related to the contested issue of the impact of natural resources on living standards. Then, in the second chapter, I analyze how resource booms can affect the citizens' beliefs about the performance of democracy and its implications in terms of quality of the democratic regime. Finally, in the third chapter, I study how resource booms affect the performance of local government in terms of delivering public goods in an efficient manner. Together, these chapters offer a complete understanding of some of the most relevant issues highlighted by the theoretical and empirical literatures of the so-called resource curse. Are resource booms beneficial or detrimental for citizens? What is the role of politicians' incentives in this regard? In the first chapter "The Political Effects of Resource Booms: Political Outcomes, Clientelism and Public Goods Provision in Peru" I exploit variation in natural resource rents and mineral production among Peruvian municipalities to analyze the impact of resource booms on local politicians' behavior and citizens' well-being. Although this topic has recently attracted the attention of several scholars, the existing empirical evidence remains inconclusive regarding whether resource booms are beneficial or detrimental to citizens via their effects on public good provision and welfare outcomes. I argue that, despite the fact that many of the existing theoretical models allow for the possibility of non-monotonic responses, the empirical literature has mostly approached this phenomena using linear models, failing to correctly understand the nature of resource booms. Exploiting the recent extraordinary increase in mineral prices along with a set of rules for the distribution of natural resource rents in Peru, I show that the effects of resource booms in reelection outcomes, political competition, and public goods provision are function of the size of the rents in a non-monotonic fashion. For municipalities that experienced a modest increase in rents, the evidence suggests that the boom is associated with increases in public good provision and living standards, whereas the opposite occurs for the case of extremely rich municipalities in terms of mining rents. These results are robust to endogenous production responses and are consistent with a simple model of electoral competition in a resource rich economy. In the second chapter "Resource Booms and Political Support: Evidence from Peru", I use the same identification strategy as in Chapter 1 in order to study how resource booms can affect the performance of democracy in resource-rich areas. I motivate this chapter by noticing that resource abundance has been usually associated with poor democratic performance. Particularly, some scholars suggest that in resource-rich countries democracy faces constraints to consolidate and survive. Interestingly, current theoretical explanations emphasize the role of politicians and elites in this regard implicitly assuming that citizens are always pro-democracy. However, historical and empirical evidence suggest that, in countries where democracy is new or unconsolidated, citizens are critical about its performance and willing to replace it with an authoritarian regime if they perceive this regime is better for delivering the policy outcomes they care about. In this chapter, I study this issue exploiting sub-national exogenous variation across mineral-rich local governments in Peru related to the allocation of mineral resource rents during a recent boom in mineral prices. Using a difference in difference approach, I estimate a non-monotonic effect of natural resource rents on the perception about the effectiveness of democracy. For modest increases in rents a positive impact on citizens' support for democracy is observed whereas the opposite occurs in districts that experienced large transfers. These results are consistent with a model on citizen's learning about the effectiveness of democracy during a resource boom. Finally, in the third chapter "Natural Resource Windfalls and Efficiency of Local Government Expenditures: Evidence from Peru" I analyze the role of natural resource windfalls in explaining the efficiency of public expenditures. Using a rich dataset of expenditures and public good provision for 1,836 municipalities in Peru for period 2001-2010, I estimate a non-monotonic relationship between the efficiency of public good provision and the level of natural resource transfers. Local governments that were extremely favored by the boom of mineral prices were more efficient in using fiscal windfalls whereas those benefited with modest transfers were more inefficient. These results can be explained by the increase in political competition associated with the boom, as it was found in Chapter 1. However, the fact that increases in efficiency were related to reductions in public good provision casts doubts about the beneficial effects of political competition in promoting efficiency. These chapters provide different and more complex views than the existing literature. They emphasize the existence of non-monotonic patterns in the relationship between resource booms and political and economic outcomes that were not previously addressed empirically exploiting subnational variation to uncover causality. This approach allows us to understand the previously inconsistent findings in the literature with respect to the lack of impacts on living standards despite the large increase in rents experienced by resource-rich areas.
Download or read book Resources in America s Future written by Resources for the Future and published by [Baltimore] : Published for Resources for the Future by the Johns Hopkins Press. This book was released on 1963 with total page 1184 pages. Available in PDF, EPUB and Kindle. Book excerpt: A detailed examination of the adequacy of natural resources in the U.S. to provide the standard of living expected.
Download or read book Rents to Riches written by Naazneen Barma and published by World Bank Publications. This book was released on 2011-12-08 with total page 303 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume focuses on the political economy surrounding the detailed decisions that governments make at each step of the value chain for natural resource management. From the perspective of public interest or good governance, many resource-dependent developing countries pursue apparently short-sighted and sub-optimal policies in relation to the extraction and capture of resource rents, and to spending and savings from their resource endowments. This work contextualizes these micro-level choices and outcomes.
Download or read book Natural Resource Booms and Inequality written by Benedikt Goderis and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a theory, in the context of a two-sector growth model in which learning-by-doing drives growth, to explain the time path of income inequality following natural resource booms in resource-rich countries. Under the condition of a relatively unskilled labor intensive non-traded sector, inequality falls immediately after a boom, and then increases steadily over time until the initial impact of the boom disappears. Using data for 90 countries between 1965 and 1999, we find evidence in support of the theory, especially for oil and mineral booms. We also find that uncertainty about future commodity prices increases long-run inequality.
Download or read book From Natural Resource Boom to Sustainable Economic Growth written by Pranav Gupta and published by International Monetary Fund. This book was released on 2015-04-30 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Some resource-rich developing countries are in the process of harnessing immense mining resources towards inclusive growth and prosperity. Nevertheless, tapping into natural resources could be challenging given the large front-loaded investment, volatile capital flows and exposure to global commodity markets. Public investment is needed to remove the often-large infrastructure gap and unlock the economic potential. However, too rapid fiscal outlays could push the economy to its limit of absorptive capacity and increase macro-financial vulnerabilities. This paper utilizes a structural model-based approach to analyze macroeconomic impacts of different public investment strategies on key fiscal and non-fiscal variables such as debt, consumption, sovereign wealth fund, and real exchange rates. We apply the model to Mongolia and draw policy recommendations from the analysis. We find that fiscal policy adjustment, particularly moderating infrastructure investment and optimizing investment efficiency is needed to maintain macroeconomic and external stability, as well as to boost the long-term sustainable growth for Mongolia.
Download or read book The Resource Curse written by Syed Mansoob Murshed and published by Agenda Publishing. This book was released on 2018 with total page 172 pages. Available in PDF, EPUB and Kindle. Book excerpt: The "resource curse," or "paradox of plenty," refers to the long-established notion central in development economics that countries rich in natural resources, particularly minerals and fuels, perform less well economically than countries with fewer natural resources. In other words, resources are an economic curse rather than a blessing. This short primer explores the complexities of this idea and the debates that surround it, in particular under what conditions the resource curse might operate, if not universal. Discussion ranges over the nature of resource booms, the benefits and costs of export-led growth, the problems of deindustrialization and manufacturing base erosion, rent-seeking behavior and corruption, and the empirical evidence of the effects of natural resource dependence on growth. The treatment is nontechnical and accessible, drawing throughout on a range of illustrative examples from across the developed and developing world. The Resource Curse offers an authoritative introduction to one of the most perplexing issues of economic growth.
Download or read book Local Impacts of Natural Resource Booms and Busts written by Gerhard Toews and published by . This book was released on 2014 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Addressing the Natural Resource Curse written by Mr.Arvind Subramanian and published by International Monetary Fund. This book was released on 2003-07-01 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: Some natural resources-oil and minerals in particular-exert a negative and nonlinear impact on growth via their deleterious impact on institutional quality. We show this result to be very robust. The Nigerian experience provides telling confirmation of this aspect of natural resources. Waste and poor institutional quality stemming from oil appear to have been primarily responsible for Nigeria's poor long-run economic performance. We propose a solution for addressing this resource curse which involves directly distributing the oil revenues to the public. Even with all the difficulties that will no doubt plague its actual implementation, our proposal will, at the least, be vastly superior to the status quo. At best, however, it could fundamentally improve the quality of public institutions and, as a result, durably raise long-run growth performance.
Download or read book The Institutions Curse written by Victor Menaldo and published by Cambridge University Press. This book was released on 2016-08-25 with total page 417 pages. Available in PDF, EPUB and Kindle. Book excerpt: Debunks the view that natural resources lead to terrible outcomes by demonstrating that oil and minerals are actually a blessing.
Download or read book Resource Abundance and Economic Development written by R. M. Auty and published by Oxford University Press. This book was released on 2001-06-28 with total page 357 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the 1960s the per capita incomes of the resource-poor countries have grown significantly faster than those of the resource-abundant countries. In fact, in recent years economic growth has been inversely proportional to the share of natural resource rents in GDP, so that the small mineral-driven economies have performed least well and the oil-driven economies worst of all. Yet the mineral-driven resource-rich economies have high growth potential because the mineral exportsboost their capacity to invest and to import."Resource Abundance and Economic Development" explains the disappointing performance of resource-abundant countries by extending the growth accounting framework to include natural and social capital. The resulting synthesis identifies two contrasting development trajectories: the competitive industrialization of the resource-poor countries and the staple trap of many resource-abundant countries. The resource-poor countries are less prone to policy failure than the resource-abundant countriesbecause social pressures force the political state to align its interests with the majority poor and follow relatively prudent policies. Resource-abundant countries are more likely to engender political states in which vested interests vie to capture resource surpluses (rents) at the expense of policycoherence. A longer dependence on primary product exports also delays industrialization, heightens income inequality, and retards skill accumulation. Fears of 'Dutch disease' encourage efforts to force industrialization through trade policy to protect infant industry. The resulting slow-maturing manufacturing sector demands transfers from the primary sector that outstrip the natural resource rents and sap the competitiveness of the economy.The chapters in this collection draw upon historical analysis and models to show that a growth collapse is not the inevitable outcome of resource abundance and that policy counts. Malaysia, a rare example of successful resource-abundant development, is contrasted with Ghana, Bolivia, Saudi Arabia, Mexico, and Argentina, which all experienced a growth collapse. The book also explores policies for reviving collapsed economies with reference to Costa Rica, South Africa, Russia and Central Asia. Itdemonstrates the importance of initial conditions to successful economic reform.
Download or read book Natural Resources in Latin America and the Caribbean written by Emily Sinnott and published by World Bank Publications. This book was released on 2010-01-01 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The question of how to treat commodity production and how to manage recurrent cycles of booms and busts has always been a challenge for policymakers in commodity-dependent countries, including many in the LAC region. These challenges have led to allegations of a "commodity curse'' that retards development in these countries, but as of yet, there is no consensus as to whether such a curse exists, and if so, how can negative effects be minimized. This book contributes to this debate. Much of the report is focused on an examination of specific channels through which commodity dependence may affect the economic and institutional development of countries. This includes broadly 4 sets of concerns: one set dealing with the direct economic effects of commodity dependence and the implications for long-term growth; one dealing with the interactions between commodity production and the rents it generates on the one hand, and a country's institutions on the other; a third dealing with the macroeconomic challenges of managing the volatility of revenue flows, including the distributional implications at the household level posed by cyclicality of social spending; and a final set associated with potential negative environmental and social impacts. The book finds that some commonly accepted negative effects of dependence on natural resources are largely myths, while some are realities. But all can be managed, and the book draws on the best available information in existing literature as well as original analysis to provide practical advice on how to do so. It also presents descriptive facts and analysis of the impacts in LAC of the recent commodity boom, helping the reader understand the implications for the region's development and policies. It should be of great interest to policy-makers and analysts, as well as laypersons interested in the economics of commodity markets and their role in economic development."
Download or read book Natural Resources Neither Curse nor Destiny written by Daniel Lederman and published by World Bank Publications. This book was released on 2006-10-23 with total page 396 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'Natural Resources: Neither Course nor Destiny' brings together a variety of analytical perspectives, ranging from econometric analyses of economic growth to historical studies of successful development experiences in countries with abundant natural resources. The evidence suggests that natural resources are neither a curse nor destiny. Natural resources can actually spur economic development when combined with the accumulation of knowledge for economic innovation. Furthermore, natural resource abundance need not be the only determinant of the structure of trade in developing countries. In fact, the accumulation of knowledge, infrastructure, and the quality of governance all seem to determine not only what countries produce and export, but also how firms and workers produce any good.
Download or read book Commodity Price Volatility and the Sources of Growth written by International Monetary Fund and published by International Monetary Fund. This book was released on 2012-01-01 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the impact of the level and volatility of the commodity terms of trade on economic growth, as well as on the three main growth channels: total factor productivity, physical capital accumulation, and human capital acquisition. We use the standard system GMM approach as well as a cross-sectionally augmented version of the pooled mean group (CPMG) methodology of Pesaran et al. (1999) for estimation. The latter takes account of cross-country heterogeneity and cross-sectional dependence, while the former controls for biases associated with simultaneity and unobserved country-specific effects. Using both annual data for 1970-2007 and five-year non-overlapping observations, we find that while commodity terms of trade growth enhances real output per capita, volatility exerts a negative impact on economic growth operating mainly through lower accumulation of physical capital. Our results indicate that the negative growth effects of commodity terms of trade volatility offset the positive impact of commodity booms; and export diversification of primary commodity abundant countries contribute to faster growth. Therefore, we argue that volatility, rather than abundance per se, drives the "resource curse" paradox.
Download or read book Employment Impacts of Upstream Oil and Gas Investment in the United States written by Mark Agerton and published by International Monetary Fund. This book was released on 2015-02-11 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Technological progress in the exploration and production of oil and gas during the 2000s has led to a boom in upstream investment and has increased the domestic supply of fossil fuels. It is unknown, however, how many jobs this boom has created. We use time-series methods at the national level and dynamic panel methods at the state-level to understand how the increase in exploration and production activity has impacted employment. We find robust statistical support for the hypothesis that changes in drilling for oil and gas as captured by rig-counts do in fact, have an economically meaningful and positive impact on employment. The strongest impact is contemporaneous, though months later in the year also experience statistically and economically meaningful growth. Once dynamic effects are accounted for, we estimate that an additional rig-count results in the creation of 37 jobs immediately and 224 jobs in the long run, though our robustness checks suggest that these multipliers could be bigger.
Download or read book Commodity Price Volatility and Inclusive Growth in Low Income Countries written by Mr.Rabah Arezki and published by International Monetary Fund. This book was released on 2012-10-24 with total page 408 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the years following the global financial crisis, many low-income countries experienced rapid recovery and strong economic growth. However, many are now facing enormous difficulties because of rapidly rising food and fuel prices, with the threat of millions of people being pushed into poverty around the globe. The risk of continued food price volatility is a systemic challenge, and a failure in one country has been shown to have a profound impact on entire regions. This volume addresses the challenges of commodity price volatility for low-income countries and explores some macroeconomic policy options for responding to commodity price shocks. The book then looks at inclusive growth policies to address inequality in commodity-exporting countries, particularly natural resource rich countries. Perspectives from the Middle East and North Africa, sub-Saharan Africa, emerging Asia, and Mexico are presented and, finally, the role of the international donor community is examined. This volume is a must read for policymakers everywhere, from those in advanced, donor countries to those in countries with the poorest and most vulnerable populations.