Citizen funds and Dutch Disease in developing countries

Are Alaska-style citizen revenue distribution funds the solution to the resource curse in developing countries as their proponents conjecture? Unfortunately it appears not. First, it is questionable whether developing countries have the institutional capacity to implement and operate such funds successfully. Second, citizen funds are unlikely to have any substantial impact on governance and their macroeconomic effects are uncertain. Finally, as a comparative case study of the three natural resource-intensive economies that successfully steered clear of excessive real appreciation and crowding out of the non-minerals tradables sector—Botswana, Indonesia and Norway—shows, citizen funds are likely to carry detrimental indirect effects on the ability of governments to surmount the Dutch Disease.     

Transparency,consultation and conflict: Assessing the micro‐level risks surrounding the drive to develop Peru's Amazonian oil and gas resources

Since the 1990s, successive Governments in Peru have sought to expand the exploration and production of the country's oil and gas resources. This economic agenda poses significant opportunities and risks which are usually considered at the macro‐level and framed by debates regarding the so‐called “natural resource curse”. While risks such as “Dutch disease” are important to consider, a worrying set of short‐term issues surrounds the impacts of rapid changes brought on by oil and gas industrial development at the micro‐level, namely, those that affect local communities and the environment. In the case of Peru, this is especially relevant to the vast areas of ecologically sensitive and previously under‐developed Amazonia that are now under concession to oil and gas companies. Low levels of industry transparency combined with a lack of uniform free, prior and informed consent are exacerbating community‐level grievances, and the conflicts to which they can lead. As the oil and gas industry expands in the Peruvian Amazon, the risk of conflict is likely to prove far harder to minimize or ameliorate than are the challenges of managing industry revenues and the risk of currency appreciation most often associated with the natural resource curse.     

Is there a Dutch disease in Botswana?

The Dutch disease is regularly evoked in the resource curse literature and remains a frequent explanation for the poor economic performance found in many resource-rich countries. Given Botswana's high rate of per capita GDP growth, it might seem superfluous at first glance to ask whether or not there is a Dutch disease in Botswana. Yet, Botswana merits study here both as a significant potential exception to any posited inevitability of the Dutch disease and also because the debate on whether or not Botswana has avoided the Dutch disease is far less settled than is indicated by its economic growth record. Botswana currently suffers from many of the symptoms of the Dutch disease but not for the causal reasons posited in the Dutch disease model. Indeed, many of the explanations for the lack of diversification found in Botswana's mineral-dependent economy have nothing to do with either diamond revenues or the Dutch disease. Botswana has done about as well managing its resource wealth as could realistically be expected but it is unlikely to succeed in diversifying its economy away from diamonds anytime soon.     

Natural resources and development: The gold sector in Mali

Resource-rich countries do not necessarily perform well, especially developing countries. A debate has developed since the 1990s about a “resource curse” hypothesis, which threaten to impede the resource-rich countries in taking advantage of their natural endowments. In Mali, a less-developed country, gold export has substantially increased since the 1990s. In this paper we show that widespread analyses, such as those of the Dutch disease and the quality of institutions, are not sufficient to understand what is at stake in Mali, and that the mining sector has proved to be neither a blessing nor a curse, at least until the present. Gold mining has brought budget revenues but induced few spillovers. As gold mining has now come to maturity, the die is probably cast.     

Oil dependency,political institutions,and urban–rural disparities in access to electricity in Africa

In line with the resource curse literature, this paper examines the effect of oil dependency on the disparities in access to electricity between urban and rural areas in Africa, conditional on the quality of political institutions. Based on data from 36 African countries over the period 2000–2017, our investigation suggests that oil rents (% of GDP) increase urban–rural disparities in access to electricity. However, the quality of institutions shapes the effect of oil dependency on these disparities. Specifically, a 10% increase in the institutional quality score reduces the adverse effects of oil rent on electricity access disparity by around 19%, and the negative impact of oil dependency on urban–rural disparities is reversed when institutional quality reaches a score of 52% on a scale from 0 to 100. The robustness tests support these results and call for strengthening the quality of institutions to overcome the resource curse in Africa.     

Are rich countries immune to the resource curse? Evidence from Norway's management of its oil riches

Growth studies show, counter to intuition, that the discovery of a natural resource may be a curse rather than a blessing since resource-rich countries grow slower than others. But it has been suggested that the curse will not afflict rich countries and that, e.g. Norway is an exception to the curse. This article addresses both issues, and introduces a new diagnostic test. Neighbor countries Denmark and Sweden are used to highlight Norway's relative development and to test for curse presence. I employ a structural break technique to demonstrate that Norway started an acceleration in the early 1970s, after having discovered oil in 1969, and did not experience a pronounced retardation for the next 25 years. Instead, after first catching-up with its neighbors, Norway maintained a higher pace of growth. Norway might have escaped the curse. However, data suggest a slow-down at the end of the period, opening the possibility of a late onset of the curse. If so, rich countries are not immune.     

Jordan,minerals extraction and the resource curse

In its role as a competitive producer of phosphate and potash Jordan has not suffered noticeably from the Resource Curse over the past 50 years. However, the effects on its economy because of its geographical proximity to major oil-producing states have been both positive and negative. It is arguable that an oil resource curse has applied to Jordan.     

Is a negative correlation between resource abundance and growth sufficient evidence that there is a “resource curse”?

Evidence from cross-sectional growth regressions suggests that economies dependent on natural resource exports have had slower growth than resource scarce economies. Explanations for this “curse of resources” focus on institutional and market failures caused by resource abundance. With a simple two sector model exhaustible resource model, we demonstrate that the correlation between growth and natural resource abundance can be negative in the absence of market and institutional failures. Since there is no way to distinguish between efficient and inefficient equilibria on the basis of the negative correlation between growth and resource abundance, finding that correlation is not sufficient to conclude resources are a curse, nor is it necessary to find a positive correlation between growth and resources to overturn the resource curse interpretation. We show whether resources are a curse or a blessing for an economy can only be determined by an investigation of the correlation between resource abundance and income levels. Using panel data for U.S. states for the period 1970-2001, we show that resource abundance is negatively correlated with growth rates but positively correlated with income levels.     

Explaining the resource curse, with special reference to mineral-exporting countries

Recent studies have found an inverse correlation between economic growth and natural resource abundance among developing countries. There appears to be no obvious explanation for this finding, such as an important growth variable that is common in resource-poor countries and deficient in resource-abundant countries. The resource curse hypothesis is closely related to the problem of sustainability for resource-exporting countries since periods of high growth are frequently followed by long periods of stagnation. Models are examined showing how increases in export income can affect relative prices in the trade and nontrade sectors and how the changes in relative prices affect investment and growth. It is the thesis of this article that there is nothing inherent in resource-abundance that condemns countries to either low growth or nonsustainability.     

The forgotten resource curse: South Africa's poor experience with mineral extraction

Studies of the resource curse as it affects African states abound, yet few deal specifically with the experiences of South Africa. The inability of countries to convert natural resource wealth into income and improved development measures remains highly pertinent and is especially apparent in Africa's largest economy. This paper takes a unique approach to study the resource curse by comparing South Africa's political economy with the existing resource curse literature. Using data from international organisations, studies of poverty and qualitative evidence this paper examines South Africa's experience with mineral extraction. It is found that South Africa has experienced many of the symptoms outlined in the resource curse literature including relatively slow GDP growth, gross inequalities, entrenched poverty and the creation of a rentier state. Overall, it is concluded that South Africa has failed to benefit from natural resource wealth and can be classified as a resource cursed state. Not only has mineral wealth failed to benefit much of South Africa's population, sections of society have actually been harmed through the process of mineral extraction. This paper is the first to examine South Africa in light of the current resource curse literature and to conclude that the state far more closely resembles its sub-Saharan African neighbours than its upper-middle income peers.     

地方“资源诅咒”与“生态赤字”的经济学分析——以“榆林市”等资源型城市为例

我国陕西省榆林市、甘肃省白银市、辽宁省抚顺市及四川省古蔺县等地区,依托丰富的铜、煤炭、天然气等矿产资源带动了当地经济的快速发展。然而,对资源的过度依赖和开发,使地方经济无可回避地面临"资源诅咒"和"生态赤字"问题。本文在界定"资源诅咒"和"生态赤字"概念,及其产生的经济学根源的基础上,对"榆林市"、"白银市"等典型资源型城市的"生态赤字"现状予以分析,提出基于"3E系统模型"视角下,解决资源型城市"资源诅咒"和"生态赤字"问题,实现地方经济可持续发展的路径选择。     

Resource abundance and financial development: Evidence from China

In this paper, we extend the debate on the resource curse by focusing on a new mechanism. Theoretically, resource abundance may have a negative influence on financial development by impacting trade openness, the demand for financial reforms, social capital accumulation and productive investments. Using provincial panel data of China, the empirical analysis confirms such a negative link between mineral resource abundance and financial development. The resource-rich regions tend to have a slower pace of financial development than resource-poor ones. Since the positive relationship between financial development and long-run growth is also confirmed by the analysis, our findings suggest that financial development constitutes an important mechanism through which resource abundance can impact economic performance.     

Do natural resources and economic components exhibit differential quantile environmental effects?

In view of the resource curse assumption, the environmental aspects of resource utilization are arguably posing more dangers to human existence. In the Middle East and North Africa (MENA) region, the region that holds more than 60% and 50% of the world's oil and gas reserves respectively, the need to examine the contribution of natural resources to environmental quality among other factors cannot be overemphasized. By leveraging on the novelty of observing the differential impact of natural resources and other economic components such as income and primary energy utilizations across the quantiles of carbon emission, this study implements the quantile regression approach alongside other relevant techniques to analyze data between 1990 and 2018 for selected countries in the MENA region including Saudi Arabia, Iran, Kuwait, Qatar, Algeria, Morocco, Oman, Egypt, and the United Arab Emirates (UAE). The result posits that natural resource utilization generally hampers the environment across the quantiles. However, this negative effect decreases until the 50th quantile before starting to rise again toward the upper quantiles. Additionally, primary energy utilization and globalization respectively worsen and improve environmental quantile, especially toward the upper quantiles while income affirms the inverted U-shaped hypothesis across the entire quantiles. Moreover, there is a statistically significant one-way directional causality from natural resources, economic expansion, primary energy use, and globalization to carbon emission levels. Hence, the study offers environmentally friendly resource utilization policies to the MENA economies and other resource-rich states by extension.     

The relationship between mining and socio-economic well being in Australia’s regions

This paper examines the relationship between quality of life indicators and the gross value of minerals production from Australian regions. We used quality of life indicators, aggregated for 71 local government areas containing mining activities, of household income, housing affordability, access to communication services, educational attainment, life expectancy, and unemployment. We find no evidence of systematic negative associations between quality of life and the gross value of minerals production. Instead, mining activity has a positive impact on incomes, housing affordability, communication access, education and employment across regional and remote Australia. Whilst we do not establish causality between mining activity and quality of life, our analysis prompts a rethink of the resource curse as it applies within a single country. We did not find evidence of a resource curse, at the local government level, in Australia’s mining regions. Nevertheless, we note observations by many other researchers of negative social impacts on specific demographic sectors, localities, families of fly-in fly-out mining operations, and individuals. This contrast may be a scale issue, with the regional benefits of mineral wealth masking highly localised inequalities and disadvantage. We suggest that there is a need to better understand these impacts and, more importantly, the types of policy mechanisms government and industry can adopt to mitigate or avoid them.     

A theoretical overview of the relationship between the resource curse and genuine savings as an indicator for “weak” sustainability

This paper shows the strong relation between the factors that lead to the resource curse (RC) and factors that lead to a decline of genuine savings (GS). There is substantial empirical evidence that economies that rely predominantly on their natural resources are also characterized by slower economic growth. This so‐called RC is commonly traced back to the fact that natural resources' generate rents that are independent of a country's economic performance, which can lead to suboptimal reinvestments of this consumed natural capital. We argue that the factors responsible for the RC also have a negative effect on GS, a concept that measures “weak” sustainable development by considering reinvestment of natural capital rents in physical and human capital. We discuss whether the RC hampers possibilities for resource abundant countries to obtain sufficiently high rates of GS, and find indeed many reasons why resource‐dependent countries have problems achieving positive GS rates. We survey both areas of research, emphasizing the influence of the exogenous and endogenous determinants of economic growth, which are usually used to theoretically and empirically explain the RC on the three different forms of capital considered by GS. We specify why most countries suffering from the RC have negative GS rates and explain in detail where the linkages are. This overview could help with potential advancements in the explanation of GS through the inclusion of RC effects.     

OIL EXPLORATION STRATEGIES FOR DEVELOPING COUNTRIES

This paper focuses on the roles of governments of developing countries in the oil exploration area; roles ranging from passive tax collectors to production sharers to full State ownership and control. The historical failure of governments to take full control of this key area is seen as partially due to myths: that only the big international oil companies have the necessary technology and capital and can afford the risk of oil exploration and development. Three case studies showing the large benefits to a developing country from full State control are examined: Mexico, India and Vietnam. It is concluded that only full State control can ensure that the riches of oil can be harnessed for a developing country, and governments are urged to develop greater knowledge both about the international oil industry and their country's potential resources.     

Rapid Assessment of Organic Pollution in a West-central Mexican River Using a Family-level Biotic Index

The cost-effectiveness of rapid assessment approaches make their adaptation for use in developing countries appealing, but biological assessment methods need to be validated before use in new geographic areas. The authors tested the suitability of a family-level biotic index for use in a river in west-central Mexico that receives organic point-source pollution from untreated municipal sewage and sugar-cane processing. The biotic index was highly correlated to dissolved oxygen, and could detect different levels of pollution. Information from rapid assessment biomonitoring was used successfully by local natural resource managers to help bring about improvements in water resource management.     

Mapping Ecosystem Services for Land Use Planning,the Case of Central Kalimantan

Indonesia is subject to rapid land use change. One of the main causes for the conversion of land is the rapid expansion of the oil palm sector. Land use change involves a progressive loss of forest cover, with major impacts on biodiversity and global CO₂ emissions. Ecosystem services have been proposed as a concept that would facilitate the identification of sustainable land management options, however, the scale of land conversion and its spatial diversity pose particular challenges in Indonesia. The objective of this paper is to analyze how ecosystem services can be mapped at the provincial scale, focusing on Central Kalimantan, and to examine how ecosystem services maps can be used for a land use planning. Central Kalimantan is subject to rapid deforestation including the loss of peatland forests and the provincial still lacks a comprehensive land use plan. We examine how seven key ecosystem services can be mapped and modeled at the provincial scale, using a variety of models, and how large scale ecosystem services maps can support the identification of options for sustainable expansion of palm oil production.     

结构红利与资源诅咒——西部大开发以来内蒙古产业结构变迁绩效评价

统计分析表明，西部大开发以来内蒙古经济存在越来越严重的就业-产值结构偏离趋势。采用shilt—share方法分别对西部大开以来内蒙古、西部和全国的劳动生产率进行分解和比较分析发现，内蒙古的结构红利不显著。因此，近年来内蒙古经济虽有良好的增长绩效，但其资源依赖型增长正通过价格机制和制度效率两个途径制约着产业结构的高级化与合理化变迁，即存在潜在的资源诅咒问题。     

Restructuring the arrangements between government and state enterprises in the oil and mining sectors

The article analyses the relationship between governments and state-owned enterprises (SOEs) in the oil and minerals sectors. The case is made that SOEs in these sectors have distinct peculiarities of behaviour, and are beset with specific difficulties in addition to typical problems common to SOEs in all sectors. The reasons for the uniqueness of SOEs in the oil and minerals sector stem mainly from their large size, their capacity to earn and borrow foreign currency, their strategic importance and other factors.
The key to understanding and reforming state oil and mining enterprises lies in recognizing that their sub-optimal behaviour is often caused by conflicts within government regarding control of the SOE's financial flows, including the natural resource rent. These conflicts are frequently aggravated by the inappropriateness of fiscal arrangements between these SOEs and their governments. Guidelines for reforming these arrangements are offered, which, in some respects, differ considerably from those applicable to conventional state-owned enterprises outside the natural resources sector.