Resource Abundance and Economic Development

By R. M. Auty | Go to book overview

employment-intensive sectors, feeds corruption and prevents the transformation of the state into an agent for enabling economic development.

There is firmer evidence still that natural resource rents retard reform. Rents from gold and cotton have been siphoned away by the government of Uzbekistan to feed the protected manufacturing sector. Yet, this strategy ignores the lessons of the market-driven resource-abundant countries: in the absence of more market-sensitive reform, economic growth is likely to collapse. In Russia, natural resource rents have impeded reform because the government offset its declining revenues by using the rents to subsidize consumers. The rents also delayed the competitive diversification of the economy by permitting removal of hard budget constraints on enterprises. In addition, the robust response of the nonresource tradables sector to the negative oil shock of 1998, which may have cut GDP by 5 per cent and brought a sharp depreciation of the real exchange rate, is consistent with the Dutch disease thesis. Lastly, the privatization of natural resources amplified income inequality during the transition and corroded social capital. Fundamentally, the Russian reform programme failed to develop institutions for the effective capture of the oil rents and their deployment for the public good.

Finally, the late-industrializing resource-abundant Nordic countries have managed to wean themselves from natural resource-dependency at different rates, albeit with different consequences for the long-term resilience of their economies. Denmark, the Nordic country least well-endowed with natural resources has experienced most success in diversifying its economy. Finland (like Sweden) has greatly reduced its former dependence on forestry and exhibits little evidence of the legacy of Dutch disease effects. Norway (like Iceland) still exhibits some Dutch disease effects. In addition, an echo effect persists from earlier resource dependence in the form of a fishing lobby whose political clout is disproportionately influential, given the shrunken size of the sector, and possibly detrimentally high. However, with regard to the oil sector, Norway has evolved a rational policy for handling the oil rents that clearly demonstrates the basic thesis of this book: even a large and volatile rent stream with point socioeconomic linkages can be well managed with appropriate social capital.


REFERENCES

Brewster, H. (1994), 'Dutch disease in the age of adjustment', paper presented to the UNCTAD Conference on Development, Environment and Mining, Washington DC: World Bank.

Davis, G. (1995), 'Learning to love the Dutch disease: evidence from the mineral economies', World Development, 23 (10), 1765-79.

Edwards, C. B. (1990), Protection and Policy in the Malaysian Manufacturing Sector, Vienna: UNIDO.

Lewis, W. A. (1978), Growth and Fluctuations 1870-1913, London: George Allen and Unwin.

Londero, E. and S. Teitel (1998), Resources, Industrialization and Exports in Latin America, London: Macmillan.

-327-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
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
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 340

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.