Resource Abundance and Economic Development

By R. M. Auty | Go to book overview

1 Introduction and Overview

RICHARD M. AUTY


1.1 THE UNDERPERFORMANCE OF THE RESOURCE-ABUNDANT ECONOMIES

In recent decades the resource-abundant developing countries have underperformed when compared with the resource-deficient developing countries (Ranis 1991 ; Lal and Myint 1996 ; Sachs and Warner 1995 shows that between 1960 and 1990 the per capita incomes of the resource-poor countries grew at rates two to three times faster than those of the resource-abundant countries and that the gap in the growth rates widened significantly since the 1970s. Although there is reason to expect that crop-led growth in resource-abundant countries is inherently slower than the manufacturing-led growth of resource-deficient countries (Mellor 1995), the difference in the growth rates is greater than would be expected. Moreover, the mineral-driven resource-abundant countries have been among the weakest performers. Yet the mineral economies have the potential for rapid growth because most of them also have ample cropland (Table 1.1 , column 3) so that mineral exports further enhance their capacity both to invest and to import compared with the non-mineral economies.

The disappointing performance of the resource-abundant countries appears to be robust with regard to differences in the classification of the natural resource endowment. This is just as well because there is as yet no consensus on the measurement of resource abundance. Some studies have used single indicators, such as dependence on primary product exports (Sachs and Warner 1995), per capita land area (Wood and Berge 1997) and labour force in the primary sector (Gylfason et al. 1999); whereas others have used dual indices such as export orientation, and population size (Syrquin and Chenery 1989). Gylfason, Wood and Berge, and Sachs and Warner all conclude that there is little evidence that the basic findings are sensitive to the classification system used. Table 1.1 uses two criteria to measure the resource endowment, namely, per capita cropland and country size, measured in terms of absolute GDP. 1

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Resource Abundance and Economic Development
Table of contents

Table of contents

  • Unu World Institute for Development Economics Research (Unu/Wider) ii
  • Resource Abundance and Economic Development iii
  • Foreword v
  • Acknowledgements vii
  • Contents ix
  • List of Tables xi
  • List of Figures xiv
  • List of Contributors xv
  • Part I Introduction 2
  • 1: Introduction and Overview 3
  • References 15
  • Part II Critical Parameters in Resource-Based Development Models 18
  • 3: The Sustainability of Extractive Economies 36
  • Appendix 3.1 Deriving Net Income and Genuine Saving 46
  • References 55
  • References 73
  • Part III Long-Term Perspective On, and Models Of, Resource-Based Growth 94
  • References 109
  • 7: Short-Run Models of Contrasting Natural Resource Endowments 113
  • References 124
  • References 142
  • Part IV Development Trajectories of Resource-Abundant Countries 145
  • 9: Competitive Industrialization with Natural Resource Abundance 147
  • References 163
  • 10: A Growth Collapse with Diffuse Resources 165
  • References 177
  • References 191
  • 12: A Growth Collapse with High Rent Point Resources 193
  • References 206
  • 13: Large Resource-Abundant Countries Squander Their Size Advantage 208
  • References 220
  • Part V Lessons for Policy Reform 223
  • References 237
  • 15: Growth, Capital Accumulation, and Economic Reform in South Africa 239
  • Appendix 15.1 257
  • References 258
  • 16: Reforming Resource-Abundant Transition Economies 260
  • References 275
  • References 294
  • 18: A Nordic Perspective on Natural Resource Abundance 296
  • Part VI Conclusions 314
  • 19: Conclusions 315
  • References 327
  • Index 329
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