The Macroeconomic Impact of Mineral Revenues on General Market Equilibrium and Poverty Alleviation in Sub-Saharan Africa

The Journal of Energy and Development, Vol. 32, No. 2, Spring 2007

29 Pages Posted: 21 Dec 2009

See all articles by Ahmad Slaibi

Ahmad Slaibi

Cornell University - School of Applied Economics and Management; The World Bank

Steven C. Kyle

Cornell University - Department of Economics

Date Written: May 18, 2007

Abstract

A combination of higher oil production as well as higher oil prices is creating oil revenue windfalls for some Sub-Saharan African countries. If well managed, these revenues have the potential to reduce poverty; if not they could lead to Dutch disease and an increase in income inequality. Our research examines the potential impact of government expenditure on the non-traded sector and its implications on production and wages in other sectors. It differs from previous research in several ways that more accurately reflect reality in Sub-Saharan oil exporters. We find that a tariff applied to protect a leading part of the traded sector could in the short term reduce the negative impact and help raise wages in the protected sector. However, in the medium term, once learning by doing is introduced, the potential benefit of the tariff is minimized and in the long term the tariff has a definite negative impact on the protectable sector.

Keywords: Poverty Allevaiation, General Market Equilibrium, Dutch Disease

JEL Classification: Q43, Q33, O11, Q01

Suggested Citation

Slaibi, Ahmad and Kyle, Steven C., The Macroeconomic Impact of Mineral Revenues on General Market Equilibrium and Poverty Alleviation in Sub-Saharan Africa (May 18, 2007). The Journal of Energy and Development, Vol. 32, No. 2, Spring 2007, Available at SSRN: https://ssrn.com/abstract=1525553 or http://dx.doi.org/10.2139/ssrn.1525553

Ahmad Slaibi (Contact Author)

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States

HOME PAGE: http://www.people.cornell.edu/pages/aas54/

The World Bank ( email )

Washington, DC 20433
United States

Steven C. Kyle

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

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