Using Natural Resources for Development: Why Has it Proven so Difficult?

41 Pages Posted: 20 Jan 2016

See all articles by Anthony J. Venables

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Date Written: January 2016

Abstract

Developing economies have found it hard to use natural resource wealth to improve their economic performance. Utilising resource endowments is a multi-stage economic and political problem that requires private investment to discover and extract the resource, fiscal regimes to capture revenue, judicious spending and investment decisions, and policies to manage volatility and mitigate adverse impacts on the rest of the economy. Experience is mixed, with some successes (such as Botswana and Malaysia) and more failures. This paper reviews the challenges that are faced in successfully managing resource wealth, the evidence on country performance, and the reasons for disappointing results.

Keywords: depletion, diversification, Dutch disease, genuine saving., Natural resources, non-renewable, resource curse, revenue management

JEL Classification: Q3

Suggested Citation

Venables, Anthony J., Using Natural Resources for Development: Why Has it Proven so Difficult? (January 2016). CEPR Discussion Paper No. DP11038. Available at SSRN: https://ssrn.com/abstract=2717587

Anthony J. Venables (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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