Natural Resource Exports, Fiscal Policy Volatility and Growth

21 Pages Posted: 5 Oct 2014

See all articles by Michael Bleaney

Michael Bleaney

University of Nottingham - School of Economics

Håvard Halland

World Bank

Date Written: November 2014

Abstract

The combination of poor institutions and erratic macroeconomic policy, as measured by the volatility of fiscal policy, is associated with slower growth. We show that macroeconomic policy is more erratic in countries that are rich in natural resources, especially minerals and fuels, and in those that receive large aid inflows. Poor institutions also play a role. Although Africa is a major receiver of aid and exporter of natural resources, this is not purely an African phenomenon. Output volatility is not associated with slower growth after controlling for institutions and the volatility of fiscal policy.

Suggested Citation

Bleaney, Michael and Halland, Håvard, Natural Resource Exports, Fiscal Policy Volatility and Growth (November 2014). Scottish Journal of Political Economy, Vol. 61, Issue 5, pp. 502-522, 2014, Available at SSRN: https://ssrn.com/abstract=2505499 or http://dx.doi.org/10.1111/sjpe.12055

Michael Bleaney (Contact Author)

University of Nottingham - School of Economics ( email )

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Håvard Halland

World Bank

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Washington, DC 20433
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