The Political Economy of Government Revenues in Post-Conflict Resource-Rich Africa: Liberia and Sierra Leone

33 Pages Posted: 20 Nov 2012

See all articles by Victor A. B. Davies

Victor A. B. Davies

African Development Bank

Sylvain Dessy

Université Laval - Département d'Économique

Date Written: November 2012

Abstract

This paper examines the post-war strategies of Liberia and Sierra Leone to generate revenues from their natural resources. We document the challenges faced by the government of the two countries, contrasting measures taken to address these challenges as well as the outcomes. We complement the analysis with an analytical model which explores the implications of exploiting natural resources in the aftermath of a civil conflict before public management institutions are developed, as observed in Liberia and Sierra Leone. The key lesson is that resource-rich countries emerging from conflict face a difficult trade-off between relatively large longer-term gains which accrue when institutional capacity is developed prior to exploiting the resources, and smaller short-term revenues that come with immediate exploitation of the resources. The findings call attention to the potential role of the international community in developing post-conflict countries' natural resource and revenue institutional capacity, as well as transparent corporate and government institutions for resource management.

Suggested Citation

Davies, Victor A. B. and Dessy, Sylvain, The Political Economy of Government Revenues in Post-Conflict Resource-Rich Africa: Liberia and Sierra Leone (November 2012). NBER Working Paper No. w18539. Available at SSRN: https://ssrn.com/abstract=2178318

Victor A. B. Davies (Contact Author)

African Development Bank ( email )

Rue Joseph Anoma
Abidjan, Ivory Coast 01 BP 1387
Ivory Coast (Cote D'ivoire)

Sylvain Dessy

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

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