Resource Abundance and Economic Development

By R. M. Auty | Go to book overview

social conflict. This requires a crackdown on corruption and criminal activity. Furthermore, when reforms are introduced, the government must ensure that these are not used as a vehicle for a few people to extract more rents from the system. A more careful accounting of the rents from natural resources and for allocating them to the highest value uses in a transparent way would be beneficial. If these actions are taken, and complemented by stable macroeconomic policies, there is some hope that the transition will yet be successful in this vast country.

At the same time as reforming the government, it is also desirable to make the government sector smaller. Others, including Aslund (1999) have also noted the need for this. Total state revenues should be reduced, leading to a decline in the value of tax exemptions. This in turn would both reduce rent-seeking and provide incentives to abolish barter. A reduction in the share of barter transaction should lead to increased incentives for investment in an efficient industrial sector and for the restructuring of value-subtracting sectors (Gaddy and Ickes 1998).


Aslund, A. (1999), 'Why has Russia's economic transformation been so arduous?', paper prepared for the Annual World Bank Conference on Development Economics, 28-30 April 1999.

Aslund, A., P. Boone and S. Johnson (1996), 'How to stabilise: lessons from post-communist countries', Brookings Papers on Economic Activity 1: 217-314.

Auty, R. M. (1998), 'Resource abundance and economic development: improving the performance of resource-rich countries'. Research for Action 44, Helsinki: UNU/WIDER.

Bezgreblnaya, I. (1995), Labour Markets in Russia, paper prepared for the Harvard Institute for International Development, Moscow Office.

De Melo, M., C. Denzier and A. Gelb (1996), 'Patterns of transition from plan to market', World Bank Economic Review, 10, 397-91.

EBRD (1999), Transition Report 1999: Ten Years of Transition, European Bank for Reconstruction and Development.

Esty, D. C. (1997), 'Environmental protection during the transition to a market economy', in W. T. Woo, S. Parker and J. D. Sachs (eds.) Economies in Transition: Comparing Asia and Europe, Cambridge MA: MIT Press: 357-85.

Gaddy, C. and B. Ickes (1998), A simple four-sector model of Russia's 'virtual' economy (May).

Goskomstat (1998), Russia in Figures: Concise Statistical Handbook, Goskomstat of Russia, Moscow.

Knack, S. and P. Keefer (1997), 'Does social capital have an economic pay-off? A cross-country investigation', Quarterly Journal of Economics, 112, 1250-88.

Lawson, C. W., A. Markandya, and M. Pemberton (1999), 'Explaining the effects of the level and rate of transition on economic growth', University of Bath Discussion Paper (mimeo).

Markandya, A. (1996), 'ODS phase out in Bulgaria: evaluating the effectiveness of alternative strategies when enterprises are in transition' Report to the World Bank.

Markandya, A. (1999), 'Employment and environmental protection: the trade-offs in an economy in transition', Environmental and Resource Economics, 13, 1-27.

Rodrik, D. (1998), 'Where did all the growth go? external shocks, social conflict, and growth collapses', J. F. Kennedy School of Government, Harvard University, MA.

Russian Economic Barometer (1999), (


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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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