Do Resource Windfalls Improve the Standard of Living in Sub-Saharan African Countries?: Evidence from a Panel of Countries

39 Pages Posted: 26 May 2015

See all articles by Munseob Lee

Munseob Lee

University of California, San Diego (UCSD)

Cheikh Anta Gueye

International Monetary Fund (IMF)

Date Written: April 2015

Abstract

We examine the impact of resource windfall on the standard of living both in the short-run and long-run, using a sample of 130 countries, 1963-2007. Then, we systematically investigate the effect of resource windfall on welfare in three different groups of countries: We find that in the short-run resource windfall is welfare enhancing in the whole sample, especially via increases in income and decreases in inequality. However, in SSA countries, the size of welfare improvement is small and it is smaller and almost zero after one year in fragile Sub-Saharan Arican (SSA) countries. In the whole sample, a resource windfall shock leads to significant welfare growth even in the long-run, but we couldn’t find any significant long-run effect of resource windfall in SSA countries.

Keywords: Natural resources, Sub-Saharan Africa, Commodity boom, Rent, Income, Welfare, Corruption, Governance, Inclusive growth, Panel analysis, Cross country analysis, commodity prices, gdp, development, growth rate

JEL Classification: C33, I30, O11, O13, O55, Q32, Q33, Q38

Suggested Citation

Lee, Munseob and Gueye, Cheikh Anta, Do Resource Windfalls Improve the Standard of Living in Sub-Saharan African Countries?: Evidence from a Panel of Countries (April 2015). IMF Working Paper No. 15/83, Available at SSRN: https://ssrn.com/abstract=2609647

Munseob Lee (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
#0519
La Jolla, CA 92093-0519
United States

Cheikh Anta Gueye

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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