The Local Economic Impacts of Resource Abundance: What Have We Learned?

69 Pages Posted: 20 Apr 2016

See all articles by Fernando M. Aragon

Fernando M. Aragon

Simon Fraser University (SFU) - Department of Economics

Punam Chuhan-Pole

World Bank

Bryan Christopher Land

World Bank

Date Written: May 12, 2015

Abstract

What are the socioeconomic impacts of resource abundance? Are these effects different at the national and local levels? How could resource booms benefit (or harm) local communities? This paper reviews a vast literature examining these questions, with an emphasis on empirical works. First, the evidence and theoretical arguments behind the so-called resource curse, and other impacts at the country level, are reviewed. This cross-country literature highlights the importance of institutions. Then, a simple analytical framework is developed to understand how resource booms could impact local communities, and the available empirical evidence is examined. This emerging literature exploits within-country variation and is opening new ways to think about the relation between natural resources and economic development. The main message is that others factors, such as market mechanisms and local spillovers, are also relevant for understanding the impact of resource abundance. Finally, the paper discusses issues related to fiscal decentralization and provides ideas for future research.

Keywords: Energy and Mining, Energy Demand, Coastal and Marine Resources, Energy and Natural Resources, Energy and Environment

Suggested Citation

Aragon, Fernando M. and Chuhan-Pole, Punam and Land, Bryan Christopher, The Local Economic Impacts of Resource Abundance: What Have We Learned? (May 12, 2015). World Bank Policy Research Working Paper No. 7263, Available at SSRN: https://ssrn.com/abstract=2609380

Fernando M. Aragon (Contact Author)

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

Punam Chuhan-Pole

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Bryan Christopher Land

World Bank

1818 H Street, NW
Washington, DC 20433
United States

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